Rob Swystun, Pristine Advisers
New data suggests that companies are now starting to promote CFOs from within rather than bringing in outsider CFOs, an indication that they’re finally starting to get comfy again after the last financial crisis.
Financial talent is still a hot commodity in certain industries though, as reported by Christopher Westfall for Financial Executives International Daily. This means financial executives with the skills to grow a company in a slow economy are still in high demand.
“I think the horrible after-effects of the financial crisis have calmed and more companies are grooming internal CFO candidates,” says Scott Simmons, who is managing director of executive recruiting firm Crist Kolder Associates. “Now there needs to be a very specific set of circumstances to focus on external recruitment.”
Crist Kolder Associates’ recently-released Volatility Report says CFO turnover is expected to decrease for the remainder of the year. Searches for external financial executive candidates are forecasted to drop by double digits.
Only about 32% of CFOs placed in 2014 will be recruited from outside the company, which is down from about 43% in 2013, according to the firm’s report. If this trend continues, it will mark the lowest year for external CFO recruitment since 1995.
This came as a surprise to Simmons and his associates, as their recruiting efforts for financial executives remains strong.
“Our business is crazy and it seemed extraordinary that external hires are declining, but we have always counseled that it is safer to stay with an internal candidate than hire from the outside,” Simmons says. “And during stable times there doesn’t seem to be a great competition for talent.”
CEO and COO positions are also experiencing this same lack of outside hiring, too. And, actually, they are experiencing even more slow down, as CFO is the only executive position with external hires expected in each industry sector during 2014.
Particular industries like healthcare, retail and financial services are expected to hire more external CFO candidates than other industries.
For CFOs who are looking to make a move in this slow moving market, Simmons suggests:
1.) Don’t quit your job. “You lose so much leverage when you don’t have an existing position.”
2.) Consider relocating. (Just don’t expect a company to pay for it.) “Ten years ago a company would buy your house and take all that relocation pain away. Not anymore.”
3.) Avoid complacency and don’t expect companies to come to you. “You can’t sit back in the environment. You need to be proactive.”
It’s a buyer’s market for CFO positions right now. But, it’s also a great time to learn the necessary skills for navigating a slow market and coaxing growth out of it. Always be learning.