“The list of the qualifications that even a small company is looking for in a CFO has doubled in just the past year,” says Tyler Ridgeway, director of the Executive Search Practice Group at the Horsham, Pa.-based accounting firm Kreischer Miller.
Smart Business spoke to Ridgeway about the challenges companies face in finding the right CFO candidate for the job, how business owners can circumvent some of the conventional ways to find a candidate, and some newer and more efficient ways to find the right man or woman for the job.
What is the state of the financial talent pool at the moment?
Visit any professional organization’s Web site or read any industry-specific journal and you’ll see that the ‘talent war’ is under way. Although there are always more candidates than available positions, the problem is finding the best financial candidate for your company. Each company has its own specific checklist as it relates to what they need.
Because of the post-Enron environment and the Sarbanes-Oxley Act that ensued, companies need to be extremely careful about whom they hire. Five years ago companies might take a risk on a candidate; in today’s market a newly hired CFO has to be completely trusted and be able to make an immediate impact. Many companies cannot afford to have a long period of ramp-up training. Companies are demanding that CFOs be immediately capable of handling day-to-day financial activities. In addition, they must bring a strategic vision and be capable of creating and implementing an action plan that is consistent with the company’s culture and mission.
If you look at these demanding expectations as well as the importance of cultural fit, you can eliminate about 90 percent of the prospective candidates out there.
Where can companies find these top candidates?
The days of taking out an ad in a newspaper and hoping for the best are long gone. Obviously, the best technique is to locate a search group that handles the executive placement process from a business partnering approach to ensure a long-term fit. This search group should fully understand your organization’s people, strategy, technology and culture, and utilize these key elements to do a thorough search.
Other than a recruiting firm, the key to finding the right candidate is networking. Through networking with your own trusted advisers — your bankers, lawyers and accountants — you can get not only referrals but also valuable information about a potential employee. These advisers are more apt to recommend a candidate who will fit in with your company’s culture and climate, since they already understand your company. You should also tap into your private network — that is, professionals or associates that you, as the business owner or CEO, trust.
What are some other ways of finding the right CFO candidate?
Tap into the financial industry’s organizations, such as your local chapter of FENG (Financial Executives Networking Group), senior executive groups and career transition groups. Identify, attend and participate in professional development group meetings where top financial executives may be. Also look at networking in your industry’s associations.
How do you find a candidate who may not be actively seeking a new job?
Finding the right candidate who is currently happily employed is the reason why networking is so important. A lot of executives may not be actively looking, but they do put the word out to their trusted advisers that they are keeping their eyes and ears open to new possibilities. You’d be surprised how putting the word out within your trusted network can yield results. You may also gain value by tapping into regional educational programs.
What else can a business owner do to get the right CFO for the job?
You need to know exactly what your desired candidate profile looks like before you even start the search. Take the time to conduct due diligence in this area, and be very clear.
Working with a trusted adviser in the development and definition of what you want out of this role is the first step. You need a CFO who is trustworthy and can stand the test of time. It is too expensive to hire and train and then lose a CFO; you want a person who can come in and take over the reins immediately and then stay for the long term.
TYLER RIDGEWAY is the director of the Human Capital Resources Group at Kreischer Miller (Web site www.kmco.com), an accounting firm based in Horsham, Pa. Reach him at (215) 734-1609 or firstname.lastname@example.org.