Corporate budget cuts and head count reductions have forced a lot of valuable C-suite talent into the market, making it readily available to fill your needs. And if your company has a demand for critical niche skills, or it needs to complete a project such as an internal audit or other tasks that require the skills of a high-level professional, you may want to consider hiring an interim CFO.
“Companies still need to complete critical projects despite economic constraints, but they may be gun-shy about hiring a permanent professional,” says Tyler Ridgeway, director of the Human Capital Resources Group at Kreischer Miller. “Your existing CFO might need some additional short-term bench strength.”
Although top-notch CFOs may be predominantly in the market for full-time positions, many can be lured into temporary roles. In addition, some CFOs simply prefer to work on a consulting basis for multiple firms as an “interim,” rather than working for just one company as a full-time employee.
All of this is good news for companies with a demand for CFO-level skills.
“Many CFOs are excited by interim opportunities because they are getting paid and they can use their skills to do some hands-on work,” Ridgeway says. “Companies are ecstatic because they can get the talent they need without making a permanent hire.”
Smart Business spoke with Ridgeway about what to look for in an interim CFO and how to approach the hiring process.
Why would a company hire an interim CFO rather than a full-time executive?
This arrangement is ideal for companies that need help executing a project or that require extra high-level manpower to fulfill demands within the organization. For example, a company that is conducting an internal audit might need extra resources to complete it. The firm can hire an interim CFO to perform the tasks of a controller while it gains the strategic expertise of an executive-level professional who will fully take ownership of the project.
For companies that do not want to make a permanent hire, an interim CFO fits the bill and the budget. They do not have to commit to bringing in a full-time person. Plus, should the company be interested in making a permanent hire at some point in the future, the interim period can serve as a real-life interview which tests how the candidate handles projects and fits within the organization’s culture.
How should a company prepare to search for an interim CFO?
First, determine where you are lacking in your current organizational structure. What skills would you like to acquire? Perhaps you have a big project coming up, or you may be going through a merger or acquisition and need additional resources. Perhaps your CFO is planning a leave of absence. Identify the pain and the solution that will alleviate it.
Second, define exactly what it is you are seeking to accomplish. Do you need someone to partner with your finance team or accomplish strategic planning? Do you need help with budgeting or management of internal control issues? Determine what will help you meet your goals.
Finally, reach out to your professional services partners or other business resources you rely on. Ask if they can help you identify qualified candidates to fulfill your needs.
How can a company ensure that the interim CFO is the right fit?
Interviews are a critical step in the hiring process and even though you are filling an interim position, you want to treat the process similarly to the way you would hire a permanent employee. The timeline is typically much shorter for an interim hire, but you can streamline the recruiting process by going through a professional services firm to identify the best candidates. That way, candidates are already vetted and you can bring in each candidate for a single interview.
During that conversation, describe your needs and try to get a feel for whether the individual will thrive in your company’s culture. The best interim CFOs have the ability to think strategically and act tactically. They can provide solutions and think about the big picture, but they aren’t afraid to dig in and perform necessary hands-on tasks. You want to identify an interim CFO who will take ownership of your project.
What expectations should the company clearly communicate to an interim CFO about the role?
It is important to be candid about the CFO’s temporary role with the organization and to give the candidate a clear duration for the engagement. Keep in mind that if you hire someone on an interim basis, that professional is still conducting a job search, so you want to set realistic expectations for everyone involved.
If the hire is solely for a project, say so. If you see an opportunity to hire the CFO down the road and you want to use the interim assignment as a test period, keep the relationship open-ended. Let the CFO know that the position is temporary with an opportunity for permanent employment. Then, introduce the CFO to a variety of situations that will help you determine if he or she would be a long-term fit. For example, invite the CFO to a board meeting or ask for assistance on special projects. And remember, the process works both ways. Not all interim CFOs are interested in permanent employment.
Hiring an interim professional can be a win-win proposition, fulfilling a company’s need for expertise and a CFO’s desire to be compensated as a valued resource.
Tyler Ridgeway is the director of the Human Capital Resources Group at Kreischer Miller. Reach him at email@example.com or (215) 441-4600.