Supply and demand drive our economy, and when one outpaces the other, a strategic shift follows: goods are marked down or production is ramped up. In the job market, however, this dynamic is less easily balanced. And in the finance sector, it’s becoming a very real issue.
Vanishing act or failure to attract?
Finance is a rapidly evolving occupation, due in part to ongoing technological advancements that allow for deeper analysis and greater efficiency. AI can handle the routine processes, but humans are still essential for more strategic work—provided they have the right skills. Right now, the demand for niche financial skills is growing, while the supply of qualified talent continues to shrink.
In April 2019, the U.S Department of Labor reported that overall unemployment in the U.S. fell to 3.6%, the lowest since December 1969. In the financial sector, unemployment rates are even lower:
- Management, business, and financial operations: 1.4%
- Financial activities: 2.1%
- Accounting and bookkeeping: 1.3%
- Financial analysts: 1.0%
As more experienced finance professionals retire, fewer recruits are joining the ranks. Meanwhile, those in the middle are faced with the challenge of quickly becoming experts in a wider variety of more complex tasks. The required skill set for finance professionals has shifted from auditing and accounting to Big Data analysis in a very short period of time, leaving many workers underskilled and running to catch up.
With the need for financial analysts and specialists projected to grow by 10-11% by 2026 and a shortage of 10.7 million finance and business workers expected by 2030, the market is only going to get tighter. That’s why the search for alternative sources of top finance talent is already underway.
Weathering C-suite shakeups
A talent shortage poses a significant challenge for any business, but it’s especially tough in today’s highly competitive business landscape, where windows of opportunity are narrow. Should your CFO suddenly depart, a new market open up, or you find yourself in the midst of a merger, are you confident you’d have the necessary resources to keep moving forward?
Many companies are not. In fact, a recent report by Deloitte found that CFOs across the globe cite the lack of qualified finance talent as their “top constraining internal risk.” This was the first time in the report’s history that an internal risk outranked external ones.
The risk of not having much-needed expertise at a critical time is further compounded by the pressure to hire quickly. But a “something is better than nothing” approach is dangerous―particularly at the executive level. Experts estimate that the cost of a bad hire in the C-suite can cost a business 5–15 times as much as the position’s annual salary.
Rather than standing still or rushing to recruit the first available candidate, many businesses are turning to independent talent to bridge expertise gaps and mitigate risk.
Bridging the gap with an interim CFO
Thanks to the role’s importance, hiring a new CFO―whether for an open position or a new one―takes significantly longer than a regular role. Global HR Research estimates an average of 71 days for a C-suite hire, not including onboarding time.
While you’re waiting for the perfect hire, opportunities fly by and stability can start to suffer. With the growth of the gig economy, however, executives are finding that positions can be immediately filled by top finance talent while the search for a permanent hire continues.
In a recent study by American Express, 71% of the 900 CFOs and senior finance executives surveyed said they plan to increase their use of short-term and contract labor in 2019 and beyond. These businesses will gain a competitive advantage because their demand for specialized skills is no longer as constrained by the job market’s supply. Gaps in expertise become opportunities to gain greater agility.
Temporary talent with a lasting impact
During periods of transition, an interim CFO can help maintain continuity, provide guidance, and contribute specialized expertise when assessing new opportunities. Their timeline is limited, which makes the urgency of their goals that much greater. They are highly motivated to accomplish essential tasks and put specific processes in place quickly.
We’ve helped our clients hire interim executives to take the wheel on everything from a critical fundraising effort at a renewable energy company, which couldn’t wait for a permanent placement, to the overhaul of finance operations at a multinational wellness brand.
If this is the type of talent you’re looking for―an experienced interim CFO who can step in when needed and deliver a plan for ongoing success―you just need to determine how they can bring the most value to your organization while you search for a permanent hire. Figure out what you want to accomplish in the next six months, and we can help you find the right talent to get it done.
About the AuthorMore Content by Emily Slayton