A CFO is unlike any other financial professional. They are more than just an analyst, more than just a strategist, more than even a leader: they’re a sign that your business is ready to “play with the big boys”, a symbol of rising success to your employees and any potential investors that may be watching.
So it pays to get a good one from the very start.
Here are five of the most important considerations to have while hiring a CFO — for the first time, or otherwise.
Depending on your needs, you should expect your CFO to have a minimum of an MBA in accounting, finance or business, a minimum of eight years of experience in a senior role and, preferably, a CA/CPA designation.
Experience doesn’t stop at formal education, however. Your prospective CFO should ideally have been involved in your sector and business size for many years. The difference in financial priorities between a company with 20 employees and 100 employees within the same industry is large enough, but then consider a large healthcare company compared to a small construction company. A different kind of CFO is required for each.
2. Cultural fit
CFOs are leaders. The days where they were primarily number crunchers are gone. Now, they are at the forefront of your business, representing you both internally and externally. As a result, they will become an integral defining factor of your culture, values and goals.
The days where they were primarily number crunchers are gone.
This is why you have to ensure that your potential CFO will fit into your company’s current culture and, perhaps even more importantly, will be able to affect it in a positive way. If you had a new team member that was extremely shy, quiet and introverted, but the team you wanted to place them in was known for its boisterousness, both the new person and the existing team would encounter integration issues. The same situation could happen with a CFO, but rather than a single team, it would be your entire company. That’s what you have to consider when figuring out cultural fit for your CFO.
3. Soft skills
CFOs need to be able to work with every level of employee and executive, as well as ensure you are presenting a persuasive face to external stakeholders and investors as well. CFOs have become a primary part of negotiations, as well as being department heads and, of course, chief collaborators with other C-level executives.
CFOs need to be able to work with every level of employee and executive, as well as ensure you are presenting a persuasive face to external stakeholders and investors as well.
As such, they must be communicative, positive, self-motivated, team-orientated and confident. If your prospective CFO is lacking here, they won’t be the great leader, the great mentor and the great negotiator that your business needs from its chief financial officer.
The biggest benefits of a CFO come over the course of multiple years, and hiring one full-time can be expensive. According to the 2017 Hays Salary Guide, organisations with annual turnover up to $50 million should expect to pay $137,000 salary as an average. Organisations’ with an annual turnover of $50 million — $500 million should expect $163,000 salary as an average. These salary estimates don’t include the cost of additional benefits and the hiring process.
If you’re a smaller business and can’t afford to swallow such a large expense, there are alternatives available that are significantly more affordable. Don’t take on more additional risk than you need to: find more information about these less expensive alternatives here.
The average CFO will stay with your company for about five years. Some will stay longer, others shorter, but the one constant is that you need to hire them with the long-term in mind. Will the CFO role, your business resources and your requirements still look the same in five years? Will your company and your CFO be able to adjust to potential changes over that time?
Will your company and your CFO be able to adjust to potential changes over that time?
In a similar vein, we are living in a business world defined by technological and cultural change. Data analysis, financial reporting, and the needs of your consumer are always changing. Do you think your CFO will be able to keep up? If not, they might not be the right fit for you.
The ideal CFO has:
- A great cultural fit
- A collaborative focus
- Great negotiation skills
- Mentorship abilities, and,
- Flexibility and a willingness to learn
While your business needs to remember its:
- Timeframe, and,
With these factors in mind, you should have no trouble finding the perfect CFO for your business.
To find out more about finding the CFO that’s right for your needs, download our free guide below.