7 Top Tips for Hiring a CFO
Here at The Finance People, we understand how to go about hiring the perfect-fit CFO for your business. But we also understand that it’s not so simple for many business leaders or in-house recruiters tasked with the job.
Are you ready to hire a CFO to help grow your business?
When you have plenty of other projects going on, it’s difficult to give hiring enough time it needs to find that perfect person. This can result in hiring someone that does not click with the team or that does not have the right skills. You may even end up hiring someone on a full-time basis when you actually only need them part-time.
We’ve put together 7 of our best tips for hiring your ideal CFO.
1. Don’t wait until you have a proper finance department
You should hire a CFO as soon as possible. Don’t wait until you get to a size where not having a proper finance department holds you back. If you don’t have a CFO, the CEO ends up knee-deep in finances instead of spending time driving the business forward. Act now to reap the rewards later.
A good middle-ground is to hire a fractional CFO or interim CFO to bridge the gap. This means you aren’t paying for someone full-time when this may be slightly out of reach for the size of your business, allowing you to begin to grow your finance department earlier than planned.
2. Hire in stages dependent on your business journey
Each stage of business growth requires different levels of skill from your finance function.
Small businesses with up to 15 employees will find that a competent part-time bookkeeper will suffice; but for larger businesses, they’ll often need an accountant, plus some more strategic support from a CFO. Your needs will grow from purely keeping the books to a broader commercial role covering management information, forecasting, IT, tax, financing and back-office support.
It’s crucial to anticipate the next stage well before you reach it; failure to do so will mean more pain later. There are so many times we’ve seen businesses suffer with things like cash flow just because they’ve not had senior resources in place to conduct proper governance and sense-checking on critical business decisions. Hiring for finance roles on a part-time basis will enable your department to evolve and grow at a pace that suits you.
3. Personality counts
A really good CFO, whether full-time or part-time, should be the number two to the CEO or managing director – so personal chemistry is vital. Being a sound bean counter, however well qualified, is not enough.
You need someone with a strong personality who isn’t afraid to challenge the head honchos – someone who will spot the small black dot on the horizon signalling bad weather on days when everybody else is enjoying the sunshine of business growth.
4. Look for passion
Make sure your CFO is someone with a genuine passion for fast growth.
The classic trap is to assume someone with an outstanding large blue-chip record is what you need. Paying for advice from a 30-year veteran with lots of experience isn’t going to work out if there’s no longer the appetite to roll up their sleeves and get stuff done.
The beauty of working with a fractional CFO is that they work with a handful of clients at one time. This keeps their job varied and exciting, ensuring they are giving you 100% of their passion at once. In comparison, full-time CFOs are at greater risk of losing interest.
5. Check their battle scars
A CFO who’s been there and done that (and has the battle scars to prove it) is always an advantage. Look for someone who has dealt with cash-flow problems, legal disputes and low-margin businesses. You never know when you might just need that relevant experience.
6. Know the going rate… and pay above it
Salaries can vary widely according to region, industry and company size, so do your research and find out what competitors are paying to make sure your offer is competitive. Don’t be tempted to scrimp on salary. Good-quality candidates don’t come cheap. Get in touch if you’d like up-to-date salary surveys in your area.
If paying above and beyond is a challenge but you’re still looking to source good-quality candidates, it is worth looking at hiring on a part-time or interim basis to save costs. You’ll save on sick pay, maternity pay and pension.
7. Consider a fractional CFO
If the above reasons haven’t yet got you convinced, here’s a few more! Through their expertise in negotiating with banks, invoice discounting rates and other contractual expenditure, a fractional CFO will easily neutralise their costs - whilst simultaneously being more cost-effective than hiring on a full-time basis. With no compromise on expertise, you’ll gain access to top-level CFOs without having to pay top-level rates. Further, you’ll have the flexibility of a rolling contract, with no tie-ins for longer than one month.
Employing them on a part-time basis could easily be one of the best investments you’ll ever make.
If you’d like to find out how The Finance People can help you hire your perfect-fit fractional CFO, get in touch for an informal chat.
Anita Tweats MBA is the CEO and founder of The Finance People, who offers flexible, expert financial support to businesses of all sizes. With solid experience working in accountancy practices, in industry, and as a lecturer, Anita offers expert knowledge and straight-talking advice on all things finance.