RSM Resources

Finding the perfect match between a chief financial officer and a prospective employer is one of the greatest hiring challenges companies face.

You’re looking for a financial wizard who sees the big picture: a "numbers type" who understands people, and an ethical leader who brings strategic perspective to a host of accounting, compliance and business issues. It’s not an easy task, but one that can make all the difference to your organization’s success. That’s why smart companies are taking a fresh look at how they recruit and develop their CFOs and other finance professionals.

The professional association Financial Executives International (FEI) confirmed in a June 2006 study that the demand for financial gurus is greater than ever. According to research conducted with 207 CFOs, 63 percent of those surveyed said it is more difficult to find qualified hires, even though corporate finance staffing at public companies has increased by68 percent since 2002. At the same time, FEI reports that the number of its member executives "in transition" dropped from 778 to 562 between June 2004 and June 2006, meaning that far fewer CFOs are looking for work than in previous years and that the pool of talented CFO candidates for open positions is much smaller.

Experts agree that business growth and ongoing compliance demands are creating an increasingly tight labor market for skilled accounting and finance professionals, driving greater competition for talent. This includes focusing more on retention and actively recruiting professionals with the most in-demand skills.

Solving the riddle

When Riddle’s Jewelry launched its search for a new CFO, it decided to look for a unique mix of financial acumen, professional experience and career potential. Family-owned for nearly 50 years, Riddle’s is a South Dakota-based jewelry manufacturer, wholesaler and retailer with 47stores in 11 states. As Riddle’s CEO began formalizing a succession plan for the retiring CFO, he realized it would be imperative for candidates to understand the legacy they would build on and take along-term view of the role.

"For us, this process of finding anew CFO was much more than filling a job — we were passing the torch to the next generation," says Jesse Riddle, company founder and CEO."Along with finding a CFO who could handle all the traditional financial responsibilities, we wanted someone who understood the dynamics of a family-run business and reflected our values. We wanted someone who brought a fresh perspective and who would support new ways of doing things, but who also respected our culture, our history and the core elements of what has made us successful."

Riddle’s recruited a CFO candidate who not only fulfilled the technical job requirements, bringing both a law degree and professional accounting certification, but had worked side by side with the retiring CFO as part of a formal, five-year mentorship.

"It really was the best possible situation for our company," Riddle says. "Our current CFO was able to pass on his tremendous financial and organizational knowledge to our new CFO while he learned the company piece by piece and built relationships along the way. Our business is absolutely based on people and trust, and by making this a gradual transition, everyone affiliated with our organization — the owners, managers, employees, business partners — could see our new CFO grow into his role and move into that job with great confidence; bona fide, real-world experience; and the respect of everyone who works with him."

Growing midsized businesses can learn from Riddle’s CFO hiring strategy:

Take your time.When a position as important as CFO is open, you may be tempted to rush to fill it, but that artificial time pressure can cloud your judgment.Give yourself permission to make hiring your CFO a thoughtful,methodical process.

Hire for the big picture. Look beyond the classic CFO functions, such as finance, governance, auditing and regulatory responsibilities. Think through how your CFO supports the larger business organization — and how you expect your CFO to respond to those needs.

Consider the culture. Your CFO must move easily among levels and functions. Evaluate candidates within the context of your company’s personality and tone, and make sure they can communicate and reach out beyond the financial realm.

Anticipate change.Not only will your company change over time, but financial markets,regulations and fiscal best practices will continue to evolve. Make sure that your CFO comes prepared to learn and grow.

"Companies that create an entrepreneurial and flexible culture — one that putsemployees in charge of their own careers — will attract and retain amotivated and diverse workforce," says Leslie Murphy, vice chair,American Institute of Certified Public Accountants. "The [accountingand finance] profession is in the midst of a culture shift that is empowering professionals to take charge of their future and map out acareer that fits their unique needs and capabilities."