Last week we shared the first article in our two-part series on today’s top challenges for CFOs. That article discussed the pressure that inflation has put on companies nationwide as well as the problems with expense reduction strategies and the added complexities of usage-based pricing models.
If you missed it, you can find it here: The Top 6 Challenges Faced by CFOs Today
Today we will jump right in with the last three challenges for CFOs:
4. Staffing Shortages
For almost two years now combatting burnout (both theirs and their employees’) has been a top challenge for executive management. Added demands and rapidly shifting strategies, not to mention increased challenges in their personal lives have put additional pressure on employees at all levels across all industries. Taking these stressors into account it is no wonder employees are leaving – leaving their existing employer, their industry, and even the workforce. Employees leaving to pursue better opportunities, change fields, or retire, combined with the ongoing war for top talent has turned into a major pain point for CFOs.
From an organizational perspective these challenges have very real financial implications as well as managing turnover, training new staff, managing short-term leave, and providing the resources required for remote work all have costs and complexities to consider.
Advice to Combat this Challenge:
Know how you will handle resignations and retirements before they happen. Our own Alex de Soto explains how to deal with your accounting leader retiring when he says that you should expect that it will cost more to hire accounting and finance staff now and offers the following options:
- Reevaluate your budgeted salary
- Hire a later-stage career leader
- Utilize a fractional option
While these suggestions are specifically geared toward financial leadership roles, they are relevant across other levels of the company as well, offering insight for many different types of vacancies.
5. Eroding Company Culture
Staffing shortages have made employers more willing to bend to the demands of candidates as a condition of their employment, which has contributed to an ever-increasing fracturing of company culture. And with most finance and accounting employees still working from home, either full-time or as a hybrid work arrangement, company culture has become more difficult to maintain across these teams even among long-time employees.
The reality of the situation is that organizations that do not actively work to maintain their culture, will find that it evolves on its own, potentially in undesirable ways. As our CEO, Kevin Briscoe, elaborates when discussing how to maintain company culture, “Spend time thinking about your culture. What is it? Can you define it? Is it something you are working to influence? Or is it merely a byproduct of what your company does on a daily basis?”
During the pandemic, organizations were so busy pivoting and adapting their business operations that many did not have the time (or budget) to focus on team building initiatives and many let company culture fall by the wayside. The result was a diminished company culture that was widely felt indiscriminately across industries.
The profitability implications of a company’s culture eroding certainly adds another layer of stress and complexity to a CFO’s job because companies with toxic cultures will forever find themselves in the rat race of managing the costs of employee turnover and customer churn.
Advice to Combat this Challenge:
Recruit the kind of employees that will naturally contribute to company culture without having to be convinced to be a part of it. Bring in talent that aligns with your company’s priorities to foster the kind of culture that will keep the company moving forward with everyone on the same page.
6. Increased Expectations
A CFO’s job not only includes more sophisticated strategic financial planning these days, but also more visibility both internally and externally. According to a recent McKinsey article,
“Growing shareholder expectations and activism, more intense M&A, mounting regulatory scrutiny over corporate conduct and compliance, and evolving expectations for the finance function have put CFOs in the middle of many corporate decisions—and made them more directly accountable for the performance of companies.”
Having a prominent seat at the table for decisions affecting everything from sales and marketing to HR and manufacturing puts additional pressure on CFOs that may already be experiencing burnout from the breadth of their job functions. The weight of their decisions puts them firmly in the spotlight within the company (on par with the CEO), giving them the kind of publicity that finance and accounting professionals typically do not relish. This added pressure is an additional challenge to overcome while leading their organization to success, especially when it exacerbates the loneliness that executives often experience.
Advice to Combat this Challenge:
Prioritize your own well-being. Find a mentor to lean on, set boundaries to protect your personal time and interests, and take time off to recharge and refresh your mind.
In the face of these extraordinary challenges, replacing a CFO has become exceptionally difficult. If your CFO has decided to retire or given their notice, please reach out to us. We can work with you to provide interim CFO services, search for and hire a CFO, as well as understand how to support your incoming CFO. Our highly experienced team of executive recruiters specializes in placing CFOs at private companies. Contact us today for more information!
