The CFO'S Perspective

COVID 19 has made a significant impact on everyone. Those who are close to retirement and those who feel uneasy about their employers' plans to return to the office cannot stop talking about it. They are trying to answer the looming question – "What do I want to do with my life, especially if this pandemic may curtail it?"

COVID-19 has been a significant disrupter to the traditional “work until you're 65, then retire” path. Now that the world is opening, we are expecting a flood of job changes, working fractionally, changing careers, and retiring because everyone has come face to face with the realization that life is short. With this realization, many are planning to make dramatic changes in their lives.

Filling this workforce gap will be challenging. Statistics show that 28.6 million Baby Boomers (born 1946 to 1964) are now out of the workforce in 2020. According to a Pew Research report, that's 3.2 million more than those who said they were retired during the same period in 2019. That may seem average but consider that there is a deficit of about 5 million fewer Generation X (born 1965 to 1980) professionals that could be ready to step into the Baby Boomers' vacant roles.  I have a friend who is 55, who quit his more than full-time, high-paying, executive job in 2020. He invested in a business overseas and plans to move there with his spouse and work part-time.

The success of an organization rests largely on the trust it creates with employees, customers, and the general public. According to a recent Gallup poll, “68% of adults globally and 60% of U.S. adults believe corruption is widespread among businesses in their country.”

It’s a bit disheartening to learn that over half of Americans might think poorly of your business, even if you’re one of the “good guys.” But how can you tell if your business really has integrity or if you just think it does? 

Just like with everything else, you figure out how to measure it. Getting a read on the integrity of your business might be challenging, but it’s not impossible. Here’s how you can measure the integrity of your business and why you should invest in the practice. 

A business owner should always have a succession plan, yet at the same time be ready when a member of their executive team is ready to implement their own exit strategy, i.e., retirement. The Great Recession caused many people to need to work longer until retiring because of the loss of income and value of retirement assets. But now, a decade has passed, which has given some the time to replenish their retirement savings. As a result of the COVID19 pandemic many people are re-evaluating what is important to them, and in many instances, it means retiring a few years sooner than originally planned.

Downsizing is never a light topic to broach, but for businesses that are financially compromised or experiencing a reduction in demand, it is important to fully understand before any strategic planning can begin.

Downsizing is often tied to a reduction in headcount. Headcount is more than just a number, which is why downsizing should be approached with the utmost care and consideration. Knowing why a company should downsize, what kind of risk is associated with doing so, and how to avoid common mistakes is key to increasing the likelihood that your reduction efforts will be successful.

Use this guide to get a better understanding of the implications of downsizing and help inform your strategic planning as it relates to both maintaining your business and preparing it for sale.

Regardless of what precipitates a recession, economic ebbs and flows are to be expected over time. Recessions can be caused by a period of contraction that inevitably comes after economic expansion or a sudden and unexpected economic shock.

While the coronavirus recession is fresh on our minds, it is not the first nor will it be the last recession that today’s businesses face. Knowing how to weather a recession is an essential management skill regardless of how long it lasts. However, facing a prolonged recession poses unique challenges that can test even the most adept leaders.

Our team of experienced CFOs shares their top tips on getting through a recession and coming out stronger on the other side:

Hiring for any executive leadership position can be a complicated process, but a CFO brings its own unique set of challenges. Organizations that downplay the importance of a thorough job description or attempt to rush through the steps can end up needlessly prolonging the search process or settling for a candidate that does not fit their needs.

Hiring a CFO hinges on writing an effective job description for the position that outlines not only the required qualifications for the role but also the expectations for someone acting within the role. And while this is a foundational piece of the search, it is only the first step in the process. Once the role of a CFO is defined, the active process of hiring a CFO begins. Each subsequent step must then be undertaken with an understanding of how it will build on previous steps and make additional progress toward finding the best candidate for the role. From identifying key decision-makers and setting a hiring timeframe to talking to a recruiting firm and evaluating your hire, each step is integral to the overall process.

So, how is today’s CFO hired exactly? Our executive search team answers your most common questions to explain the process.

When you want to hire a Chief Financial Officer (CFO) you can hire someone on a fractional basis or into a full-time position. But before trying to understand your options for hiring a CFO, you first need to get to the very nature of the role:

• A CFO is the position at the top-end of the spectrum of financial leadership that is outward-facing and forward-looking.

Once you frame the role in this way, you can start deciding how much time you need someone focusing on that area of your business.

A fractional CFO is basically a part-time or limited engagement CFO. Depending on the company’s needs, a CFO can either perform ongoing high-level financial analysis and oversight on a less than full-time basis, or financial management during a specific challenge or across a predetermined time. However, a fractional CFO may not provide enough support for an organization with more extensive financial needs.

So, when is a fractional CFO a better fit?

Hiring a Chief Financial Officer (CFO) is a daunting activity for many organizations. Understanding when to bring someone on board, what kinds of options are available to fill the CFO role, how to look for the best candidate, and what to expect after making a hiring decision are complicated topics that weigh heavy on many CEOs.

This comprehensive guide to hiring a CFO aims to answer the most common questions we hear when working with new recruiting and executive search clients to find a fractional, interim, or full-time CFO.