The recent pandemic years have produced unprecedented talent scarcity that has emboldened financial leaders to test the job market for greater career development and earning opportunities, according to a recent survey of CFOs conducted by Salveson Stetson Group (SSG), a national executive search firm.
In a survey of nearly 200 CFOs across public, private, and non-profit sectors, respondents indicated a high level of job satisfaction, with 75% reporting they are satisfied or very satisfied in their current roles.
John Touey, SSG’s Financial Officer Practice Leader, believes these seemingly opposing responses indicate the uniqueness of the current talent market.
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“While results do indicate that CFOs are by and large happy in their current roles, the majority of respondents (56%) also indicated they are likely to consider opportunities outside their current company,” Touey said.
The survey results show a high correlation between job satisfaction and what is important to CFOs when considering outside opportunities. Respondents said the quality of a CFO’s relationship with their CEO is the biggest factor that drives retention (87.5%). After that, company culture (76%) and compensation (76%) were deemed very important. Culture pushes to the top (85.4%), and compensation rises as a clear second (78%) when considering outside roles.
“Over the past two decades, the CFO has truly become the CEO’s co-pilot in running a company,” Touey says. “If the relationship between these two leaders is not strong, the risk of CFO flight increases dramatically.”
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Touey suggests that CEOs need to continually seek advice and input from their CFOs to create stickiness in the relationship. Conversely, CFOs need to continue to up their game by leveraging available data to provide more strategic business insight.
Results also indicate that a significant amount of CFO transition is inevitable in the next five years. Almost a quarter of respondents said that their next career move is retirement (24%). In combination with a heightened interest in considering outside roles, a large percentage (83.3%) of CFOs could be leaving their seats soon.
Given this timeframe and the expected number of transitions, CEOs and Boards should be thinking beyond CFO retention and investing in succession planning and leadership development.
“If you don’t have a ready candidate in your succession plan, more likely than not, you are going to be conducting an external search for your next CFO,” Touey says.
He suggests that CEOs and CFOs proactively manage career development among the CFO’s direct reports. Creating opportunities for more exposure to the Board, working on mission-critical special projects, and being specific about advancement opportunities are ways to prepare next-level reports for the top financial role and signal a commitment to their future career development.
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