The Demand for Interim CFOs Soars

Companies are turning to interim financial leadership more frequently as they struggle to fill widening gaps in their accounting and finance functions. A new report from Business Talent Group lays out how the current talent landscape has shifted as companies can no longer rely solely on traditional full-time hiring to access the capabilities they need.

April 12, 2024 – Leading organizations are recognizing the value of integrating highly skilled on-demand talent—independent consultants, executives, project managers, and subject matter experts—into their workforce. With 72.1 million American workers (43 percent of the U.S. labor force) and countless other professionals worldwide choosing to work independently on a project-by-project basis or in interim leadership engagements, companies that rely only on those looking for permanent, full-time employment are missing out on the vast opportunities available in the external marketplace.

Demand for interim financial leadership skyrocketed last year, with requests for interim CFOs jumping by 46 percent, according to a report by Business Talent Group (BTG), a Heidrick & Struggles company. As well as interim CFO leadership, requests for on-demand talent with skills in key areas of finance also jumped; requests for talent that’s skilled in audit, accounting and financial controls have increased 33 percent, while those for FP&A and modeling skills increased 28 percent, the report found.

“The current talent landscape has fundamentally shifted as companies can no longer rely solely on traditional full-time hiring to access the capabilities they need,” said Sunny Ackerman, global managing partner, on-demand talent at Heidrick & Struggles. “Strategic, forward-looking leaders are embracing on-demand talent as a core workforce strategy to inject leadership bandwidth, specialized skills, and organizational agility exactly when and where it’s needed.”

Competition to nab skilled accounting talent has only become fiercer in recent years amid a worsening shortage of accounting professionals, leaving companies with critical gaps in their financial leadership and function. In addition to surging demand for interim CFOs, requests for senior vice president or vice president-level financial professionals — such as controllers and the heads of financial planning & analysis — rose by 114 percent, according to BTG.

When it comes to roles such as the head of FP&A or controllers, for example, “I think as you have shortages on one end, you’re going to have demand with organizations, whether it be full time or on-demand, for talent coming in,” Sunny Ackerman, global managing partner for on-demand talent at Heidrick & Struggles said in an interview with CFO Dive. Ms. Ackerman does believe there is a link between the shortage in talent and the spike in requests for on-demand employees in these areas, she said. “So I think there is definitely a correlation for that.”

Related: Answering the Growing Call for Interim Executive Talent

The rise in demand for audit, accounting and similar skills is “a logical consequence of the declining pipeline of accounting majors and CPA candidates,” Jack Castonguay, an assistant professor of accounting at New York’s Hofstra University, said in an email to CFO Dive.

How Companies are Using Interim CFOs
In recent years, the role and responsibilities of CFOs have grown greatly beyond their historical boundaries. No longer seen simply as stewards of the company’s financial management, compliance, and reporting, a Raconteur report recently noted that CFOs today are taking an increasingly prominent role as key strategic partners to the CEO, tapping vast troves of data generated by the organization to provide actionable insight on company priorities and offer early warning of risk on the horizon. A recent study from Business Talent Group (BTG) notes that as businesses upgrade and expand their finance capabilities, they’re adding complexity and operational scope to the CFO role—requiring ever-greater expertise to succeed within it.

“Historically, many companies have looked to fill roles in FP&A, audit, financial reporting and up to the CFO or controller chair with employees that have previously worked for an accounting firm, but dynamics have changed in recent years where many roles in accounting are now outsourced,” said Mr. Castonguay. “With accounting firm dynamics, largely insufficient salaries and work-life balance leaving firms struggling to attract people to the profession, the companies needing these people are now logically also struggling. You cannot disconnect the two.”

The narrower pipeline of new accounting graduates plus a high rate of retirement in the industry can leave employees that are left overworked, increasing the likelihood of mistakes, according to a report by Fortune. “Significant attrition” in the accounting department for retail brand Tupperware contributed to a delay in the company’s ability to file its annual 10-K form on time with the Securities and Exchange Commission, for example, the second consecutive year the brand will be filing late.

Related: Interim Leaders: Proven Experts at a Time of Crisis

“Fewer grads lead to fewer public accountants which leads to fewer qualified and experienced hires for companies to place in their internal accounting-focused roles,” Mr. Castonguay said. “The dynamic makes me wonder how the temporary or outsourced staffing firms are finding candidates at their staffing firms. It’s possible that will be the next shoe to drop.”

“On the labor side, changing ways of working may also be impacting how employees want to work; while there may be shortages in certain areas, the company is not necessarily seeing a slowdown of new candidates joining their platform,” Ms. Ackerman said. “So I think, even though there’s shortages in certain areas, I think talent is looking at this way of working differently than they did five years ago, and more companies are engaging with it.”

Companies may also be more motivated to try out on-demand talent as they look to plug critical skill gaps in their workforces. Ninety-five percent of executives said they anticipate difficulty finding the “ideal combination of skills, capacity and expertise” inside their teams, BTG’s report said. Today’s companies “now are starting to really open up and look at how they can blend full time talent with more independent talent and tapping into those capabilities at the desired time,” Ms. Ackerman said.

That includes how they might be approaching interim leadership; many firms are looking for on-demand talent to help provide critical support for larger-scale projects or initiatives, according to BTG, a category that makes up 27 percent of all talent requests. Interim leadership can provide benefits to companies who are in transition or who are undertaking major changes, according to a 2023 CFO Dive report citing BTG data from that year.

An interim controller, for example, could take point on business process optimization for the business to successfully execute such a project. “The CFO or that finance function is quite a bit of a right hand, I would say to the executive suite,” Ms. Ackerman said.

Related: Inside The Rapidly Growing High-End Independent Talent Economy

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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