Executive Finance Recruitment - Market Update H2 2014

Cautious economic optimism continues

So far this year, Page Executive has noted continued increases in the volume of corporate transactions (with private equity leading the way), somewhat improved investment conditions, stronger appetite to list publicly and renewed focus on revenue growth rather than revenue protection.

Recruitment at the level, one step below Chief Financial Officer (CFO), is at its most competitive in last six or seven years with multiple offers and counter offers from current employers allowing individuals to attain salaries above the static market level.  This imbalance has not yet reached CFO level across the board but the changes in market dynamics hint that it may be on the horizon.

Types of CFOs in demand

Approximately a quarter of our mandates this year within the CFO practice of Page Executive have involved replacing Incumbent finance directors. Typically, they have performed well over the economic downturn but do not feel like the right partner to the CEO/MD to take the business through a growth or transformation stage. Another 25% of our mandates have been of the “commercial insight/decision support” type where there is increased appetite for executive level individuals who understand business triggers and drive commercial performance by investigating investment opportunities to enhance profitability and revenue.

Other trends

The most notable search trend is a shift towards uncovering ‘future-facing’ CFOs. While the ‘jack of all trades’ finance director is still in demand, we have noted a new focus on type and quality of experience in the following areas:  

• leading entry into new markets and new channels
• redefining the actual sector/segment of operation (e.g. from retail to technology to impact multiples thereby pushing potential sale prices higher)
• developing talent pipeline, enhancement with succession planning in mind, to enable growth over the medium term

Slight movement from sector specific searches

The market remains an employers’ market and the historical inflexibility in terms of search criteria from these employers means that certain candidates are experiencing intense interest and multiple competitive offers are making an unwelcome re-entry into the market.

Sector specific searches remain a frustrating market standard from a candidate perspective, however the move toward a desire for ‘forward-looking’ CFOs implies that we are edging away from pure sector specific requests towards a search for commercial experience regardless of sector.

Looking ahead

A recent paper released by the management consulting firm Hay Group, suggested that oil and gas companies are failing to implement sufficient succession planning, and when  recruiting externally are focusing on “recruiting to fill a current vacancy, rather than building talent for the future”. We have experienced this short-term approach in almost all sectors for years but many more of our conversations with CFOs and CEOs/MDs now have a stronger focus on medium-term talent planning.

At the start of the final quarter of this year, there has been an early increase in searches for new CFOs/finance directors with a view for them to join their new employer in the first quarter of 2015. Our most recent Page Executive research suggests that the typical length of search and selection cycles in 2014 has been an average of 4 and a half months.  Employers who would like their new FD/CFO to join them early in 2015 need to take immediate steps to allow that to happen.

Page Executive Finance is the CFO Practice of Page Executive, a top 10 UK Search firm concentrating on senior management and Board level positions. With highly experienced consultants across seven UK locations and 24 cities across Europe, Asia, The Americas and Africa, backed by research teams, we are a major recruiter of finance directors, CFOs and head of department roles across tax, treasury and internal audit.