Today, chief financial officers have to deal with instant communications, customers in different time zones, and employees who are never offline. If your SMB is growing fast, you might also have to manage global operations.
And there’s another big change in the role of finance: the elimination of the chief operating officer. Today, less than one-third of Fortune 500 companies have a COO, and the proportion is even smaller among SMBs that have more limited budgets and smaller staffs. What happened to the COO role? Where did it go?
In the past, a COO would oversee operations and report directly to the CEO. Today, most companies have merged that responsibility into the CFO’s office. And in most SMBs, finance teams tend to be small. There might be a handful of people who are responsible for everything from day-to-day transactions, to financial planning and analysis, to project funding, to regulatory filings. They have a lot riding on their shoulders, and it can weigh on them when your team owns both financial AND operational activities.
All of this is combining to create a severe shortage of finance talent for SMBs. There are more students graduating with accounting and MBA degrees than a decade ago, but many of them are going to work for bigger organizations, where the teams are larger, the budgets are larger, and the portfolio of project opportunities may be significantly larger.
But there are only so many high-level jobs in a large organization—and for the most ambitious young finance professionals, there is only so far they can advance up the ladder. 99.9 percent of the workforce will never become the CFO of a Fortune 500 company.
This is where SMBs can have an edge – a chance for talent to join the C-Suite.
The “big 4” accounting firms—or even smaller ones—are a great place to start your CFO search. You might not be able to compete with them on certain benefits (such as unlimited vacation or extended maternity/paternity leave) but you can certainly offer a career opportunity—to lead the finance team of a growing company—that bigger organizations can’t match.
To attract great talent, you need to be smart about compensation. Your CFO might never earn as much as the CFO of a Fortune 500 company, but you must go beyond what the big firms are offering to a finance director or VP. And of course, an equity stake in your company is always a great enticement.
One thing to think about is future growth. If you’re in hyper-growth mode, you want someone who can oversee and manage that growth. Look for someone who has some experience with IT implementation projects. Ambitious finance professionals are getting involved with implementing ERP cloud systems, analytics, and even supply chain, because they know that they’ll be expected to manage both IT and operations as part of the CFO role.
You might also be looking to a merger or acquisition to fuel your future growth. Look for a seasoned finance professional who has some experience with M&A transaction and integration experience. And if your company has plans to expand oversees, look for a someone with international finance experience.
The biggest thing that SMBs can do to retain finance talent is not burn them out. And one of the best ways to do this is to automate as much as possible.
Finance professionals, especially in smaller companies, spend far too much time on work that can be done better, and more securely, in the cloud—from processing transactions, to consolidating data from multiple spreadsheets, to closing the books. Invest in finance software that can automate accounts payable and receivable, the monthly close, tax, compliance and more. This frees up your talent to focus on strategic activities like financial planning and analysis, M&A, and managing growth.
It also frees up their time to collaborate more closely with other lines of business. When you can get your people out of the back office to develop relationships, it creates an environment of respect within the company. Marketing or sales teams begin to learn the value that your finance team adds when they can help them plan and budget for a new product or marketing campaign. Often, other teams know there will be financial implications to their programs, but they’ll let accounting worry about it; if they respect your team and see them as knowledgeable leaders, they will consult them first before making any big decisions.
Be a cheerleader for your own people. Companies often hand out “salesperson of the month” awards, but rarely offer any accolades to finance. Find a way to offer regular, recurring recognitions. You might be surprised at the amount of commitment you can buy with a stack of $25 Starbucks and Amazon gift cards used in recognition and celebration of achievements large and small.
Finally, be in a continual mode of talent development. Do frequent performance reviews (more than just annually); know and identify your succession planning gaps; and train your best talent to take over the CFO role if you decide to retire or leave. Give them opportunities to learn about operations and IT—including business analytics, financial reporting, ERP and EPM systems—as well as other lines of business.
The more skills your team has, the easier it will be for your SMB to put a solid succession plan in place. A deep finance bench requires a set of well-rounded business people who are always ready to step in and take the reins when your current CFO decides to move on.