One of the most crucial positions in your company is that of a Chief Financial Officer (CFO). You’ll likely know you need one when you find yourself spinning the hamster wheel of structuring your audit trails and defining budgets. How can you ensure you’ll hire the best person for the job? Here are our top tips for hiring for the CFO position.
1. Look for Experience in Financial Modeling
Candidates possessing strong financial modeling skills can help enhance the forecasting of your company, as well as support the CEO in finalizing capital allocation. Your company needs sound data analysis to inform strategy and the tangible objectives it should be achieving. Without someone devoted to the financial aspect of those aims, execution will always be a challenge.
2. Evaluate Communication/Interpersonal Skills
The ability to convey ideas clearly cannot be overstated for C-level vacancies. CFOs must be able to relay critical information to their coworkers in the C-suite, as well as to senior- and mid-level managers. This involves taking complex financial data and translating it into a simple narrative that provides a realistic outlook of business performance. A candidate who lacks interpersonal proficiencies won’t be able to develop a connection with their colleagues, no matter how great their financial modeling skills are.
3. Assess Their Willingness to Adapt
Digital advancements are causing disruptions in all industries, and a great CFO is expected to be responsive to these shifts. Leaders with intuitive insight about actionable analysis and big data, both financial and economic, are in demand for companies looking to stay one step ahead of their competitors. As such, candidates for the CFO position should be dedicated to continued development and an openness to adopt innovative solutions, such as cloud-based financial planning systems. Honing in on adaptable talent is a good future-proofing strategy.
4. Recruit for Cultural Fit
If you don’t see a potential candidate fitting into your company’s culture, it’s better to interview the next applicant. If you go out and meet CFOs who weren’t recruited for cultural fit, you’ll see that they’re natural skeptics and tend to overlook potential pitfalls. If a candidate’s personality clashes with your culture, they’re unlikely to be productive in their roles.
5. Do They Have a Network of Advisors?
Experiences CFOs will have connections with the people and entities that can benefit your company, such as private equity firms, auditors, bankers, investment consultants, lawyers and more. Having a team of key advisors on board will enable you to make key decisions with confidence. Most CFOs are also members of CPA associations (Certified Public Accountant). They may also possess a Certificate of Public Practice, which enables them to provide accounting consultancy to those outside their company.
6. Review Their Past Achievements
What the candidates actually achieved in their past positions is also critical. An applicant’s success can demonstrate experience as well as how motivated they were at managing the finances of their previous employers. Past successes should also be taken into account if you’re looking to recruit an outsourced CFO or a financial consulting company. Even if the candidates don’t directly talk about their successes, you can get a good idea of what they’ve achieved in the past by looking at their LinkedIn profiles.
7. Ask About Their Job Hunt
During the whole recruitment process, from the first phone call through the interview stage, you should try obtaining as many details as possible regarding their current job hunt. Are there any other opportunities that the applicant is currently pursuing? Are they talking to other organizations and, if so, where they are in the interview process. If a candidate seems well-qualified and has all the traits of a highly successful CFO, you may want to move quickly to keep him or her from joining another company. With that said, you don’t want to get so anxious that you jump steps in the hiring process. Even the most promising employees need to be carefully considered.
8. Ask the Right Questions
It’s also crucial to ask relevant questions in the interview. Below is a quick list at top CFO interview questions and the sort of answers you should look for.
Q. What is your approach to determining if an investment is profitable for a company?
It’s the CFO’s responsibility to guide your company about the best possible investments. Top candidates will say they’ve analyzed the solutions you offer, and they can see XYZ as a good investment. They’ll also look at existing trends to gauge potential.
Q. What’s the key to a successful budget?
Asking this question provides applicants with an opportunity to portray their knowledge of the industry. A good candidate will be able to tell you the most crucial measures the company needs to undertake to develop a budget and thrive financially.
Q. What’s your approach to developing revenue forecasts?
Top CFOs will constantly analyze financial data to learn how the business is doing and how much profit/loss they can expect it to incur in the future. While things can go awry without notice, the CFO should be able to identify datapoints that indicate a downward spiral and offer advice on actionable strategies for the near future. When it comes to managing companies’ finances, quick, informed decisions are critical. Ask this question to know if your new CFO will be able to manage your financial health with ease.
What Else Can You Do?
In addition to taking these eight measures, you can work with a recruitment agency that specializes in filling executive roles. Because A+ CFOs might not be looking for jobs on the World Wide Web, you can benefit from working with a recruiter who has deep networks when it comes to executive search.