What every CEO should know about hiring senior finance executives
Image by StartupStockPhotos from Pixabay
Want to avoid costly mistakes hiring your next senior finance leader?
Hiring senior finance executives is one of the biggest decisions that any CEO will make. Get it right, and your business will reap the rewards. Hire the wrong person…
And watch it drain your budget.
Did you know that bad hires cost upwards of 30% of their first-year salary?
In senior-level finance roles, that adds up quickly.
When a senior finance leader is struggling in their role, it doesn’t just cost you money. There’s also wasted time and lost productivity from your team while you try to fix the problems.
Not to mention serious compliance risk if financial controls and auditing processes are weak under their watch.
Here’s what we’ll cover:
- Why the finance hire is so important
- How bad hires can cost you big
- Why financial compliance & auditing matter
- Qualities to look for when hiring finance executives
- How to find the right senior finance leader
Why the finance hire is so important
Your company’s CFO does more than just manage the books.
Chief finance officers are critical business leaders who impact every area of the business. From growth and risk management to technology and digital transformation.
Everything a CFO touches will either move the needle positively or have a negative impact.
That is why hiring the right senior finance leader is critical to your business.
Finance executives have a profound impact on financial compliance and auditing. They build the framework other teams rely on to do their jobs. From cash flow to accounting to investor relations.
76% of CFOs in the US say their companies are facing a talent shortage. Knowing how to recruit Head of Finance candidates with expertise in financial compliance and auditing is more important than ever.
Finance leadership hires typically take 4-6 months to land. You don’t want to be caught without experienced leadership for that long.
How bad hires can cost you big
Incorrectly hiring a senior finance executive can impact your entire organisation.
From productivity to compliance.
The US Department of Labor estimates that hiring the wrong person costs 30% of their first year salary.
If you happen to hire someone that makes $200,000 per year, you are looking at wasting over $60,000 on a bad hire.
However, money isn’t the only thing at risk when you hire the wrong senior finance leader.
Because they are so high-level, every action they take impacts other departments. Poor finance leadership will have other employees picking up the slack. Productivity suffers. Employee morale plummets.
And if that person is in charge of financial compliance and auditing functions?
You could be setting your company up for a compliance disaster.
Hiring the right leader from the start won’t just save you money, it can prevent serious financial headaches.
Why financial compliance & auditing matter
Let’s get into the finance details.
Ensuring your company has the proper financial compliance measures in place isn’t just recommended, it’s mandatory.
Penalties for non-compliance are severe, and they’re only getting larger as regulations continue to evolve.
Recent research discovered that companies pay “2.71 times more than what firms typically spend annually on building and maintaining strong compliance programs”
That is $2.71 for every $1 you spend trying to avoid compliance penalties.
Financial crime alone is expected to cost companies $61 billion this year in the US and Canada.
It’s no secret that regulatory requirements are increasing every year. As a CEO, you need to hire a senior finance executive that can keep up with the pace and understand financial compliance and auditing inside and out.
If you don’t have experienced leadership building your compliance program, you’re putting your company at risk.
Partnering with a senior finance leader who knows how to manage financial compliance and auditing is how you protect your organisation.
Qualities to look for when hiring finance executives
Excellent senior finance candidates don’t come lightly. When you land that superstar who nails interviews and exceeds your expectations… congratulations. You’ve just hired the cream of the crop.
And you know what? They’re hard to find.
But what qualities should every CEO look for when hiring a senior finance executive?
Positions in finance are no longer limited to number crunchers. There are specific traits and characteristics that can help you identify great senior-level hires. Including:
- Knowledge and experience with financial compliance and auditing
- Strategic mindset
- Leadership capabilities
- Technical expertise with new finance technologies
- Past performance results
Don’t discount soft skills either.
According to a hiring study, soft skills are important for 97% of employers when hiring new leaders.
Look for senior finance candidates that not only have stellar technical qualifications but can lead your team.
How to find the right senior finance leader
Searching for your new senior finance hire can be overwhelming. Especially if it’s your first time.
Here are a few tips to help you find the right person:
Understand the role.
What does this person need to accomplish? What are your financial compliance and auditing needs? What financial risks is your company currently facing? Answer these questions, and you’ll have a strong filter for finding the right candidate.
Look for potential.
Just because the candidate doesn’t have every requirement in the job description doesn’t mean they’re not a good fit. Many CEOs get tunnel vision when hiring executives. Finding someone with the right potential and soft skills is equally as important as hiring someone who meets every requirement.
Partner with an experienced recruitment team that specializes in finance leadership. Generalized recruiters have access to a much smaller pool of candidates. Recruiters who focus on senior finance placements have direct relationships with top-performing senior finance experts.
Passive candidates make up this pool.
Your ideal finance hire is probably not looking for a new job. But they are looking. You just have to know where to look.
Find someone who will stick.
Another mistake is jumping at the first good finance candidate that comes along. When you find that candidate that checks all your boxes, dig a little deeper. Find out what they are looking for in their next role and why they want to leave their current position.
You don’t want to make the perfect hire only to have them leave for another company after a year.
Interview efficiently.
How long did it take your company to interview the last senior-level candidate? If it took more than a month, you’re too slow. Finance executives don’t sit around waiting for companies to hire them. If your process is cumbersome, you will lose top candidates to businesses who interview faster.
Tying it all together
Your senior-level finance leader will make or break your financial compliance and auditing program. They will set the tone for how your entire finance department operates.
And if you don’t have the right person in this role…
Your company could be headed for trouble.
Let’s review:
- Senior finance leaders are key decision makers who influence your entire company
- Bad hires cost your business money and valuable time
- Financial compliance and auditing should be at the top of your hiring priorities
- Partnering with an expert recruitment team can save you time
- Look for candidates that possess both hard and soft skills
Don’t let your company be vulnerable because you hired the wrong finance executive.