Category: Management & Leadership

Not since 2007 have companies been willing to hire workers at the rate just observed by a CareerBuilder survey on first quarter hiring trends.

The study, released April 5, finds that about one-third of businesses hired full-time employees in the first quarter of this year, with their decisions to do so likely motivated by sales increases noted by 41 percent of companies. These numbers are reinforced by improving unemployment statistics, which many analysts have predicted will show growth when March figures are released later this week by the Bureau of Labor Statistics.

As companies supplement their workforces, competition for workers has also spiked. According to the survey, job candidates are increasingly turning down offers – 56 percent of companies reported this as occurring last quarter.

Earlier this week, this blog reported on the problems that could be experienced by organizations that are not prepared to engage with competitors in the highly frenetic war for talent. The best workers need to be fought for or they could escape to competitors.

“There is a growing gap between high-skill job openings and available talent that has a larger impact on overall employment,” CareerBuilder CEO Matt Ferguson said in press release. “Fifteen percent of employers reported that, because they can’t fill high-skill positions within their organizations, they’re not able to create lower-skilled positions that are tied to these roles.”

The implications of this skills gap could prove extremely detrimental to organizations that are still in the early stages of developing their financial staffs. By working with headhunting firms with established records of success completing financial professional search processes, a business can stay ahead of competitors hiring for those same positions. Once these senior financial executives are in place, recruiting accountants and other financial professionals then becomes an easier task.

High-level business decision makers rely on rigorous financial reporting to make decisions about future spending practices. Timely and accurate financial reports enable companies to track their profits and expenses, which should allow companies the ability to project down the road.

When organizations are still in their formative stages, many accounting and financial roles  – from accounting to strategic planning – are performed in a piecemeal fashion. It works as long as the company remains small and a few key individuals are able to grasp in one view all of the vital information necessary to maintain accurate financial records.

But, when organizations expand they need to find a better way to process financial information. While some financial professionals think that automated systems expedite the process and ensure more accuracy, others are reluctant to further erode the role of human judgement in accounting .

“Financial reporting will never be fully automated,” CPA firm founder Gabe Zubizarreta told CFO.com earlier this week. “Say you tell a salesman he’s going to get a quarterly bonus if he sells X units. By the second month, he’s halfway there. Should you record that bonus for the quarter? There’s no right accounting answer. Maybe recording that puts you a little below your profit estimate so you don’t record it. Maybe you do. It takes human judgment. You can’t automate that.”

Ultimately, a company’s decision to rely on automated accounting practices depends on the size of the company and the specific practices it engages in. More complicated business transactions could require automated processes, regardless of how hesitant decision makers may be to implement such practices.

A business intelligence analyst can  help CFOs and other C-level decision makers identify and retrieve critical financial information. To find the right business intelligence analysts many  CFOs and accounting professionals turn to executive recruiters to access their networks and to assess candidates for key roles.

The finance field provides an abundance of opportunities to those just getting started with their careers, many of whom face the question of whether a CPA, MBA or both would be most critical toward determining their professional future.

Generally, a CPA is required for any job that requires in-depth analysis of financial statements, from a financial analyst right up to a CFO or controller. An MBA is more beneficial for those interested in investment banking and venture capital, along with any job that requires long-term financial planning.

According to an article late last year on CFO.com, many businesses are increasingly hiring financial professionals that have an eye toward strategic planning and big picture thinking – how investments relate to the company in general.

“The ‘cat’s meow’…is a CPA who then gets an MBA,” according to the article. “Such a person gets grounded in the discipline needed to implement and monitor financial controls, policies, and procedures, and then adds the ability to advise on ‘grayer’ areas such as what projects should be funded, whether something should be acquired, built, or bought and whether products or services should be extended or eliminated.”

Should more companies slash accounting jobs, organizations will need to replace these individuals with financial professionals who may be better equipped to think strategically about the future of a company.

When building financial teams, CFOs should be sure they are surrounded with high-quality subordinates who can help assess past performance while also designing and refining a long-term financial vision. To find these individuals, businesses may consider hiring finance executives search firms with experiencing filling jobs in finance. Finance recruiters can help reduce the workload for CFOs, whose time is often consumed responding to numerous other stakeholders.

As tempting as it may be for company decision makers to throw an exorbitant compensation package toward executive candidates, these businesses may need to temper their expectations and first consider average executive compensation rates.

A study by an executive compensation consultant recently determined that executive compensation increased slightly in 2011, led by a 9 percent increase in long-term incentives. Meanwhile, base salaries only increased 3 percent and bonuses remained relatively unchanged.

The study could have significant ramifications for companies that are about to start searching for great CFOs and other senior executives, but are unsure of how to pay these business leaders for their services.

When determining how much to pay their executives, along with the type of compensation, business decision makers should consider the return on compensation (ROC) of their executives and always ensure that they are being paid a competitive compensation package.

“An organization’s compensation expense is an investment in talent, which requires a return, just like any other investment,” according to CFO.com. “Even though ROC is harder to measure than the return on traditional capital investments, prioritized investments in talent produce better returns than homogeneous or entitlement approaches.”

An executive whose compensation is tied closely to company performance, especially over an extended period of time, has a robust incentive to ensure that his or her long-term vision is formulated properly. Organizational stability, especially among those who hold senior executive positions, can be the difference between a company thriving by building on its prior successes and failing to emerge as an industry leader.

In order to fill executive jobs, particularly senior jobs in finance, businesses should find an organization that has financial professional search experience. These corporate recruiters can help businesses find senior executives and advise them as to proper compensation practices needed to attract and retain these business leaders.

The recent resignation of Miramax CEO Mike Lang is the latest in a string of sudden CEO departures that led to companies promoting their CFO to fill in on a temporary basis. This is a common practice among companies that do not have an executive succession plan in place.

Arguably, the most recent high-profile instance of a CFO stepping in as CEO occurred last September when Yahoo unceremoniously fired CEO Carol Bartz over the phone. Yahoo’s corporate board then promoted CFO Tim Morse to interim CEO and provided him with an “executive leadership council” to assist in the day-to-day operations of the company.

The long-term vision that CFOs must employ is a trait that ultimately helps those financial officers who are promoted to CEO, but they may lack the requisite knowledge of business operations to be successful for an extended period of time. With this in mind, it may not be surprising that studies have shown only 20 percent of current U.S. CEOs previously served as CFOs.

Still, on an interim basis, many CFOs have the skill sets to fill the corner office role and restore stability where it may have been lacking, but in general, directors of operation, vice presidents and COOs are best equipped to handle long-term CEO responsibilities. Even if former CFOs are passed by when professional recruiters conduct a formal CEO search, their future prospects are still bright.

Those seeking CFO jobs may need to be prepared to step in to serve a company as CEO if necessary. Meanwhile, companies searching for great CEOs may request the assistance of a corporate recruiter that is aware of the unique traits and experience needed to provide a business with rigorous and effective C-level leadership.