It's been a dizzying couple of years for Tatum, the large CFO-outsourcing firm. In early 2010, the company was purchased by SFN Group, a provider of temporary staffing, recruiting, and permanent job-placement services. Shortly thereafter, longtime president Rich D'Amaro left the firm.
He was replaced several months later by Karen Macleod, who 15 years ago cofounded Tatum competitor Resources Global. Then, last month, SFN merged with Randstad, a $20 billion workforce-solutions firm based in The Netherlands.
Macleod recently sat down with CFO to talk about the new Tatum and the market for interim CFOs. An edited transcript of the session follows.
Have there been any big changes since the September 2 acquisition by Randstad?
Not yet. Randstad gives us a global platform and a big, healthy, robust company to be attached to. But we're at the high end of the professional-services spectrum; they don't have a comparable company anywhere in the world. So we'll still stand alone and keep our brand. From a processes and systems standpoint there may be headaches, but overall I don't think it's going to be a big deal for us.
Who do you report to?
Dan Foley, the head of professional services for Randstad in the U.S.
What are you seeing in the demand for interim executive positions?
It's getting better. It had been terrible for quite a few years. I think companies have held back from hiring for so long that they now need to get things done, but they're hesitant to really scale up hiring. When we sit in business-development opportunities, clients are specifically looking not to invest in long-term talent. I just met with a client that wants three people for a large finance-transformation project that will go for up to three years, and [it] didn't want to hire permanent people for that.
Are most of the clients midsize and small companies?
Well, there's been some transformation at Tatum. We're now focused on four lines of business. We're highly branded with our business providing interim CFOs, CIOs, and other C-suite positions. We also do finance and accounting project work, executive search, and consulting. In our project and consulting services we're in larger companies, and in our CFO work we tend to serve more small and midsize companies.
I hadn't heard that Tatum was involved in recruiting for permanent positions.
We've always done it informally, but in February we put some leadership on it and formalized it as a service line. But we're not trying to compete with the true retained search firms.
What do you mean by that?
We're more focused on clients that know us and on drawing from our network. We're not calling into companies and pulling people out. We also have a different revenue model, where the fees are more staggered over the search. Part of the fee is to start the search, part to interview candidates, and part to close the search.
One of Tatum's major channels for interim CFOs has always been private-equity firms. Is that still true?
Yes, and that pipeline of opportunities has been increasing. The interesting part is, it's not as simple as a client needing a CFO to fill a role. It's more, "I need to get this company from point A to point B" with some type of philosophy. We're not just an affiliation of CFOs without jobs.
Private-equity firms that have gotten their investment to a point where it can be transacted feel a lot of pressure to get that done. Yet it's not necessarily a great time right now for a company to be in its best, most valuable place. So it's a neat challenge for us.
Are there any other interesting things going on out there regarding CFOs?
Some clients are bringing in interim talent as a permanent strategy. I've been in this business for 15 years, and clients often brought in top talent because they had to - there was some crisis, some last-resort position. But now, after the recession, more companies are looking for a permanent lean cost structure. Maybe they want 30% of their talent to be variable, from the top down.
If someone wants that permanently, is the person you place there really "interim"? Would a Tatum person stay at a job for years and years?
It happens all the time. You could say, well why don't you just hire them? But they're not on your benefits or in your headcount, and you have the option to stop the relationship at any time. The person also brings an objectivity that clients may find valuable for solving problems and fixing processes, and doesn't bring in the politics or bureaucracy that causes companies to be less agile.
How do you manage your inventory, as it were? You've got to have enough people so that you can fill the demand that's coming in, but if you have too many you're top-heavy. How do you maintain a balance?
We have a sphere of about 600 CFOs, 300 in employment status and 300 in alumni relationships. Part of how we're managing that is expanding more into project services. A company may have only one CFO position but a lot of work in the office of the CFO. So some of our people are carving out projects for others to come in and do. You do have to be careful to make sure it's not a fox-in-the-henhouse situation.
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