Turnover for CFOs, regardless of industry, has become a tremendous burden on companies of all sizes. As 2022 closed out with a five-year high for finance officers quitting their jobs, many companies suddenly lack a financial officer.
With four in 10 executives reporting last year they’ll quit in 2023, a company’s plans and strategies being altered due to a departing executive are relatively normal.
Despite its commonality, that gap in leadership can immediately disorganize structure and halt growth, all while giving the CEO a workload that is difficult to take on while looking for a replacement CFO.
Given the turnover levels and the difficulty replacing CFOs quickly, the demand for an interim CFO has more than doubled since last year. New data from Business Talent Group (BTG), a Heidrick & Struggles company, reveal the demand for interim CFOs has risen 103% since last year.
According to BTG’s High-End Independent Talent Report, organizations are in need of interim CFOs to complete particular tasks before the arrival of permanent CFOs. According to the data, organizations assign interim CFOs duties like “filling a sudden absence and leading through a major transformation” and “staff layoffs while leading finance operations, cost-benefit analysis modeling, and annual budgeting.”
The need for a temporary replacement in the finance department isn’t just an issue at the top level. Other finance roles in demand include corporate controller, the fastest-growing interim finance role, up 233% year-over-year (YoY). Overall, finance department turnover significantly impacts the number of interim requests received. BTG reported nearly half (43%) of all interim requests received by executive search firm Heinrick and Struggles in 2022 were finance related (up 71% YoY).
As talented employees continue to be valuable amidst the shortage of quality labor, those problems have now made their way into the C-suite as well. According to BTG, 53% of all interim roles were for a C-suite position. Data also shows C-suite demand increased 78% YoY overall, with requests for interim CEOs increasing 220% YoY, and demand for chief human resource officers and chief transformation officers’ increasing 100% YoY.
The talent issues among leadership aren’t just rising in the top echelon roles, either. BTG found a 116% YoY growth in demand for interim leadership support roles of all types, with PE portfolio companies and the life science and technology industries impacted at the highest levels.
When breaking down trends by industry, nearly all identified by surveyors had an interim CFO role with specific tasks for completion. Regardless of the business model, findings show the solidification of the CFO role is a priority for any organization’s success. In private equity, where talent retention is reported to be especially vital, interim leadership efforts made up nearly two-thirds (62%) of projects. These projects included things like driving a carveout process within a multi-brand specialty retailer.
Nearly half of the projects led by CEOs and presidents were efforts (44%) geared toward interim leadership positions. Their projects included overseeing budgeting, financial statements, and key finance activities as the company finalized an acquisition. Nonprofits and government entities saw more than a third (37%) of their search efforts go towards interim leadership needed to fulfill traditional finance duties like finance operations, cost-benefit analysis modeling, and annual budgeting.
Within the industrial goods and services sector, nearly a quarter (23%) of project resources went to interim leadership efforts. According to surveyors, these efforts were not only CFO-centric, but consisted of managing board relationships, treasury, and back-office operations.