When I first saw the news break that the Federal Trade Commission planned to prohibit the enforcement of noncompete agreements last week, it immediately made me wonder to what degree finance executives would care about this. After all, we’ve reported on many occasions that it’s tough to find and retain top finance talent, and future workforce generations may not be able to offer a reprieve.
Are CFOs in a panic?
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As it turns out, not so much.
In partnership with the CFO Leadership Council’s president Jack McCullough, I wanted to understand two sides of the equation — are finance chiefs fearful about what the ruling may do to their own career trajectory, and what impact might it have on retaining their top finance talent?
Unsurprisingly, few were worried about their careers — 88% said it would have no impact.
What was more surprising was that nearly six in 10 (59%) said it wouldn’t have any impact on their teams, either. On one level this makes sense because there are certainly other tools available that executives can employ to keep their top talent on board — career growth opportunities, vesting schedules, total compensation packages that can include myriad perks, etc. In talking with CFOs about their core talent and succession planning, I’ve never encountered one who saw it proper to limit an individual’s career path if they wanted to do something else.
But on another level, in the aggregate, “brain drain” is a very real thing, especially when some of your top talent might possess an unusual combination of skills that uniquely enables them to help push the team forward (think: finance + GenAI expertise).
Furthermore, as David McCann’s piece today indicates, there is a non-trivial amount of companies (28%) who, amid M&A strategy, fail to consider a retention strategy or spend to keep key talent from departing. As M&A strategy among growth companies is often predicated on acquiring key pieces of technology, losing the very people who developed that tech would present a major business risk, especially if those people can take that expertise to a competitor, or just create their own company to compete directly.
CFOs’ perspective on noncompetes makes complete sense, but there are scenarios where they and their fellow C-suite partners must be proactive about other means to retain that key talent. And CPAs aren’t exactly growing on trees these days.