THE CFO CHALLENGE

As the FE sector’s leading provider of executive-level search and recruitment, the team at FE Associates are able to track trends in recruitment, and a hot topic of discussion within our team over recent months has been the significant rise in CFO opportunities and the challenges this presents to the sector. By the way, here I am using the term CFO to represent the post held by the most senior finance professional in the organisation and in practice the role may be CFO, COO, Deputy CEO, Deputy Principal Finance and Resources or Director of Finance in smaller organisations.  At the time of writing we are recruiting to seven finance roles and we know that others in this space are also running campaigns to recruit senior finance talent  – so quite a spike in vacancies.

Whilst recruiting to the majority of executive level roles is not without challenge, there are certain roles that are harder to fill than others and we would put the role of CFO in the top three of most challenging roles to appoint to.  Our insights tell us that at the moment the spike in CFO vacancies has come about through a series of factors, including retirements and moving on to new roles in different colleges. Our insights also tell us that there are not a large number of sector-experienced senior finance professionals looking to move from their current roles.

There are a number of reasons why recruiting a new CFO is particularly challenging but what we see quite often is a preference (or sometimes even an insistence) from Boards that the new appointment must come from within the FE sector. However, given the increase in vacancies for this senior-level role and a relatively small pool of sector CFOs currently looking to move, now might just be the time for Boards to consider a more diversified approach to talent attraction.

Of course, in an ideal world, we would want someone who has done the job before, is familiar with the sector and the plethora of rules and regulations that govern us and can hit the ground running, but it may not be realistic to expect this, given the current number of vacancies in the sector. In thinking about this, I also wonder whether such a view may potentially limit the potential for new skills, perspectives, and insights to be brought into our organisations.

I think sometimes we may be guilty of thinking our sector is far more complicated than other sectors. But can we honestly say that FE finance, funding and financial management is more complex than HE, the NHS or local government? Objectively, it can’t be.  Yes, it is true that bringing someone in from another sector means there will be a period of learning and assimilation, but we need to be clear on what we need from our CFOs. Do we want a talented strategic leader who can contribute to the overall success and sustainability of the organisation or do we want someone to turn the handle (or produce the CFFR!)? Do we want to bring fresh thinking into the organisation, or are we looking to maintain the status quo? Or are we concerned about being particularly vulnerable for a period of time, as bringing someone in from outside may mean that we have a particular knowledge gap or skills gap for a period of time?

Yes, there are risks in bringing people in from other sectors, but we also know that appointing people from within the sector who may be stepping up into this most senior role is not without risk, as they may never have been exposed to this level of accountability or strategic leadership. We often see through our campaigns that experienced FE finance professionals who have held the number two finance position (e.g. Director of Finance) often lack the broader strategic leadership capabilities that Boards are looking for when appointing to the top finance job. 

So, if we are putting forward an argument that says given the level of demand for senior finance professionals in the sector at the moment and the lack of senior FE candidates wishing to move into new roles we need to be more open to appointing suitably qualified candidates from other sectors, then it is up to us at FE Associates to propose solutions that will make it easier for Boards to take the risk and fill these senior roles with colleagues from other sectors.

Our proposed solutions are twofold:

1: We have developed an intensive and personalised induction programme for new CFOs from outside of the sector, where they work with an experienced senior FE professional intensively for two days to immerse themselves in the world of FE funding and finance. Of course, by the end of this intensive immersion experience they won’t be able to do all aspects of the role without help or guidance but they will know the core essentials around funding flow, risk, reporting requirements, financial structures, governance and regulatory requirements etc and, most importantly, they will have a clear development plan which sets forward a roadmap for their ongoing learning and development. This intensive immersion experience will be overseen by former EKC Group CEO and FEA Non-Executive Director, Graham Razey OBE, who has supported numerous colleges with budgeting, planning and financial sustainability.

2. We are introducing an initial professional mentoring (not coaching) relationship whereby newly appointed CFOs have a monthly touchpoint to ensure their learning and development is on track and they are able to raise any queries or ask for technical help and support. All supplemented with as-and-when-needed remote support for quick issues.

The idea of the intensive support package is that newly appointed CFOs could take part in this immersive learning experience in advance of starting their role, giving them time to do some off-the-job learning and reading. This will also provide Boards and their CEOs with some degree of comfort that they will have learned some of the essential elements of the role prior to starting, thereby removing some element of risk in making such an appointment.  The ongoing mentoring support means that these newly appointed CFOs won’t be left to flounder, will have easy access to ongoing support and will have someone to help them build their confidence as they find their feet.

To find out more about FEA’s support for new CFOs, contact matt.atkinson@fea.co.uk