A 3rd of CFO positions (33%) positioned this yr have been stuffed by first-time candidates, discovered the CFO Motion Examine from Cowen Companions Govt Analysis. Based on Cowen Companions’ President Shawn Cole, this inaugural group of CFOs shares a trending similarity of their work expertise.
“The deciding issue is FP&A, enterprise analytics, and enterprise intelligence, that’s the trendy CFO,” stated Cole. Based on him, expertise in budgeting, forecasting, and evaluation can set a candidate aside from others, separating their resume from one other candidate who could have extra expertise or educational credentials.
Altering Academic Credentials
Whereas he didn’t dismiss the notion of upper schooling being a basic a part of a CFO’s expertise and skillset, Cole famous dear MBA levels aren’t reaping the advantages they did for candidates prior to now. “I feel having an MBA helps and I wouldn’t inform anybody to not get one, [but] I feel we’re seeing developments that [show] the MBA doesn’t have the worth it used to have.”
Whereas the research famous lower than a 3rd of first-time CFOs have been CPAs, Cole believes any such expertise — regardless of being on a downward trajectory in first-time CFOs since 2014 — can nonetheless pay main dividends in the case of with the ability to carry out the duties of a CFO from a quantity’s perspective. “The CPA is unquestionably nonetheless a bonus as a result of [they] know the place the numbers got here from and so they perceive how the numbers are created,” stated Cole.
I feel having an MBA helps and I wouldn’t inform anybody to not get one, [but] I feel we’re seeing developments that [show] the MBA doesn’t have the worth it used to have. – Shawn Cole, Cohen Companions
Whereas the possession of both a CPA or MBA in new CFOs is shrinking, in response to information from the research, the analysis reveals the variety of new CFOs that held each a CPA and MBA in 2022 was 9%, a drop from 10.4% the yr prior.
Regardless of the drop of first-time CFOs being CPAs or holding MBAs, these credentials performed a key position within the hiring course of. The research additionally discovered first-time CFOs of coloration have been over-credentialed in comparison with their white friends. Findings present 63% of first-time CFOs of coloration have been CPAs, together with 63% additionally holding MBAs. Those self same credentials have been solely held at a charge of 40% and 30% respectively by their white counterparts.
Diversifying the C-Suite
As organizations throughout the board look to diversify their govt management, Cole spoke on how firms search individuals of coloration who’ve held titles corresponding to vice chairman and company controller or vice chairman of finance to diversify their C-Suites.
“It’s additionally a tactic for range hiring,” stated Cole. “We’d have a look at somebody with these titles that may be a range candidate to fill a CFO spot.”
The hiring of feminine CFOs by public firms has been on the rise as nicely. Knowledge reveals 36% of chief monetary officers introduced on by Fortune 500 firms this yr have been feminine. Based on the research, these numbers could counsel a gentle incline of feminine illustration amongst finance chiefs.
36% of CFOs introduced on by Fortune 500 firms this yr have been feminine.
Exterior of range hiring by organizations, specialization of industries and leveraging of expertise make a giant distinction in not solely the hiring course of however the profession trajectory of a first-time chief monetary officer as nicely. “There are a number of director and vice chairman degree finance professionals which have leveraged their time at a [large] firm into CFO roles at different smaller firms,” stated Cole. “They maybe by no means would have been the CFO of [that large company], however they’ve efficiently leveraged that massive firm expertise to a mid-market firm.”
Youthful people coming into finance who’re searching for the CFO place for the status of the title or to satisfy targets of sky-high earnings appear to be shortsighted, in response to Cole. “You actually have to consider it so far as industries are involved, you might be the CFO of a small firm and make $100K per yr,” he stated. “It’s not simply the title.”
Profession Path to CFO
Whereas tomorrow’s finance chiefs nonetheless must have understanding of accounting, a profession path to the C-suite isn’t a foregone conclusion for a possible business-minded particular person with out that accounting-based skillset, ought to they strategically develop the best recreation plan for work expertise.
As he referred to the finance path to a CFO place as “much less outlined,” Cole spoke about how a candidate with extra FP&A expertise than accounting expertise is almost definitely going to have success in a bigger group. “The smaller organizations are going to see worth in an accounting talent set,” stated Cole. “So if you see those that have the finance diploma that went by way of the finance facet, they’re often from a lot bigger organizations.”
If somebody is searching for velocity to the CFO route, I’d assume getting a [role] in a personal fairness backed firm, having that accounting diploma and getting that [FP&A] expertise, you is usually a CFO inside eight to 10 years. – Shawn Cole, Cowen Companions
Though the research didn’t point out a variety of ages of first-time CFOs, Cole made it clear that with the best mixture of expertise and schooling, a profession path from entry-level to CFO might be obtained in an affordable profession timeline.
“I feel that if somebody is searching for velocity to the CFO route, I’d assume getting a [role] in a personal fairness backed firm, having that accounting diploma and getting that [FP&A] expertise, you is usually a CFO inside eight to 10 years,” stated Cole.