Hiring vs. Grooming Your CFO

1784

When it comes to hiring a CFO, many smaller businesses make the mistake of hiring from outside of the business when, in reality, grooming and promoting an employee from within is probably a much better financial bet.

There are many reasons for this, starting with the fact that the CFO’s responsibilities have grown incredibly more complex than they were just 20 to 30 years ago. Back in the 80’s, your typical CFO would be involved in cash management, profit improvement, control of inventory, and capital expenditures, and your basic accounting processes and procedures. Hiring from outside the business was commonplace as the job and the responsibilities were pretty much ‘cookie-cutter’ from one business to the next.

Today, however, the title of CFO comes with vastly increased duties, including serving on the board, being the ‘public face’ of the company for bankers and policy makers, leading the finance department, and acting as a strategic partner to the CEO. Not only that, but the CFO is now expected to be able to change actual processes at the manufacturing end, and so must have extensive knowledge of said processes.

All of which leads us back to our original statement that grooming an existing employee for the CFO job is an idea that has financial merit, especially to a small/medium sized company. Someone who has been with the company knows the history, and likely has a strong understanding of the company’s products and culture.

And so, if you’re looking to hire a CFO or looking to replace your current CFO, there’s no better place to start your search then within the very four walls of your own business. In addition, you may even be able to pay these people a fraction of what it would cost to hire and train an outsider.

Facebook Comments