Technology firms have been hit particularly hard by economic headwinds. Many companies inside the industry are pulling back from “moonshot” or other long-term projects and are reducing spending, cutting staff or implementing hiring freezes, in the face of persistent inflation and a probable upcoming recession.
To address changing company needs, technology companies are hunting for new executive leadership, according to a recent study by executive search firm Christian & Timbers.
This hiring is a reverse of the typical dynamic expected during downturn, said CEO Jeff Christian. “Normally people observe things for a while … they’ll sit, reevaluate, reassess, not make major changes,” Christian said in an interview. “But what they're doing right away is recognizing who their poor leadership is.”
‘Wartime’ CFOs sought
C&T predicts “operating CFOs” will be one of the “hottest” leadership positions in demand for tech companies for 2023.
Tech firms may be seeking out “operating” or “wartime” CFOs as economic headwinds push such companies away from the growth-at-all-costs mindset that has proved common over past couple of years and towards focusing on profitability or more sustainable growth, Christian said.
Such trends have already begun in industries like private equity, according to Sean Mooney, CEO and founder of “business builders” network BluWave. Mooney, whose company provides consultative services to private equity clients, noted in a December interview with CFO Dive, that the firm was seeing “tremendous amounts” of hiring in the sector, including for interim CFOs.
The hiring spike was partially driven by companies’ desire to swap out “peacetime ministers” for “wartime generals” in the face of a dawning recession, Mooney said.
The economy has put a spotlight on finance chiefs that are able to streamline operations and lower costs — a financial leader that “really knows how to help run a business and be a confidant to the CEO,” Christian said.
Operating CFOs are those with the skills to bring “greater financial rigor to every part of the business,” Christian said.
“How can they drive FP&A in their organization, help revenue?” he said of the role of an operating or wartime CFO.
Christian also pointed to such CFOs’ ability to aid other executives, such as the chief human resources officer, develop better financial controls over things such as hiring, which remains a top concern among executive leaders as labor challenges persist.
Solving the talent problem
Executive hiring trends come as many technology firms, including Google parent Alphabet, Microsoft, and Facebook, now Meta, have recently announced layoffs or staff reductions, which for many follow periods of aggressive hiring in prior years. Alphabet, for example, announced on Jan. 20 it would be cutting 12,000 jobs, approximately the same amount it added during 2021’s third quarter, the Wall Street Journal reported.
Even as technology firms make staff reductions, balancing the need to reduce costs while also finding top talent is a key concern for executive leaders across industries. For example, while 57% of executive leaders said they planned to cut staff, half of CFOs and CEOs also said they planned to increase their hiring budgets for 2023, according to a recent study by Mercer.
Being able to attract new talent into an organization is becoming one of the skills firms are seeking out when it comes to filling their executive seats, Christian said.
“More and more, people are asking for someone that can bring a team with them,” Christian said. “They're looking for people that are going to solve their talent problems at the same time.”
“Interviewing has now gotten to be about, ‘tell us about your network,’ he said. “’Tell me about the people that are waiting to find out where you're going to go next.’”