ON Partners, a pure-play retained executive search firm building diverse C-level and board leadership teams, announced that internal data shows the Chief Financial Officer (CFO) role has seen the most significant increase year over year in diversity hiring compared to other C-level roles, and 56% of CFOs placed by ON were diverse executives. Additionally, the data shows that not only is the position proving challenging to recruit for while the role continues to be in high demand, but total compensation for CFO positions over the past two years has increased.
“There is a high level of interest in diverse CFOs and a high demand to fill CFO positions overall,” said Baillie Parker, Partner at ON Partners. “Companies are very interested in attaining experienced sitting CFOs with the knowledge base to perform the assigned tasks. This may mean finding someone who has led a buy-and-build strategy or a CFO who has taken a company public. Only so many CFOs have this specific gained expertise, which creates a supply and demand issue within the current talent pool.”
In private equity owned businesses specifically, staffing challenges have been an ongoing topic of discussion and cause for concern. Historically, performing in a CFO role has been one of the most complex responsibilities, and according to a 2023 Censuswide survey, about 60% of the participating CFOs said they have been in their current roles for less than a decade. Now, with the shortage of CFO talent who understand how to work in industry sectors such as private capital, investors are also adamant that executive leaders filling these roles will be able to meet their set goals in a timely manner.
“Typically, PE-backed companies have a three-to-five-year hold, and the CFO exits after the liquidity event,” continued Baillie. “Often, candidates involved in a turnaround don’t want to be pigeon-holed into becoming a turnaround candidate. It’s challenging work, so they may prefer to look at growth opportunities over another temporary situation.”
When addressing the matter of relocation for executive positions overall, ON Partners found that a total of 17% of leaders rejected opportunities solely due to relocation restraints. This factor has also played a part in further narrowing recruiting choices, as some candidates are reluctant to relocate and travel.
Whether a candidate is interested in working remotely or solidifying long-term career growth within a CFO role, the position has undoubtedly evolved, and compensation has proven to be rewarding as well. ON Partners data shows that CFO candidates' current average wage rose 23% in the last two years.
“Companies are realizing how critical a CFO is to the future state of the business,” said Joe Olson, Partner at ON Partners. “There’s no stage where finance is not mission critical, and when a CEO or investor sees the impact that a strong CFO can have on all critical value factors, the cash compensation is very easy to justify. Furthermore, the role is evolving. CFOs are now viewed as strategic partners to the CEO and not solely an accountant. This too is reflected in the compensation, as the competitiveness for these candidates with the experience is increasing the total compensation package, and clients are very aware of it.”
According to an S&P Global Market Intelligence report, CFOs now only spend 10 to 15% of their time on financial oversight.
To learn more about ON’s approach and the current market trends for CFO executive placements, visit https://onpartners.com/contact-executive-recruitment-agency/.
About ON Partners
Established in 2006, ON Partners is the only pure-play executive search firm building diverse C-level and board leadership teams. We rebuilt the institution of executive search in the way you work, with an approach that includes present partners who engage with clients from the first brief to the final decision, individually crafted solutions unique to each client, and an easier experience overall. Named by Forbes as one of America’s Best Executive Recruiting Firms and to the Inc. 500/5000 List nine times, ON Partners is consistently ranked among the top 20 retained executive search firms in the U.S.