Once a business grows large enough, hiring a CFO becomes a necessity to maintain the company’s financial direction. Facing such a decision can be tough, particularly with a relatively young company or a unique company culture.
Currently, there’s another factor that play into hiring CFOs and other financial representatives: scarcity. The current unemployment rate is extremely low, well below 5 percent, according to the US Bureau of Labor Statistics.
At the industry level, the availability or unemployment numbers are much lower, hitting just 2 percent for management, business, and financial operations occupations in the United States. That means that businesses are competing for a very tiny number of professionals in management, business, and finance. Understandably, this makes CFOs more difficult to come by.
Fortunately, the unemployment numbers don’t include consulting professionals. For companies hoping to hire a CFO, hiring a consulting CFO or an interim CFO can be a great alternative in times of scarce labor, or when there are special circumstances.
When You Need a Full-Time CFO
Most mid-sized businesses will still probably need a full-time CFO dedicated to their company’s finances. A long-term, full-time CFO provides stability and consistency that many businesses need to stay afloat. However, depending on availability or specific needs of the company, a part-time/fractional or interim CFO can also provide much-needed expertise and direction.
When You Need a Consulting, Part-Time/Fractional CFO
If a company experiences trouble finding a full-time CFO, they can hire a consultant to pick up the slack in the meantime. The old cliché that time is money still holds water, and it’s important for a business’s financials to keep up with its growth.
A consulting CFO can also help companies that already have a full-time CFO, mainly with closing deals and lingering projects that require additional manpower.
When You Need an Interim CFO
Many companies end up hiring an interim CFO when they need to redirect the company’s trajectory. Perhaps the company is heading for more growth, through acquisitions and mergers, or they’re looking to restructure. Either way, some CFOs are better suited to those specialized tasks, but they may not need to stay there long-term.
Another reason to hire an interim CFO is to retain consistency after a CFO is dismissed or leaves. If a previous CFO has left abruptly, for any reason, it can be tough to find a long-term replacement. An interim CFO is a quick, though temporary, fix in these situations.