The churn rate among CFOs at Fortune 1,000 companies dropped markedly in the first half of 2009. After two straight years during which 24% of the positions were open at some point during the year, only 70 posts — or 7% — opened up in the recently ended six-month period.
The trend actually began shortly after the economic crash of last fall, according to recruiting firm Heidrick & Struggles, which yesterday released a midyear report on the job market for large-company finance chiefs.
Although many companies have been in financial distress, few seem to be blaming their CFOs. “In these economic times, there is reluctance to make changes,” says Michele Heid, co-managing partner of Heidrick’s finance practice. “Companies are taking the most risk-averse position. Somebody who already knows the company presents less risk.”
Supporting that point is that among the 69 people who did land CFO jobs in the first half of the year, almost 60% were promoted internally. In 2008 there was an even split between internal and external hires. Picking someone with a finance background who had subsequently moved into operations “is a trend we’re seeing more and more of,” says Heid.
Of course, a CFO change does not always occur at a time of the company’s choosing. Another reason for the change, according to Heidrick, is that few executives are eager to move, given the current state of the housing market and the large number of companies with potentially unstable outlooks.
There’s also the fact that many companies that had been inclined to replace their CFO have already done so. This is particularly the case in the financial-services sector, where the annualized turnover rate in the first six months of 2009 fell to 8% from 17% last year, and among technology companies, where the annualized churn rate fell from 23% to 8%. The only sectors in which turnover increased were telecommunications, in which 6 of the 29 companies in the Fortune 1,000 replaced their finance chief in the first half of 2009, for an annualized rate of 42%, way up from 22% last year; and life sciences, which moved up from 11% turnover to 16% annualized.
Another noticeable trend is toward more women taking the finance chair. As of June 30, 9.3% of the 1,000 companies had a woman heading finance, but 14% of the CFOs hired in the first half of the year were women.