Holding tight to the devil that they know, CFOs are being conservative about switching employers during the recession. They do still leave — or lose — their jobs much more frequently than CEOs, though. When they do find a greener pasture, they’re likely to get some help with housing costs. So says Tom Kolder, president of executive search firm Crist|Kolder Associates. Kolder spoke with CFO.com about the current state of the market for finance talent and the expansion of the top finance job. An edited version of the interview follows.
What are you seeing in your CFO search business right now?
Executive placement is much more difficult than in the past. Candidates are taking the approach of sticking it out in a safe port and delaying any kind of a risky move, especially in finance where many executives have more of a conservative mindset. I’m hearing people say, “Thanks for the call, but while I know I’m not going to stay with XYZ Company forever, I’m not sure that the time is right to move my family while the markets are so unsettled.”
And what often happens when a person is lured away to Company B is that it creates a vacancy in Company A, and there’s a domino effect. If that first person doesn’t decide to move, you don’t have all of those other blocks that will fall.
So it’s all about people being less willing to relocate?
That’s part of it. When you’re going to a new company, you can do a tremendous amount of due diligence, but there’s always going to be a surprise or two. And I think people believe the chances that that surprise could be a fatal one are greater now.
When we do get a deal in place, the relocation issue is rearing its head in another way, too, which is in real estate values. Every deal we work on these days has a real estate component that’s testing the flexibility and the willingness of our clients to get creative about helping people get out of one market and into another. I’ve seen candidates with anywhere from $100,000 to $1 million of undervalued equity in a home. In certain instances, where previously a company might have used restricted stock grants or something like that to make somebody whole on an equity tranche that hadn’t vested yet, for example, now they might do the same thing to help them get through a loss on home.
Your new Volality Report, which tracks the movement of C-suite executives in 2008, shows that there was a decline CFO turnover, and other studies have shown that trend to have continued this year. That’s a little bit counterintuitive, isn’t it? I would think in an environment with so many companies seeing disappointing results, there would be a lot of turnover at the top.
It’s true — you would expect to see that. And there is still plenty of movement that is totally driven by the other end of the equation, where, rather than the CFO deciding to leave for a better opportunity, the company says, “We’re not satisfied, we’re making a change, this person’s gone.”