Wanted: Strategic CFOs. Again.

The skills companies value in finance leaders continue to shift with the times, with strategic acumen now edging past capital-markets experience, headhunters tell the crowd at CFO Rising.

For a position as important as CFO, the requirements of the job seem to change with astounding frequency, driven by the macro trends of the moment.

In the first years after Sarbanes-Oxley took effect, many companies wanted finance chiefs with technical accounting skills and backgrounds as controllers. When the credit crisis set in, CFOs with capital-raising skills were suddenly in demand. Now, with hope emerging that an economic recovery is on the way, having the strategic bent to identify and exploit opportunities is coming to the fore. The revolving job description is one of the reasons CFO turnover is so high, although the churn rate has moderated somewhat during the economic downturn.

Those topics, as well as what finance executives should do to enhance their job-search prospects, were up for discussion by a panel of executive recruiters at last week’s CFO Rising West conference in Las Vegas. Panelists E. Peter McLean, Michele Heid, and Christopher Langhoff lead the financial officers practices at Korn/Ferry International, Heidrick & Struggles, and Russell Reynolds, respectively. An edited version of their question-and-answer session with Lori Calabro, editorial director of CFO Conferences, follows.

Has the supply and demand for finance professionals changed in the past year as a result of the recession?

McLean
: Our business is down 40% in the past year. It’s created a flood of available talent. And for clients who are recruiting, the searches are taking longer because they feel there’s an opportunity to look at a wider range of people; they’re not settling for the candidates presented on the first slate.

Langhoff: Turnover is obviously down and our business is off, but a lot of it is at the lower levels — controller, treasurer, investor relations, and financial planning and analysis. On the CFO front, I think turnover is still high. If any of your departments had turnover of 12% or 15%, you’d probably say that’s too high.

So CFOs are staying in their positions longer?

Heid: They are more inclined to stay with the devil they know than go with the devil they don’t know. In the Fortune 1,000, there was 18% turnover in both 2007 and 2008, and this year it looks like it’s going to be more like 14%. That’s a significant decline. One big factor is that disrupting and moving your family, at a time when the economy is volatile and the housing market is seriously suffering, is a tough pill to swallow right now.

A year ago, capital-raising experience was at a premium because of the liquidity crisis. What skills are in demand now?

McLean
: There’s been a quick sunset on the need for capital-markets expertise. We’re back to a focus on strategic and operational CFOs, real business people who have proven they are effective at driving value.

Langhoff: Capital-markets experience is more important than it used to be, perhaps, but what a lot of companies are looking for is the ability to communicate and interact with all the economic stakeholders — the board of directors and investor relations, as well as with Wall Street and the credit-rating agencies. The ability to own those relationships and represent the company well gives CEOs a sense of comfort that they need right now.

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