When you were a bright, young, up and coming accounting professional, you probably thought that the job market was pretty good, even hot at times. Excepting the 1990-1992 recession, your impression would have been that the demand for people like you and your cohort was constant and consistent. Job boards would have been full of ads relating to jobs in budget analysis, management reporting, audit, financial reporting and a host of other finance and accounting positions. Your phone would have rung with great regularity with recruiters of all stripes trying to discern if you might be interested in making a move. Apocryphal stories would circulate of some guy specializing in the high-tech sector at Ernst & Young or PWC making a move to an internet start-up for a package that was more than double his compensation in public accounting.
Just Waiting for the Call
Options were plentiful at this age and stage and many people make their first, second and even third career moves without ever having to do anything other than respond to whatever next best opportunity the headhunter happens to approach them on. Based on this kind of experience in their early careers, many accounting professionals make the assumption that the same cornucopia of opportunities exist today.
However, twenty-something accounting professionals have a habit of morphing into forty-something finance executives. Instead of habitually thinking that the market is hot, the more common paradigm at the executive level is to assume that the market is slow, with an underlying assumption that it’s a function of the economy.
It’s Not the Economy
Nonetheless, the economy that you think is so slow is still generating financial analyst, accounting management, risk management, management reporting, etc. jobs in the same numbers that it always has. And if you were the belle of the ball twenty or so years ago, why do the opportunities seem to be so few and far between now?
Three Reasons Your Phone isn’t Ringing
Reason number one is that once companies hire their tranche of entry-level accounting professionals, they’ve got an internal bench of talent. Although they may have had to hire from outside for the financial analyst position, they can promote from within when the manager of financial reporting position becomes open. If and when a large, well-run company needs to hire at the executive level, they have a deep bench to draw upon so they usually don’t need to go outside to hire.
Reason number two is that finance executives tend to stay in their positions longer so there is less volume of movement in the market.
Reason number three has to do with how the demand curve for finance professionals shifts as they get more senior. The majority of qualified accounting professionals start their careers with very large companies but many of them find themselves working for much smaller organizations in the later stages of their careers.
SMEs are Big Business
The greatest demand for entry-level accounting professionals comes from the large Canadian and multi-national companies. Typically, the larger the organization, the greater the demand. Small and medium-sized enterprises (SMEs) on the other hand, rarely hire entry-level accounting professionals. The higher end, value-add finance functions are handled by either the controller or vice president of finance, or both.
A typical accounting professional may start on in a very large auto parts manufacturer and percolate up through the ranks for three or four moves. But eventually they may find that the jobs available become fewer and farther between and in order to get a bigger job, they need to move to a smaller company.
So while very large companies comprise the biggest part of the job market for finance and accounting professionals, small and mid-sized companies make up the biggest part of the financial executive job market.
The Invisible Market for CFOs
The challenge for finance executives working in the world of SMEs is that the job market is largely invisible.
When large companies recruit for their executive teams, their default position is usually to hire a headhunter. If an executive recruiter needs to find someone at the executive level in securitizations for a bank, their recruitment team will reach out to all the senior securitization people in the banking community as well as advertise in the national papers and post the position on relevant job boards. Anyone in that world will get directly approached or receive word of the position second hand. Executive level finance positions in large companies are like large boulders being tossed into relatively small ponds – pretty much everybody feels the ripples.
However, top finance positions that open up in the world of small and medium sized enterprises are more analogous to very small boulders being tossed in a very, very large pond – hardly anyone feels the ripples.
Owner-Managers Rely on Referrals
Unlike much larger organizations, there is usually no common protocol for hiring executives in SMEs. A CEO in this market may start the search by asking for a referral from their public accounting firm. If that approach doesn’t turn anyone up, they’ll probably ask around at their club or social peers if they know of anyone. They might also put out feelers to anyone they know professionally or personally who happens to be a CPA. And of course, if they’re plugged into LinkedIn, they’ll usually go down that road as well.
And They Get Results
These tactics will produce candidates. The public accounting firms would be delighted to plug an alumnus into that job, guaranteeing that the client stays a client. Friends and neighbours will usually know a senior finance person who needs a new gig and a job posting on LinkedIn will inevitably result in a slew of resumes of people actively looking for a new job. Once the hiring authority has what he or she feels is a reasonable number of resumes, applications are closed and for all intents and purposes, that position disappears from sight.
You Won’t Ever Hear About 90% of the CFO Jobs on Offer
Whether these tactics are the most effective way to recruit at this level is the subject of another article (spoiler alert: they’re not). The point is that most of the finance executives who should have heard about that position did not and will not. There’s lots of demand CFOs and vice presidents of finance in the SME market. But because this market is so disparate and the recruiting protocols so varied and informal, the demand just doesn’t create enough noise to get on people’s radar screens.
At the Mercy of the Market
By the time a CFO working in a SME decides to actively look for another position, they’re at the mercy of the market and there’s only so much they can do about their search. There are techniques to turbo-charge one’s job search but there isn’t room to discuss them here – these techniques will be the subject of a future article. For most financial executives in this market, once they’ve scanned the job boards, reached out to their network and contacted the headhunters they happen to know, all they can do is wait. And it’s very common for someone at the vice president of finance level to wait a year or more for the right position to come along.
It may sound a bit mercenary, but given the nature of this part of this job market, CFOs would be wise to keep their eyes and ears open at all times, even if they’re perfectly happy in their current position. As soon as they start getting the sense that they’ll need to make a move in the distant future, they should start actively looking at the market. It may happen that the right position crops up a bit before they’re really ready to move, in which case they have a difficult decision to make. But it’s always better to be in a position of dealing with untimely options than having no options at all when you really need one.