The demand for finance chiefs is growing. Yet more companies are replacing their CFOs. Even so, CFOs are a lot less worried about AI taking their jobs. Confused yet?
Don’t be. All three of these scenarios can be true at the same time, depending on the market and business sector — and which expert survey you’re reading at the moment.
Financial pros are facing strong headwinds, for sure, as companies strive for leaner operations, right-sized staffing and revenue growth. Businesses will need financial leaders who embrace technology and adapt quickly to changes in their sphere.
Controllers, CFOs Needed to Bridge Gaps
The demand for finance decision makers who are capable of steering a business through a transition surged in 2023, according to High-End Independent Talent Report: Securing the Optimal Mix of Skills, Capacity, and Expertise, from Business Talent Group (BTG).
“Requests for interim CFOs rose 46% year-over-year, and demand for senior vice president and VP-level finance talent such as controllers and heads of financial planning and analysis (FPA) surged 114%,” BTG found. “Requests for talent skilled in financial controls, accounting and audits increased 33% … and FPA and modeling needs increased 28%.”
Interim spots can turn into permanent ones obviously. More often than not the expectation is interim means interim — nine months to two years tops. Depending on the monetary package and experience gained, an interim opportunity may be exactly what an experienced controller, CFO or FPA expert is looking for.
The companies seeking these types of finance gurus are struggling mightily, and they don’t expect the process to get easier. “95% of executives anticipate difficulties securing the ideal combination of skills, capacity and expertise within their teams over the next three to five years,” the report finds. Employers’ top three in-demand projects in the finance realm are: 1) interim leadership 2) business processes, and 3) business intelligence and analytics.
Jobs are Changing Hands Fast — Who’s Filling Shoes?
CFO turnover is on the rise, at least among publicly traded companies, according to Russell Reynolds Associates (RRA). Eighty-two CFO positions changed hands in the first quarter of this year. That’s roughly a 4.5% turnover rate among companies listed on the 12 stock indexes.
The churn rate for CFOs is higher (5.8%) for companies on the S&P index. That’s the highest turnover of chief financial execs since Q1 of 2021 when the rate hit 6.4%. The recent uptick suggests “that as economic uncertainty becomes the new normal for organizations, the trepidation to replace CFOs has dissipated.”
Women are taking on a higher-than-normal percentage of open slots. “While women remain under-represented in the CFO role, of the 82 CFOs appointed, 20 were women — the highest number of women appointments since Q1 of 2021.” Also: 55 of the 82 new CFOs were promoted from within their companies.
Whew! Fears of Being Replaced by AI are Waning
Not all finance chiefs are on solid ground these days, as the RRA report shows. But at the very least, people replacing people is the continuing trend for the foreseeable future. The more finance pros learn about AI — its strengths and limitations especially — the less they fear for their careers.
Case in point: 27% of CFOs and senior finance execs think AI could replace them, according to a new SAP Concur survey. Last summer SAP Concur reported that 68% of finance leaders were worried their jobs could be at risk.
Why the dramatic swing in sentiment in such a short time? Familiarity for one. “Anxiety about the existential threat from AI has eased as CFOs get used to the new technology,” says SAP Concur’s head of market strategy Christopher Juneau. “CFOs are pushing ahead with deploying AI but admit their knowledge is highly limited.”
Let’s give credit to finance leaders for accepting the inevitability of AI, while admitting they’re not as up to speed as they’d like to be. “58% of finance leaders say they understand very little about AI in finance, while just 4% say they have strong knowledge,” says Juneau. “90% of finance leaders said the critical role of the CFO today is to prepare business for the unexpected, and that regulation and reducing
risk were crucial concerns. This implies that CFOs urgently need to understand how AI can amplify and reduce risks in areas such as ethics, security, copyright and bias.”
The 300-plus CFOs and senior finance execs surveyed by SAP Concur say they expect AI to have the strongest impacts in these four areas:
- more accurate forecasting — 67%
- better risk management — 64%
- automating mundane tasks — 64%, and
- improving accuracy — 61%.
