Most employees, no matter what their seniority, know by now that jobs for life are a thing of the pst.  Now, a small but growing band of finance executives is taking that to heart.  Europe is seeing steady growth in the ranks of interim CFOs-finance executives who move from company to company on short-term assignments, fighting financial fires, filling skills gaps on specific projects or simply holding the fort until a permanent CFO arrives on the scene.

The use of interim CFOs in Europe began in the late 1970s in the Netherlands which remains a leading market for interim finance managers. But in recent years, the practice has spread to the UK, where the market (including per diem and agency fees) for interim executives of all types is estimated to be between €600m to €750m a year, and Germany where the market is estimated at €80m to €140m a year. The practice has also made inroads in France, Italy and Switzerland, as well as Belgium, Spain and parts of eastern Europe. "This way of working is gaining acceptance, and I think the future is bright", comments Mike Jones, a UK-based finance executive with nearly a decade of experience as an interim CFO.

HAVE FINANCE SKILLS, WILL TRAVEL
For interim CFOs, life on the move has its advantages. As a way to help companies in urgent need of experienced executives, the business attracts CFOs who thrive in a crisis atmosphere. Most of the CFOs who have chosen this way of working say they enjoy the challenge of adaptiing quickly to a new environment, the satisfaction of achieving a defined goal and the independence of choosing their assignments. There’s also the money to consider. Experienced interim CFOs earn on average between €750 and €1,000 a day, not counting the fees that employers pay to executive search firms.

There are also disadvantages, however. Interim CFOs note that companies are not always completely clear about their expectations, and that obtaining co-operation from permanent staff can draw heavily on their powers of persuasion and diplomacy. Companies also tend to be conservative, preferring their interim finance chiefs to take on only the tasks that they have performed elsewhere, rather than stretching their skills in new directions.  "That may be, but I have never been in a situation where I was not able to learn from a job", says Paul McKoen, a UK-based interim manager.

Why do companies hire interims? The main reason is urgency, says Ludwig Heuse of a German interim executive search firm of the same name. "Companies will call us and say they want someone tomorrow, perhaps because someone in their organisation has just been fired, or has fallen ill, or perhaps because the CEO has just received some very bad news from his finance people and says, "’I don’t care what the current manager says, I want someone whose numbers I can trust.’"  

In a variation on that theme, companies will sometime assign their permanent finance directors to another job, either on a temporary basis or as a promotion. The incumbent might say, ‘Put someone in my place who will go away when I say,’  adds Jones. 

SKILLS SHORTAGES
 A second reason is a shortage of in-house skills at a time when the company needs a major project done – for example a merger or acquisition, a reorganization of the finance department, or a spin-off of an operating division. Companies also hire interim CFOs when they are having trouble attracting a permanent candidate because, for instance, they are on the ropes financially.  And finally, companies hire interims when their choice of a permanent CFO cannot join the company as soon as they would like, and "they need someone to provide a steady hand on the tiller," says Heuse.

Hiring an interim CFO, however, can raise issues of trust, particularly in an area that’s as sensitive as a company’s finances. But that concern is rapidly disappearing, notes interim CFO Jones.  "Companies realize they have no more reason to trust a permanent employee than a temporary one," he says.  "I succeed as an interim CFO by having a good reputation in moving from one role to another.  A permanent CFO or finance director may not necessarily think that way."

From CFO Europe, Volume 5, Number 6