The Recruitment Problem
The recruitment problem is basically the difficulty that small business has recruiting high quality, motivated finance professionals. Finding candidates with a high level of experience is an important factor. These are people that, not only have the technical skills, but have worked with successful teams and understand what management needs for decision making.
They also need to understand how to build and nurture the foundational structures that will enable them to fulfil their role and really make a difference to the successful performance outcomes of the business.
To understand the causes, let’s break the potential candidates into two main categories.
- Highly skilled and experienced finance professional
- Developing finance professionals
The second category need to work with members of the first category to understand how to support a business and its management teams in the most productive manner. The only other choice is to learn from your mistakes and do lots of research. This is a costly way to achieve the desired outcome. How costly? That depends on the nature of the mistakes that get made.
For many small businesses recruiting someone from the first category is just not possible. There are many reasons for that. Members of the first category will need
|– An appropriate remuneration packaged
|– Ongoing career development opportunities
|– Prestige associated to the company they work for
|– To be surrounded by strong teams and high-quality systems
In most cases, small businesses cannot supply these to the candidate. Therefore, any attempts to recruit this type of candidate is likely to be an exercise in frustration.
And if they are successful in recruiting this type of candidate, it may be a worse outcome than not finding someone. The new recruit may be disappointed by poorly developed systems that they are being forced to work within. They may be frustrated by the different management culture that does not value what they do sufficiently. They may also be frustrated by the lack of knowledge and skills of the team members they are working directly with.
Consequently, most small businesses will recruit from the second category when developing their finance department. This often means they are not addressing the problem of building the finance department that will enable them to successfully grow into a larger and more profitable business. Instead, the finance staff will work with the systems and structures that are already in place.
Strategies for addressing the problem
The way to address this problem is to find a contracted resource to help you develop the strategies & systems that will enable you to have a high, value-adding finance department. A part of the mission of that contracted resource will be to help you develop your internal finance department over time.
The pace with which the internal team should be developed will depend on a range of factors. As the final Accounting Gap problem will show, the size of the business and the profit levels achieved will be a key determinant of the timeframe within which this can be achieved. For many businesses, this could be greater than 5 years.
It is very important to establish that the contract advisers have the experience and knowledge to complete the project, and that they can provide critical financial management input across the entire period that they are involved.
With the emergence of the virtual CFO industry over the past decade, there are now many options available for small businesses to find a suitable virtual CFO to work with.