The Challenge of Recruiting a CFO in a Small Town

Companies based in small towns located far from major population centres face unique difficulties in recruiting qualified people in general, and find it especially difficult to recruit qualified executives.

The Only Game in Town

In many cases, if the company in question is of any size, they’re the town’s biggest single employer and the neighbouring businesses will be of the mom and pop variety. The potential for recruiting qualified people from those other businesses will relatively small. Most people at the management/executive level will probably be part of the family running the business, or so deeply entrenched that they’re next to impossible to recruit.

Welcome to the Ozarks

I recently completed a search for a company located in a lovely small town with a population of approximately 5,000, nestled in the Ozarks region of northwest Arkansas. This town has very little industry of any size except for my client, a $20M specialty manufacturer.

The client is an hour’s drive from any metropolitan centre. Fayetteville, Bentonville (home of Walmart) and Springdale are the closest cities, and they are not that large in and of themselves. But all put together they have a population of about 200,000 people and a significant industrial base, so there’s a good pool of qualified professionals and executives to draw upon.

My mandate was to find a VP Finance with direct experience in the particular industry sector my client happened to be a part of. In addition, my client wanted someone with a operational background as the intent was to eventually transfer much of the owner-manager’s operational responsibilities over to this position.

Here’s the Rub

The industry sector my client is in (the sector candidates needed to have experience with) is very specialized. If this search was conducted in a very large metropolitan centre with a large and diverse industry base such as Chicago, Toronto or Miami, for example, the search would have been a whole lot simpler. As it was, while there were a few companies in the relevant sector in northwest Arkansas, I knew that I’d have to look pretty far afield to drum up a decent short list of candidates with that kind of industry experience.

Must-Have versus Would-be-Nice

In any search we draw up a list of the client’s “must-have” criteria and the “would-be-nice” criteria. I usually encourage the client to set down as many would-be-nice criteria as they can think of. And in most cases, I’m able to deliver on most, if not all, of those criteria. In this case however, I counselled my client to be very specific and strict with his must-have criteria but to be prepared to compromise with his would-be-nice criteria if he wanted to have a decent number of people with relevant industry experience on his short list.

Dealing with the Would-Be-Nice Compromises

Relocation costs: Being a smallish company, my client would obviously prefer to hire someone local and not to be on the hook for relocation expenses. But since we needed to widen the search outside of the nearest metropolitan area in order to find viable candidates, the client needed to accept that this cost was part and parcel of the search.

Stage of career: My client is 54 years old and in a perfect world, he might want to step back from the business and hand the reins over to his VP Finance, assuming that person had also assumed responsibility for operations by that time.

The implication of this was that the new VP Finance would be somewhat younger than my client so he or she would have lots of runway left in their working life once the client stepped back and handed over the day-to-day running of the company.

Almost all of the candidates we identified who had the relevant industry experience and who would need to relocate for this position had families. And as much as they were intrigued at the prospects of this position, they were not willing to uproot those families. All of the out-of-town qualified candidates who were willing to relocate were empty-nesters, approximately the same age as my client.

The good news is that 50 is the new 40 for most executives these days, and many people in their early 50s, should they so desire, can reasonably expect to stay in the saddle for at least the next fifteen years.

IT and HR: My client wanted to hand over responsibility for IT and HR to the new VP Finance immediately (and who can blame him ?). All candidates had some exposure to managing both functions but in the case of IT, the depth of experience with systems (and in particular ERP implementations) varied considerably. We concluded that if the best candidate was light on this requirement, they should be able to get up to speed with the assistance of an outside consultant in an acceptable amount of time.

Timing: Almost everyone who calls me looking for a CFO or VP Finance to fill a vacant slot wants somebody yesterday. This client was a little more reasonable but he was anxious to get someone hired as quickly as possible. And if he had been located in a major population centre and didn’t have this particular “must-have” criterion, he would have been interviewing qualified candidates within a month.

Sometimes you luck out, but I counselled the client that he should be willing to accept that this search was going to take significantly longer due to his location and requirement.

In the end, we did fill the VP Finance position with an excellent candidate. He has very relevant industry experience, is an empty nester, and was willing to relocate to northwest Arkansas. Fortunately, he has very relevant IT experience and has managed the HR function so there were no compromises on that front. The time to complete this search was almost exactly three months from the word go to the new VP Finance signing off on the offer.

The moral of the story is that you can always get there from here. But you need to be realistic in your expectations and willing to compromise on some of your wish list.