Focus Search Partners’ two-part series, FP&A Insights, takes a thorough look at the new skill set required for today’s FP&A leaders. In this installment, we explore key strategies for attracting and retaining critical FP&A expertise in the private equity world. Both PE firms and the CFOs who manage their portfolio company finances can apply these insights to their FP&A recruiting and retention plans.
In part one of this series, we explained why FP&A is emerging as one of the most in-demand areas of expertise in the private equity world. This shift began roughly 24 months ago, with PE firms placing increased emphasis on FP&A skills when hiring new portfolio company CFOs. The trend is now extending beyond the C-Suite, as an increasing number of our clients are also installing a dedicated FP&A function to provide their data-driven CFOs with enhanced visibility into their investments.
But the FP&A professionals best suited to provide PE investors and their CFOs with the insights they seek are not limited to Excel gurus, as you might expect. What’s more, PE firms aren’t the only ones seeking this new breed of FP&A talent. To compete with public company recruitment, we want to ensure our clients understand the evolving FP&A skillset, as well as what attracts such talent to open opportunities in the marketplace.
FP&A Becomes More Data- and Tech-Driven
As CFO Dive explains, yesterday’s FP&A professional was “a recorder of historical financial events.” This was a function deemed important enough to be funded in public company budgets but few private ones. The most important skill needed for the role was the ability to create extensive spreadsheets showing past performance.
Juxtapose that with today’s FP&As professionals, who provide forward-looking, decision-making analysis and support through financial modeling and forecasting. To perform this role, they still need exceptional Excel skills, but they also need an in-depth understanding of business intelligence (BI) tools and the data that can and should be extracted from them.
The FP&A talent in highest demand right now can expertly manipulate data at the granular level and present it in a dashboard that provides both historical and future insights critical to successfully running a business. Additionally, they are able to confidently interpret and explain these insights to the C-suite, board of directors, and PE investors.
Many of our clients are starting with a sole FP&A contributor at the senior director or VP level. These highly sophisticated professionals are finance experts with 10 to 15 years of specific FP&A experience. They match FP&A job descriptions that typically include the following technical and non-technical skill requirements:
Senior-Level FP&A Job Descriptions
The Keys to Competing for Top FP&A Talent
It’s not enough to know what to look for in a Senior Director or VP of FP&A. PE firms and portfolio company CFOs who want to hire for these roles also need to understand what qualified candidates are looking for in a new position.
Candidates we’ve worked with say the following factors are critical in their decision to accept or reject an offer:
- The chance to make their mark by building an FP&A function from the ground up
- The ability to use lessons from past experiences to build a superior FP&A function
- A commitment by the hiring company to continue building out the FP&A team in the future
- Confidence that their insights will be valued and utilized by their employer
- A direct reporting line and/or open access to the CFO to provide support
- The possibility of dotted-line reporting to PE partners for greater exposure
- An innovative finance tech stack or the opportunity to create one
- A modern data warehouse or the chance to develop one
Once on board, if the above-mentioned promises are never or only partially met, an FP&A leader often becomes disenchanted with the situation. This is typically when they look for an exit. We have heard from a number of such professionals. For example, an extremely qualified FP&A Senior Director contacted us for help finding a better-suited placement for her expertise.
“Despite developing a comprehensive business planning process and an extensive dashboard filled with key insights, no one really used the information,” she said. “It was extremely demoralizing to know that my work could help them make smarter decisions but company leaders were mostly ignoring it.”
Given the high demand for FP&A talent, we quickly matched her with another PE opportunity. Had she been interested in moving to a public company, her resume would certainly have elicited multiple high-level offers from that sector as well.
All It Takes Is a Little Help to Source a Slate of Viable FP&A Candidates
PE talent partners typically have an established network of potential CFOs, but they may have more limited resources on the FP&A side since it is a relatively new function in the world of portfolio company finance. That can make it difficult to find appropriate talent, which unnecessarily delays the candidate search for someone to lead the FP&A implementation.
"For most of our partnerships, the FP&A function has been historically under-invested in at the close of the transaction, and management has never operated in an environment with institutional stakeholders. Leveraging Focus Search Partners’ interim CFO solution, we were able to stand-up daily and weekly flash reporting, month-end accrual-based financial reporting, and detailed cash forecasts that allowed for significant financial visibility and comfort immediately post-closing. With this stop-gap solution in place, we were able to be patient in picking the right long-term financial leader for our portfolio company. The Focus team was extremely thoughtful in screening, providing us with multiple candidates that fit the operational needs of the company while keeping in mind the cultural nuances of the organization."
At Focus Search Partners, we have extensive experience helping PE clients expedite a search for candidates to fill senior FP&A roles at their portfolio companies. Additionally, we have a go-to network of interim CFOs and VPs of finance. They can provide project-based FP&A firepower, giving you immediate visibility into your investment until the search for a permanent FP&A leader is concluded.
By Lynn Durant, Managing Director at Focus Search Partners
Ready to start a search for a Senior FP&A Director? Contact Focus Search Partners today.