Five mistakes Companies Make When Hiring CFOS

In the past 10 years, my firm has recruited employees for some of the fastest-growing companies in the US, and in the process, we have found a direct correlation between the level of care spent in hiring key executives and the achievement of financial success. The position that matters most in this regard is that of the chief financial officer (CFO). Here are the five biggest mistakes we’ve seen companies make during the CFO recruiting and hiring process:

• Running ads on job boards for critical positions. Don’t get me wrong, using job boards and/or contingency recruiters is still the easiest way to find potential employees. Unfortunately, it’s also the surest way of finding unemployed people who may not be the cream of the crop. When you cannot afford to make a mistake in filling a critical position like that of a CFO, it is best to use a referral network or an industry-specific, retained recruiting firm that specializes in your sector.

• Sending the candidate away without homework. At some point in the interview process, you should always assign homework to the candidate; i.e., the creation of a financial business plan for what he or she would hope to accomplish during the first 90 days on the job. This gives you a better understanding of the candidate’s thought process and passion for the position.

• Hiring candidates who remind you of yourself. Always hire employees who compliment your skills. As an entrepreneur, you’re inherently a risk-taker, so hiring a carbon copy of yourself could result in a CFO who takes too many chances.

• Forgetting to use benchmark tools. Use personality profile tests to benchmark your company’s top performers and compare them with the job candidates. Over the years, we’ve had impressive results from tests like Caliper and DiSC.

• Not field-testing your candidates. Would you buy a car without taking it for a test drive? It’s important to invite the candidate to spend a day with you in your office to evaluate the potential fit, as well as judge how they get along with your team.

Ultimately, the CFO you hire says something about you to your clients and customers. As Dr. Bradford Smart wrote in his book, Top Grading, “The ability to actually hire the best is what distinguishes premier companies from mediocre ones.”

Deam is the CEO of Roys & Associates, an executive search firm that specializes in recruiting for emerging- growth companies in the technology, life sciences and renewable energy industries. E-mail Deam at [email protected].