By: Bob Prather, General Manager
With nationwide unemployment rates persisting at record lows, companies are facing the most competitive accounting and finance talent market in more than a decade. Qualified talent is in short supply and the gap between supply and demand is only widening. The unemployment rate for accountants is just 1.8 percent and the unemployment rate for financial analysts has fallen below one percent, according to the Bureau of Labor Statistics. In this candidate-driven market, job seekers have the luxury of being more selective about which offer they accept. Unfortunately, many accounting and finance departments continue to follow a “business as usual” approach to recruitment that has not adjusted to current market realities. As a result, companies are making internal missteps that hurt their ability to make critical hires.
As Lucas Group’s CFO for eight years and now General Manager for our Accounting & Finance executive recruiting practice, I have a unique “dual perspective” into these hiring challenges. I know first-hand just how all-consuming daily demands can be for accounting teams. When every day feels like a fire drill, there’s limited time to focus on one of the most important tasks: hiring great people. As calculated risk-takers, we like to take our time, carefully weighing the pros and cons before moving forward with a decision. Additionally, as objective decision-makers, we are not used to proactively “selling” a candidate on an open position. It’s easy for us to assume that a candidate is as excited about working for our company as we are, and to forget that top candidates are fielding multiple, competitive offers.
To successfully land top hires in today’s competitive talent market, CFOs and accounting teams must turn an objective eye toward their internal hiring procedures. Having been on the candidate side, the hiring manager side, and now the recruiting side, I have identified three common internal missteps that consistently hold companies back from hiring top performers. By addressing these areas, your organization can remove barriers to hiring success.
Identifying and Correcting 3 Common Hiring Missteps
Hiring Misstep 1: Decision Paralysis
Recently, my team brought a top candidate to a company for an interview. The candidate ticked all the “must have” boxes: the right experience, certifications, and skills, and aced two interview rounds. The hiring team was thrilled with the candidate, but still hesitant to commit. They needed time to discuss their decision with more stakeholders and consider other options. By the time the hiring manager was ready to move forward, more than a month had passed– and the candidate had already accepted another offer. This is a classic case of decision paralysis, but it’s also an understandable one.
The cost of a bad hire can be astronomical– and no one wants to be tagged with making the wrong decision. SHRM estimates the cost of replacing a bad hire to be at least $240,000, not including additional costs due to lost productivity and the hire’s potential to adversely impact morale across entire teams and organizations. Add in an accountant’s natural inclination to be methodical and intentional in the selection process, and the desire to evaluate all options before committing seems only rational.
But finding the time to consider your options is also part of the problem. When every day feels like a fire drill and your team is under pressure to do more with less, it’s natural to put hiring decisions on the back burner. Of course, if you could hire the right talent then you’d have the support you needed to become more efficient. But when you’re jumping from one fire to the next, it’s difficult to set aside time to make hiring decisions. Consistently pushing hiring decisions to “next week” means you’ll lose out on candidates and have to start the process over again from square one, creating a frustrating lose-lose cycle.
The Solution: Strategically Accelerate the Decision Timeline
Blindly rushing forward without a clear plan can be as detrimental as moving too slowly. The key is to accelerate the hiring timeline through an intentional, methodical process.
- Align on requirements in advance. Bring all stakeholders together and determine selection criteria. An effective strategy for identifying requirements is to start by asking these two questions:
- What is the main problem this hire will solve?
- What skills will the hire need to solve this problem?
Next, I recommend dividing your evaluation criteria into “required” versus “preferred.” When your organization is fully aligned in advance on candidate requirements, the interview process will advance smoothly and on schedule. Aligning on requirements will also help prevent the perception that your organization “can’t make a decision” or “doesn’t know what it wants”– two red flags that can quickly alienate top talent.
- Beware the “perfect candidate” trap. One reason the search process can run so long is that companies are looking for an idealized “perfect candidate” who does not exist. Currently, demand for technical skills like SEC/financial reporting compliance, internal auditing expertise, and budget forecasting is extremely high. When organizations do find talent with these technical skills, there is no guarantee that all the required intangible skills will also be present. And so organizations continue to search for their perfect candidate, afraid that choosing anyone else means they are settling. With near zero unemployment, stay realistic about what is possible in the current market. I am by no means advocating that a hiring manager settle. However, you may find that you will need to prioritize “preferred” skills or experience sets to identify the most important. If the candidate has the right soft skills – a passion for learning, taking initiative, and driving change – you may find that other hard technical skills can be taught successfully.
- Communicate with consistency and transparency. Respect a candidate’s time. When you tell a candidate you’ll be following up with them next week, follow up on schedule. If your timeline changes, let the candidate know. Candidates who are kept in the loop are often more comfortable with a longer decision-making process. They feel like your organization respects their time and that they’re a priority to your company, increasing the likelihood they’ll be excited to accept an offer.
- Know when to make the offer. One of the most significant challenges a company faces is knowing when to commit to a candidate and make an offer. Even if the entire team is on board, it can be tempting to interview just one more candidate or take just one more week to think things over. Now that I’m on the recruiting side, I see how dangerous this thinking can be, since it’s often the “let’s take one more week to think about it” decisions that cause companies to lose out on their preferred candidates. This is also one place where a recruiter can provide valuable perspective by gently reinforcing a sense of urgency and keeping the team focused on the primary objective: hiring trans formative talent.
Hiring Misstep 2: Failure to Sell Candidates on Your Company
Your company’s reputation – its “employer brand” – has a significant impact on your ability to recruit top talent, specifically passive candidates. Passive candidates are professionals who are currently employed but may be open to new opportunities– should the right opportunity come their way. Your employer brand is key to reaching these professionals. Think of your employer brand as your HR calling card: it’s what gets passive talent excited to learn more about career advancement opportunities at your company and consider interviewing. In fact, with a strong employer brand, these candidates may already be interested in working for your company before you even approach them, thanks to their familiarity with your company’s offerings, culture and benefits.
A strong employer brand may get top talent in for an interview, but you’ll still need to “show well” during the interview process to close the deal. Today’s interview process is not just about assessing a candidate’s qualifications and determining if he or she makes the cut. The candidate is also evaluating your company, determining if the current position and growth trajectory align with their professional goals. Show well during the interview process and your organization will be in prime position to secure your first-choice candidate.
The Solution: Strengthen Your Employer Brand
It’s a bruise to the ego but true: internal pride in your organization does not always translate into a strong external employer brand or even showing well during the interview process. Don’t assume your employer brand is strong. Objectively assess where your company stands in the market and why top talent would want to join your organization– and then spread this message.
- Assess where your employer brand currently stands. Be aware of your reviews on employer rating sites. While you cannot directly control the quality or quantity of your company’s reviews, these reviews are still useful for giving a general overview of marketplace sentiment. If there are consistent criticisms about compensation, management or promotion opportunities, the candidate may bring these concerns up during the interview process. Consider the best way to proactively address them.
- Speak to the candidate’s needs. Consider how to market the role and your company by speaking to the candidate’s professional needs. Be sure to answer the “why do I want to align my personal brand with this company?” question. Highlight the opportunities that are most important to the candidate, such as meaningful work on specific projects, learning a new skill, or managing a team.
- Show well. Once you bring employees in for the interview, ensure their experience matches their expectations. Everyone involved in the interview process, from the interview team to the front desk receptionist, must be prepared to deliver a consistent message aligned with your employer brand. Reinforce what makes your company an exciting place to work and why this specific opportunity is the ideal fit for the candidate. Finally, help the candidate envision their future at your company. What is the promotion pathway like?
- Partner with a recruiter to address employer brand challenges. If a weak or unknown employer brand is hindering your recruitment efforts, an executive recruiter can help. An executive recruiter’s job is to understand what a passive candidate is looking for in their next position. The recruiter can then speak to opportunities at your company and the specific role. For example, if the candidate is concerned about a promotion pathway or compensation, the recruiter can address these concerns behind the scenes. This ensures when the candidate goes in for the interview, everyone is on the same page and primed for success.
Hiring Misstep 3: Lagging Market Assumptions
After all the effort that goes into recruiting top talent, showing well during the interview and then selling your first-choice candidate on your company, eventually the process turns to one inevitable conversation: money. Remember, candidates are fielding multiple, competitive offers. Drawing an arbitrary line in the sand over compensation that is based on outdated market assumptions can mean all your hard work is for naught. If you can find someone who has the skills, experience, and education needed for your position, and who also aligns with your company culture and fits with your team, don’t let arbitrary financial constraints prevent you from making the hire. In some cases, this may mean paying on the higher side of market value. If it’s the right hire, you have to be willing to pay.
The Solution: Watch Out for “Pennywise and Pound-Foolish” Thinking
Top talent needs to feel wanted. If you spend too much time and energy splitting hairs over compensation, you risk losing this talent to a better offer. Even if this talent does join your company, they may be less engaged and motivated from day one due to protracted salary negotiations.
- Shift your mentality. A new hire is not about making a “good deal” on an employee but an investment in your company’s future. Focusing too rigidly on the bottom line or an immaterial salary gap could cause you to miss out on a true game-changing hire. These are the hires who will “run through the wall” for your team. Focus on this value, not just the salary number.
- Understand the true value of the right hire. The right hire is not a drag on overhead. This could be the person who saves your company millions by uncovering a previously overlooked cost-saving opportunity. This could be the person whose dynamic personality excites the entire team, pushing everyone to excel at a higher level. Or, this could be the person who is so enthusiastic and passionate about your company that they boost your employer brand and attract even more game-changing talent.
Charting a New Hiring Course: Partnering with an Executive Recruiter
From changing regulations to fierce global competition, the accounting and finance landscape is evolving rapidly. Companies need strong professionals who can combine technical and business skills to deliver objective advice that turns numbers into actionable insights, identifying new business opportunities and improving performance. To land this game changing talent, you must be willing to candidly assessing your current hiring process. An honest assessment is key to identifying and correcting the common mistakes – decision paralysis, a weak employer brand and lagging market assumptions – that can hold you back from hiring success.
Changing how your company approaches hiring won’t be easy and it won’t happen over night. An executive recruiter can act as a consultative partner helping to support this transition. We facilitate faster, informed hiring decisions by connecting your team with the right passive candidates who will be open to the opportunities at your company. Recruiters can also help facilitate salary negotiations by ensuring the candidate and your company is aligned with the same compensation expectations, reducing the risk of financial disagreements.
Successful talent recruitment will lead to new hires that act as employer ambassadors, attracting more star performers to your company – and help you navigate those seemingly endless fire drills.