Introducing Our Guest Author Dave Arnold
Here at BVOH, we value diversity of thought and opinion. Many of the thought leaders in the search industry and beyond provide valued insight to the companies we serve who are in need of the very best finance and accounting talent. With that in mind, our team would like to introduce you to our guest author, Dave Arnold. Dave is the President of Arnold Partners, a retained executive search firm specializing in the placement of CFOs and Audit Chairs, and a trusted voice in the marketplace. We asked him to lay out some of his personal opinions on the 2023 employment market and are happy to share them with you.
The Tech CFO Employment Market For 2023
Anyone familiar with my work may note that I recently mused in my last blog in early October about trying to read the economic tea leaves. But as we flip the calendar once again, it is already time to reevaluate the Tech CFO marketplace for the coming year.
As fast as the economy seems to shift, this may indeed become a quarterly analysis – so, many factors seem to be at work, and global, federal and local economics all seem to shift the outlook from day to day. If the CFO market had a volatility index, it would clearly indicate we are in a very volatile market.
Optimism for CFOs In The Tech Market
My overall assessment for CFOs in Tech remains very bullish. Why? For one, there are not enough CFOs to meet the demands of the marketplace. As the role of the CFO continues to become more complex and broader in scope, it only puts increased pressure on companies to attract the talent they need to execute.
Secondly, even in an uncertain macro-economic time, the need to have a solid CFO in place is clearly more important than ever. Two items in the news recently brought this point to bear. One was the sentencing of Elizabeth Holmes to Federal prison for 11 years for fraud. The second was the instantaneous meltdown of the crypto exchange FTX.
What both companies had in common:
- Very poor internal controls
- Non-existent Boards
- No CFO
These may be easy outliers in the larger picture, but when A-level investors who were invested in FTX get burned, you can count on the diligence into new investments going up and the demand to have a CFO coming earlier and louder from the investment community.
The CFO is the keeper of the assets and demand will continue for this critical role. Given the large amounts of dry powder the VC community has to put to work, they will likely be coming back to the investment table – just with a higher bar for corporate integrity and compliance.
For CFOs, Caution May Be Prudent
CFOs should be extra cautious in today’s finance and accounting job market. The valuation issues I discussed in October are still in play. If you are a CFO making a critical choice about where to spend the next several years of your life, do your due diligence to ensure the new opportunity is stronger (overall) than your current role and make this decision carefully.
The Tech Market Wins Long Term
What constantly amazes me is the level of ingenuity and reinvention in the technology field. If you sit back and look at what has happened across any element of human endeavor, you will see technology at work, constantly improving and changing the way we live and communicate.
There are big bets playing out that will either become major wins or epic failures. Twitter’s transition, for example, and Meta’s big bet on virtual reality is bold—but only time will tell on how much success they see. These companies provide a number of insights we can glean from the recent tech layoffs as well. Overall, the tech industry finds a way to reinvent itself repeatedly for the better.
And in the biotech and medical device areas, we are at the forefront of game-changing technologies that are scratching the surface of the market opportunities.
Software development is happening faster and faster and solving ever more complex problems. Tech may see some hits and the stock market has certainly seen better days, but I would not bet against the sector long-term. Bottom line? The need for CFOs will not be going away.
So, What To Do…
Many CFOs are hunkering down right now – the fear of change may be on the high side. If you receive a recruiting call, it is always my recommendation to return it or at least gather more information on the company seeking a new hire. Trust in this environment is paramount: trusting the recruiter, trusting the CEO and trusting the investors are all critical as you evaluate a possible change of seats.
Perhaps your own company is underwater on its valuation – not hard to believe when we saw private rounds priced at 100x revenue in 2021. True, these valuations will probably never come back, but that should not be the sole reason to run for the door.
Perhaps the next round will be more down-to-earth, and options will reset. We are starting to see this happening. If you are in a good place, your CEO and executive team are in good shape and have a reasonable path to success. Perhaps 2023 is just that: a time to hunker down and improve the position you have.
If you are in a VP role and hoping to find your first CFO role, perhaps it is an excellent time to take a thorough inventory of your skills and experiences and make a resolution to fill some of those gaps in 2023. My belief is that, barring some catastrophic event in 2023, the tech employment market in general-and specifically for CFOs-will be very strong by fall if not sooner. Happy New Year!
Dave Arnold is the President of Arnold Partners, a retained executive search firm specializing in the placement of CFOs and Audit Chairs. We serve the technology industry on a national basis for both Venture Capital-backed and publicly-traded companies. More information on Arnold Partners can be found at: www.arnoldpartners.com
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