Archer Mathieson CFO Forum: Raising finance; the government’s role in helping growth; hiring senior talent
2nd June 2011
Customer complaints about banks are at a ten year high but it’s not just consumers who have cause for complaint, as we heard from the group of CFOs who came together for our recent CFO Forum event held at The Wentworth Club, Surrey, on 13th May.
Raising bank finance, our round table heard from one contributor, has become nigh-on impossible with the list of demands or guarantees both long and bordering on the absurd. These views are not isolated either; this week banks are back in the firing line for falling short of a previous commitment to lend £19bn to small firms under the government’s ‘Project Merlin’ pact. No wonder David Frost, director general of the British Chambers of Commerce, talked recently of “a crisis of confidence between businesses and banks”!
The CFO Forum attendees heard how one CFO, having successfully raised 50% from private equity to finance a new venture sector, had to abandon plans for lack of matched funding from a bank; and this for an established and profitable business! Attendees agreed there had been a ‘fundamental change in mindset towards risk and venture-backing’.
Overcautious, inflexible attitudes plus decisions now so long and drawn out that companies are having to stall investments or find alternative funding sources from their own cash reserves, or elsewhere. All of these factors had panel members nodding in recognition. And when you can get a bank to lend, it seems it’s only on punitive terms: one CFO told how his business had been charged £1m in banking and other fees to raise £8m.
The debate moved on to the question of raising finance through private equity, felt by many to be a more ‘open door’ solution – especially for those with the right credentials; one panel member backed that view with the story of a business contact who recently raised £5m due to impeccable personal experience and references.
Discussion then moved on to a more general theme of government’s role in helping or hindering growth. Not surprisingly, opinions were a bit guarded only one year into a new administration but most felt the signs of clear success were still too few and difficult to detect with any certainty.
The next topic had people offering more concrete views: hiring senior finance talent. The discussion kicked off with the question of skills shortages and the need for technically competent people to become more ‘well-rounded’ commercially. “We’re seeing people who are very strong on the technical side but that’s not enough. We also need finance people to be good communicators who understand how the business operates and the role of partnering,” said one.
Another asked if others were finding a dearth of good people at financial controller level and was greeted with lots of knowing nods. There was a general viewpoint that more accountants needed to be trained by the various institutes to meet current demand and an agreement that firms will increasingly have to grow and develop their own talent to fill shortages. But not everyone has the will or ability to follow the likes of Unilever and Proctor & Gamble in this respect, it was noted.
Some readers might be surprised at what’s happening in the jobs market at present. Here’s what we’ve noticed recently:
- Finding a new job or hiring someone is taking considerably longer than
before. In the mid-tier, £80-150k finance management bracket, the hiring
cycle now takes circa 5 months, whereas it used to be about 12 weeks.
- Eighteen months ago we hardly saw anyone looking for a new finance role
who was already employed. That’s changed dramatically, as people with
jobs who had been playing a ‘wait and see’ approach, are now actively
looking.
- Even very good people are finding it takes them 6-7 months to find a new
role.
- Employers are increasingly prescriptive: mandatory checklists of ‘must have’
skills and experience are being used and rigidly stuck to.
- Meanwhile sector experience has risen in importance, so if you want to work
for a US-based, high-tech multinational, you won’t stand much chance unless
you’ve recently worked for one. Ditto retail and other vertical sectors.
If you’re reading this and wondering how to navigate your way through this new hiring environment, come and talk to us – whether you’re looking for work or looking to recruit.
This event was the latest in a series of regular Archer Mathieson CFO Forums. Our Forums are intended to be small events where everyone attending has an opportunity to contribute. By facilitating these events we also create a like-minded professional community who are able maintain contact with each other; sharing opinions, experiences, supplier information etc via our web based forum. If you would like any more information on the above or would like to become involved, please contact Emma Webb on 01753 754333 or emma.webb@archermathieson.com
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