CFO hiring boom in India: Surge in demand amid IPO rush

• Demand for skilled CFOs in India is skyrocketing like never before.
• Industry leaders predict that the high demand for CFOs is set to accelerate over the next year, particularly among mid-sized and fast-growing companies.
• Here’s a quick breakdown of the key insights as reported by the ET CFO (Economic Times).

Key drivers fuelling the CFO demand

So, what is driving this boom you ask?

There are three key drivers that you have to keep in mind;

• An uptick in Initial Public Offerings (IPOs) in India,
• Growing market complexities,
• And the ever-evolving role of CFOs in shaping business strategy.

Here’s a breakdown of the driving factors.

1. Rise of IPOs in India

In a year when global IPO activity has cooled off, India’s IPO market has emerged as a powerhouse.

Record-breaking IPO volumes, strong domestic inflows, and soaring listing gains, particularly in emerging sectors have contributed to India’s growth.

A report by Angel One Wealth highlights how India is winning the race, as reported by Times Of India.

• Despite a global slowdown, India’s IPO market captured 25% of global IPO volumes in the first half of 2024.
• 178 companies debuted on India’s stock exchanges in 2023, followed by China with 103 listings, the UK with 22, and the US with 21.
• According to the report, India now holds the top spot for mainboard-listed companies, surpassing 5,450 listings.

Now how does this impact India’s CFO hiring trends?

As India’s IPOs soar, companies are scrambling to bring in financial experts,

• Who can navigate Public market complexities and Regulatory compliance?
• Foreign capital inflows require CFOs who can handle intricate financial landscapes.
• Expertise in fundraising, managing risks, and handling M&A transactions is now highly valued.
• They need CFOs who are skilled in debt management and investor relations.

2. Growing market complexities

For established firms, the demand for CFOs is being driven by a confluence of market conditions, regulatory pressures, and the growing complexity of financial strategy.

Accelerated company growth: As businesses expand, they require skilled CFOs to manage the financial complexities associated with rapid growth, including capital raising and formal governance.

Capital-raising and M&A: CFOs are increasingly sought after to navigate intricate capital-raising processes and handle mergers and acquisitions, ensuring smooth transactions and strategic financial alignment.

Regulatory pressures: With heightened regulatory requirements, companies need CFOs who can manage compliance and oversee adherence to evolving regulations, especially in global operations.

International expansion: As firms grow internationally, CFOs play a vital role in steering complex financial structures and overseeing foreign market operations, making them essential for sustainable global growth.

3. Evolving role of a CFO

In the early stages, CFOs primarily handle operational finance. However, as startups grow, both in terms of revenue and operations, the need for a strategic CFO becomes paramount.

They require strategic CFOs who are more than just number crunchers. He/she must,

• Optimize capital structure,
• Handle investor relations
• Steer the financial strategy
• Help scale the business effectively,
• Manage growth
• Ensure compliance
• Prepare for significant liquidity events such as IPOs or acquisitions.

4. Other Factors

Shorter CFO tenures

The rising demand for CFOs is partly driven by a trend of shorter tenures in the position. Here’s why.

Frequent Job Changes

• Many CFOs are now opting for roles that offer equity incentives or the chance to lead an IPO.

Career Alignment

• New-age CFOs are prioritizing roles where they can align personal goals with the company’s vision; otherwise, they are likely to leave.

CFOs stepping into CEO roles

• Many CFOs are increasingly moving on to higher-profile or more lucrative roles.
• Over the past five years, numerous CFOs have transitioned into CEO positions.
• In many large companies, they are also leading as country managers or heads, subsequently advancing to Global COO or MD roles.

The CFO of the future

Want to know how you can be a part of this growing trend? Acquire the following skills, as mentioned by Brian Cabral, an Executive Search Professional to The Finance Story:

Strategic thinker

• Today CFO roles are more strategic than operational.
• The strategy comprises how you set up global subsidiaries, work with investors and private equity funds, and at the same time utilize your build versus buy strategy, which is extremely critical in today’s day.

The right motivation

• One of the key factors the board considers is the candidate’s motivation and how well it aligns with the company.
• Are you simply looking for a job for the sake of compensation, or will you be committed to putting in the time and effort required for the job? This matters a lot.

Cultural compatibility

• The board also considers if you align with the organization’s culture.
• Do you understand what is required to construct and propel the company toward success?
• This will come into play when dealing with investors, private equity funds, regulators, and internal teams.

Strong personal brand

• In today’s fast-paced world, it is crucial for you to actively engage with CXOs and build a strong network.

Curiosity

• Are you keeping tabs on what the competition is doing, what the market is doing, and where it is heading?
• In today’s data-driven world, if you are not curious enough, you will be left behind.

What’s the solution for this sudden surge? Enter Virtual CFOs

As companies grow, the demand for a full-time CFO becomes unavoidable. Yes, we get it. But what about smaller companies/startups that cannot hire a full-time CFO in the early stages?

That’s what Virtual CFOs are for.

Virtual CFOs are increasingly gaining traction as they provide strategic financial oversight without the full-time commitment.

Cost-effective solution: Virtual CFOs allow startups to access strategic financial leadership at a fraction of the cost.

Scalability: They help businesses scale intelligently, handling tasks like cash flow and payroll.

Source: ET CFO (Economic Times).