Chairman of the bored?

Iggy Pop: punk progenitor, psycho-pop legend, David Bowie’s mate, 6 Music DJ – what’s not to like? A lyrical highlight? "I'm bored....I'm the chairman of the bored...." he sang in 1979. And it feels pretty relevant when I look across the finance recruitment landscape in 2023.

It’s true of the economy. It feels static at the moment, like the UK is waiting for something to happen. (Overseas, tragic events have been unfolding; that’s also encouraging lots of business decisions to go on hold.) The big news? Things not happening. HS2 anyone?

The M&A market is also pretty bored. The US, says Reuters citing Dealogic, managed $356bn of deals during Q3, a 35% hike over Q3 2022. Wow. But deal volumes in Europe fell 31%. Like the economy more generally, bad news has been a cue to slow down, take a beat, rethink.

And I’m having a lot of conversations with finance execs who just aren’t feeling it. An economy in motion (up or down) and active deal-doing means two things. First, it causes change – stimulating, intense, and vital jobs for the finance function. Second, positions open up – creating potential for a new challenge.

But too many of you feel… well, bored. Your stress is more likely to come from keeping a lid on rates, inflation and refinancing, not dynamic management.

There are two sources of optimism. First, boredom is a great motivator. When you’re feeling emotionally, professionally, and financially a bit dislocated from your existing role, it drives you to be part of something more exciting. (If that describes you, I’d love to chat. Recruitment is all about staying in touch so we can pounce when the right position for you opens up – or when you need to hire in someone new.)

Second, in the economy, in M&A, in business – boredom can end very suddenly. Whether it’s a potential slew of carve-outs, banks pressuring indebted corporates, an election or a sudden swing in the markets, there’s plenty that can unclog the tedium. And the right finance team is never more important than when things are tough, or in flux.

- Ray Nicholls

Things to do…

**Now**

`Identify vacancies. The UK labour market is softening: lots of businesses are holding off on hires; candidate availability is high. But that means filling skills gaps at reasonable salaries is getting easier. IT wages, for example, have cooled as US multinationals paused hiring (£FT) – so there’s no time to waste.`

**Next**

Debt structure is still a thing – and looks like it will be well into 2024. The IMF’s analysis (£FT) of the UK economy predicts rates might yet rise again (as high as 6%; and stay around 5% until 2028!). Extra motivation to ensure borrowing costs are just right comes from John Authers (£Bloomberg) who warns there might be a new credit crunch brewing.

**Later**

Who’s responsible for security in your organisation? Like most things without a ‘function’ it’s probably finance. Time to schedule in a review of physical, digital and geopolitical security? Digital, in particular, is worth a look, with AI upgrading cybercriminal arsenals. Conducting a threat assessment (or, better still, helping deal with a cyber breach) looks good on the CV, too…

Lies, Damned Lies and…..

That’s the amount of rainy-day cash currently in the coffers of legendary investor Warren Buffett. During August, his firm Berkshire Hathaway sold £8bn-worth of shares, rounding out up three quarters of net disposals in equities. OK, so its market cap is still $790bn – but while people often write off Big Short legend Michael Burry’s negative plays (he’s also made some big bets against equities recently), the 93-year-old sage of Omaha is generally seen as a more reliable forecaster. So… how well set up are we all for a big dip in stock markets?

Sinning: £11,932 (down)

The GAAPWeb finance and accountancy salary survey is out and… it doesn’t make for great reading. CFO/FD roles have seen average salary drop by 11% from £123,008 in 2022 to £111,076 this year, with FP&A manager (-13%) and head of finance (-5%) positions also taking a hit. (And that’s before inflation in double figures, remember.) True, 60% of respondents did get a salary bump, but overall the value of posts is falling.

Other stats of note? 50% of respondents spent just one or two days a week in the office (9% are fully remote!); bonuses are spreading beyond the top roles; and there’s still a big gender pay gap in the profession. Definitely worth a read whether you’re hiring, rebalancing your team or looking to your next role.

Crystal ball: 'New' New Labour

After a relatively lacklustre conference season for the Conservatives, and a confident showing by Labour, it’s starting to look like Keir and Rachel are going to shape your business’s future, not Rishi and Jeremy. Commentators debate whether the election will be in May or October 2024, but it’s coming.

How might that affect business decision-making? The likelihood of Labour winning is so strong there’s plenty of analysis to work with. Infrastructure (and building more generally) looks set to benefit from a new approach to planning and investment (£FT). That’s coming partly through renewed devolution (so get chummy with your council…). Tackling late payment might win some smaller biz votes (not that it hasn’t been tried before…). And the tone of New New Labour does seem to be reminiscent of Old New Labour in winning corporate backers.

Questions? The UK is broke, so finding the money to fund all the goodies might be tough. If you have kids in private school, the end of the VAT exemption might pinch. But the party seems serious about industrial strategy, so boning up before they take power seems smart. Don’t expect too many specifics before the campaign – but trends should be actionable now.

Too long; didn't read: Beer!

Management guru Stafford Beer (1926-2002) isn’t a household name, but as a pioneer of organisational theory and cybernetics (the science of control and communications) he has a loyal band of acolytes promoting his thinking. You might recognise his most famous saying – “the purpose of a system is what it does” – from your analysis of spending departments in the annual budget round.

Beer helped design a space-age decision-support system (complete with a ‘board room’ nerve centre, pictured) for the Allende government in Chile – which was overthrown 50 years ago last month. So take a minute to read analyst Dan Davies’s wistful blog about Beer’s take on internal comms. His view on the clarity and actionability of information – and how it dictates organisational structure – is especially interesting if you’re backed by a PE firm with an unslakable thirst for data.

Just don’t be too bitter about Beer's take on using computers for accounting: “like hiring Einstein or Da Vinci, then getting them memorise the phone book so executives can look up numbers more quickly.”

For a more detailed Beer retrospective – with more politics – try Kevin Munger.