What a dismal month. I’m writing this a few days before Rachel Reeves delivers the first Budget of the new Labour government, and the steady drip of negative stories about the economy and politics in general is souring the mood. (The weather hasn’t helped.)

Tax rises and spending cuts are inevitable, and in many ways things feel worse now than they did when George Osborne delivered his austerity Budget in 2010. Now we’re contending with geopolitical traumas, the rise of disruptive AI, and an economy that’s still recovering from Covid and Brexit.

Out in the market, I’m hearing lots of people hitting the pause button on all sorts of issues, “waiting for the Budget” (in some cases, of course, they're "waiting for the US election".) But I’m not so sure that’s the real reason.

People often want an excuse not to make a decision. Every time we make a choice in business we’re taking a risk. What if this marketing campaign doesn’t work? What if the new product design has flaws? What if the more commercial FD we hire doesn’t work out with the other board members?

But not making a commitment or choice is a risk in itself; “not deciding” is a decision. And when you make choices, things change. Selecting a candidate to come into a senior finance role in your business means fresh eyes, a new sounding-board, a different set of priors to develop your own thinking and processes. Even if they don’t work out, you’re testing, and progressing.

As a boutique consultancy, it's easier for me to make decisions. Unlike the big recruitment shops, we’re not hampered by bureaucracy. Great candidates are more visible than ever – which means we can seek out ones that fit roles without the hefty back office. And I can experiment with new ways to fuel creativity.

A great example is our recent sign-up to Gathr To Find – a network that offers services to investors, deal-makers and entrepreneurs. It gives us a chance to showcase our services, and we love being part of a community, sharing ideas.

It means we’re in a stronger position to react quickly when the decisions do have to be made. Whatever Chancellor Reeves decides, things will change, and companies will respond. Having great financial management in place to reflect, react and support growth will be more important than ever.
- Ray Nicholls

Things to do...

***Now...***
**Tighten collections:**
Begbies Traynor data show more UK firms are now in ‘significant’ financial distress this year, which makes staying on top of aged debtors even more important. Recovery hopes are still high for 2025, so don’t panic.

***Next...***
**Leave the country.**
Only joking, but a survey of business owners say 48% would do so if the Budget is adverse. It’s nonsense, of course, but with the evolution of BEPS and more remote working, domicile is an issue to keep an eye on.

***Later...***
**Plan for the ERA.**
The Employment Rights Bill will be an Act next year, kicking in properly in 2026, so we have lots of time to square away policies on harassment, equal pay and more. Plenty of analysis online…

Lies, damned lies, and...

The 8% club

Being a ‘boutique’ recruitment firm has loads of benefits (for our clients and candidates), but we’re happy to acknowledge the big shops have some things going for them. Take the detailed research produced by Russell Reynolds recently into CFO turnover. Across Europe’s mid- and large-cap businesses, 8% of CFO jobs changed hands in the first half of the year, a record.

The only thing is… it's not really that much of a record. In fact, it’s pretty much in line with the past four years, the exception being H1 2020 – when something must have happened to slow down turnover in the top finance jobs? Have to have a think about reasons for that one…

Perhaps more interesting is the proportion of internal candidates taking on role, which seems to be down a bit. Again, the swings aren’t that pronounced, but external ‘first-time’ CFO hires are creeping up again. The exception is women into CFO posts, where talent pipelines seem to be paying off as 56% of women appointed were internal candidates.

Our take? When conditions (the economy remains unpredictable) and ownership (private equity being the X-factor) are in flux, it’s often a sign for seasoned finance chiefs to call it a day – and the board to seek new blood with more creativity and flex. (And that, of course, is where the boutiques like us can really help.) Meanwhile we’ve been hearing that after a period in the doldrums, UK IPOs could come alive soon, which will further alter the briefs coming through for finance talent.

PS: another piece of research, albeit from the US, suggests lower down the finance function a talent shortage remains acute (with 83% of CFOs reporting a dearth of accounting talent). The solution many CFOs are turning to? Outsourcing. Hiring intentions are robust, but empty seats drive up workload for the team. We know how critical that can be in the senior roles: we’ve been serving the interim market for a while, and you should drop us a line if you have critical roles that are vacant.

And surveys suggest the trend is big in the UK, too:

On trend

What's in a name?

About 20 years ago there was an article in Real Finance magazine about whether finance directors should consider changing their job title to “chief operating officer” (COO). Then it was a relatively new title – in the UK at least – and it seemed to serve both finance leaders who wanted to break out of the numbers; and marketing folk who wanted to seem, well, less showbiz and more serious ahead of a tilt at CEO jobs.

The trend for having a COO goes in waves (McKinsey says it’s back up again after waning from a high of 48% of the Fortune 500 in 2000), and it seem to be having a moment again.

For finance folks, COO can be an interesting stepping-stone to a CEO role, with more explicit operational responsibilities. But a word of warning: with the right CFO, FD or even head of finance role, you should be able to get plenty of exposure to life beyond the figures.

Not every board welcomes it: some chairs and CEOs are still threatened by finance leaders who look behind the numbers. But these days, appreciating and influencing the drivers affecting every kind of performance metric is at the heart of a well-crafted finance job spec. That’s why we love to help clients shape a really solid brief; and candidates to find a home for their broadest talents – whether you have an eye on the CEO job or not.

Words from the wise

AI: too important to hype

The list of foolish things AI has done is a long one. The problem with the current generation of systems isn’t that they are rubbish – they’re very convincing at producing intelligent words and pictures. The problem is that behind that veneer lies, literally, guesswork. (LLMs, even in their most modern guises, are probabilistic text generators relying on other people's work.) Hence the stream of “lol isn’t this stupid” examples of AI howlers.

Let’s be clear: this is going to be a transformative technology, and in a few limited cases already is. But for finance teams charged with accuracy, probity and transparency – not to mention validated analysis to support key decisions – it’s got a long way to go. So anything that helps fight off the pressure to roll something out is useful.

Enter Amy Castor and David Gerard. Their main beat was crypto, and while they’re still very much on the hunt for DeFi scammers and Bitcoin snake oil, the persistently high value of BTC has somewhat thwarted their analysis of a “soon-to-collapse” bubble. So they – self-confessedly – aped their targets in the hype market and shifted their gaze to AI. That makes their new blog, Pivot to AI, a worthy read.

Passé meme of the month

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