At a time when burnout is prevalent across the finance industry, many CFOs are turning to portfolio careers that provide greater flexibility.
Greg Eaton, managing director of accountancy outsourcing company Isosceles, has seen a rise in the number of CFOs switching to interim or fractional work over the past 12 months. “The job of a full-time CFO can be taxing and some are looking for friendlier work schedules,” says Eaton. “Others are drawn to the idea of working for multiple companies and contributing to more engaging projects where they can grow their skills.”
This comes amid increasing awareness and acceptance of fractional professionals across the board. Consultancy platform Catalant’s 2024 Mid-Year Trends Report reveals a 50% growth in fractional and interim roles between 2022 and 2023. Finance accounts for just over 30% of these appointment, according to the report.
“There’s a huge demand for fractional finance skills right now,” Eaton observes. “Firms with limited resources are looking for financial leadership in uncertain markets.” At the same time, rising CFO turnover and a shortage of accounting skills means that contracting outsiders has become an increasingly attractive option for companies.
Those thinking of making the move will need to understand what the job of fractional CFO really entails and which new skills they may have to acquire.
Why become a fractional CFO?
Patrick Murray has been a fractional CFO for the last 15 years, working across the technology, fintech and life sciences sectors. After working as a full-time finance chief for a number of scaleups, he decided he wanted something different.
“While I enjoyed the challenges of the role, I found that my skills were leveraged across a number of departments where I did not add significant value, such as HR, IT and facilities,” he says.
For other CFOs, moving to a portfolio career is about maximising exposure to new opportunities. Fractional CFOs have the opportunity to manage multiple projects simultaneously, says Claire Trachet, a fractional CFO for tech startups. “Sometimes it is an avenue to finance the launch of their own venture in another field,” she adds.
Others seek fractional positions to suit personal circumstances – for example, perhaps they’re returning from maternity leave.
Andrew Jones was a full-time CFO for six years before taking a fractional role. “We had a daughter, who was four at the time and she was just about to start school,” Jones says. “I wanted to be able to attend as many of her school events as possible and the flexibility of working as a fractional CFO was perfect for this.”
What specific skills do fractional roles require?
CFOs are used to managing their time wisely, but for fractional leaders, this is especially critical. Being on-site for just one day a week means there is additional pressure to deliver specific results within limited time frames.
“You can’t do everything, so you have to clearly define your scope and manage the internal team or external partners to carry out other tasks,” Trachet explains. “I often design and build financial analysis models and then hand over the ongoing management of these to the internal team or another provider.”
Skill-wise, Trachet says a fractional CFO often needs to bring “more to the table”. “You’re not learning on the job and you don’t have the luxury of time to grow into the role,” she says. “You have to be even more proactive, anticipate potential issues from a position of experience and follow the fast pace of growth of the company.”
Using a ‘sell style’ rather than a ‘tell style’ is a must when making changes
Being a fractional finance chief also requires additional people management skills. As the involvement in the business is on a part-time basis, it’s essential to build strong relationships with key stakeholders, especially the C-suite and the finance team, so that the work continues in your absence.
“Typically you need to have difficult conversations about resourcing in finance early on in the assignment,” says Murray. “Using a ‘sell style’ rather than a ‘tell style’ is a must when making changes.”
However, many of the responsibilities remain the same as they would for a typical CFO. “A chart of accounts is still a chart of accounts,” notes Jones. “CFOs are the go-to person for the CEO or managing director as a sounding board and are heavily involved in strategic business planning. They are also the key people for funding discussions and are crucial in M&A activity. None of this has changed.”
What additional challenges do fractional CFOs face?
A major challenge lies in only being physically present part of the time. Fractional CFOs don’t have the constant day-to-day interaction that’s typical of a full-time CFO. “You’re not always in the corridors, having casual catch-ups with the CEO or other executives, so you have to manage expectations and priorities accordingly,” Trachet explains.
Another challenge is the fast pace at the beginning of a new contract. Fractional CFOs must quickly immerse themselves in the company, making an impact within days or weeks – much faster than a full-time CFO would usually be expected to. If they are not seen to be delivering business value, they can can quickly be perceived as little more than a cost to the company and let go. That pressure can be difficult to deal with.
“In a practical sense, you’re only as good as your last day of work for a client,” Murray says. “Get used to being evaluated the whole time and constantly striving to deliver value. What constitutes an amazing outcome at the beginning of a client journey may not be taken as ‘a given’ later on in the relationship.”
The downside is having to buy five Secret Santa gifts for five different companies
Balancing multiple clients can also be mentally demanding. A fractional CFO is often dealing with similar themes – growth, metrics, strategy – across different companies. “It requires a sharp memory and the ability to stay focused and well-rested to be fully present for each client,” Trachet says.
Especially challenging is when two or more clients suffer a crisis at the same time. “In my experience, clients are very understanding provided you are straight with them around overlapping time commitments,” Murray says.
There are smaller, logistical challenges to consider as well, such as having the right laptop and the right notebook when meeting clients.
Many fractional CFOs also report feeling worried about not being part of the team, though depending on the culture of the organisation, this may not be a problem.
“Luckily, all my clients have made me feel part of their business,” Jones says. “Sometimes it’s the little things that mean a lot – being invited into the office fantasy football league or being included in the Christmas secret Santa. I guess the downside is having to buy five secret Santa gifts for five different companies.”
What is the best part of the job?
For many, the variety of the role keeps it exciting. A portfolio career offers an opportunity to work across multiple industries and geographies, bringing the best practices from one client to another, constantly learning and applying new strategies.
Jones says the fact that every day is different is one of the main draws: “This week I had one client who asked me to relocate the international group’s head office from the UK to Dubai and the next day another client asked me to help with posting a payroll journal. I get to work across a wide selection of sectors, spend time with amazing business owners and work alongside fantastic finance teams.”
Others enjoy the positive impact they are able to have on the business – whether that’s unlocking growth potential, securing financing or helping the company save money without resorting to layoffs.
“Our experience allows us to guide businesses toward smarter decisions, which often results in significant savings and long-term success,” Trachet stresses. “The sustainable impact, providing longevity once the fractional term is done, is very important.”
