Section 2: Tips for Hiring a Controller for a Small Business (continued)
Greetings, and welcome to the final chapter of Tips for Hiring a Controller for a Small Business. In Part II of the previous section, I discussed various factors to consider when hiring, based on different Finance leadership structures within a company. Today, I will drill down into the crucial areas you must consider when hiring a Controller: Technical Skills, Soft Skills, Culture fit, and a few additional considerations that can’t be overlooked. Then, I’ll list several tips to make your hiring process timely, efficient, thorough, and successful!
Technical Skill Set
When evaluating the technical needs of the Controller you are hiring for, make sure to answer the following questions in order to accurately identify the necessary skill set for the position:
- Industry experience – do you need someone with experience in your company’s particular industry or niche?
- Accounting systems/ERP – what system does your company use? Is the system complex enough that you need a Controller who has previously utilized that system? Do you have an ERP upgrade or implementation on the horizon?
- What are the most challenging focus areas of your business that need to be accounted for? Revenue, Billing, Expense control, Payroll, Job Costing, Internal Controls, Inventory, Regulatory or Debt Compliance, Reporting to Investors?
- Are there any Technical Accounting issues (Revenue, Purchase accounting, Stock compensation, etc.) that this Controller will need to be proficient dealing with?
- CPA or no CPA? Should your new Controller be a licensed CPA? Why or why not?
- Size and structure of company: Do you have multiple locations or entities? Any International operations? How many owners? Is there private equity or a VC backer?
- Size of Accounting team: How many staff will this person manage? If the team is large, make sure you are targeting candidates who have extensive, proven managerial skills.
- Should your Controller be hands-on, in the details, or more of a manager/delegator?
- What shape is your Accounting function in currently? Do you need a “fixer”, an improver of processes, or are the books in good shape for the new person coming in. A fixer is a unique individual – many candidates will say they are capable of being a fixer, but few actually are.
Soft Skills and Culture Fit
Many people say that these two areas are most important when hiring. I agree to a certain extent; however, for a critical position such as Controller, technical skills must be taken seriously. Nevertheless, a candidate’s soft skills and culture fit within the company are usually what wins them the job.
- Communication and Interpersonal skills: Remember that your Controller is the face and voice of the Accounting department, both inside the company and externally facing.
- Question: Do you need this person heavily involved in your business operations, meeting with different departments on a regular basis, digging into details of day-to-day operations? If so, look at candidates’ past experiences in that capacity to gauge their capabilities.
- Leadership Style: should fit the needs of the team. There are many types of leaders: manager, mentor, teacher, hand-holder, strict, fear-inducing, demanding, encourager, motivator… the list goes on and on. What does your company need?
- Experience Level: Should you target an “up-and-comer” with room to develop and grow with the business over time, or do you need a seasoned veteran who has “been there and done that?”
- Also, be sure to consider your company’s work environment, the intensity level, and hours required. Candidates should be made aware of this during the interview process.
Additional Considerations: Keep these factors in mind as you are hiring
- Location, location, location: How far away from the primary office do the candidates live?
- What are the real reasons each candidate is looking for a new job? Can they legitimately share their reasons for being interested in and excited about your company’s job?
- Salary requirements, current compensation, desired compensation? Are these in line with your company’s structure?
- Beware of hiring an overqualified candidate. Do they really want this job, or do they want any job that will pay them? Will they feel they are above some of the day-to-day work required?
- Pay close attention to the previous tenure listed on a candidate’s resume, and prepare to ask about reasons for job changes.
- Reference checks – what do their professional references say? See more discussion on this point below.
Finally, let’s get down to the actual hiring process. Here is a list of recommendations that will help you create a blueprint for hiring success:
- Timing: As soon as you know you need to hire, start the process. The day will come when your current Controller is no longer there, and that day will creep up on you fast! The longer you wait, the more rushed the hiring process will seem, and this could damage the quality of your hiring process, create a backlog of work to be done, and present unnecessary challenges for the new Controller
- Notice: If your outgoing Controller gives you a two week notice, ask for three. If they give you three weeks’ notice, ask for four!
- Knowledge Transfer: Ask your outgoing Controller if they will make themselves available for knowledge transfer, even after their last day on the job, and create a compensation structure that will incentivize them to do so.
- More knowledge transfer: Consider hiring a Contract Controller or a Consultant who can take over the majority of the Controller functions and act as a knowledge transfer base between the outgoing person and the new hire.
- Where to look: Exhaust many resources during the search process. The companies who consistently hire the best talent in the market utilize a combination of internal job postings, employee referral programs, and external recruiting firms in order to identify a deep, high-quality pool of talent.
- Interviews: Make your interview process thorough but efficient. Initial phone interviews are fine, but too many phone interviews for the same candidate seem burdensome, and tend to become repetitive while draining the excitement from the candidate. Invite them to meet you in person sooner rather than later!
- More Interviews: Make it clear to your company’s key decision makers that they need to be available, in the office, in order to interview the top candidates. Update your management team about the interview schedules as soon as they are confirmed, and send calendar invites.
- Team Input: Allow the key members of the Accounting staff to meet with the top Controller candidates. Most likely, they will not have the final say in who is hired, but it’s important to give them an opportunity to be involved in the process. Many times, you will receive thoughtful feedback from the staff members which wasn’t apparent during interviews by the management team.
- Communication: Keep the communication between your company and the candidates timely, consistent, and as transparent as possible. If a candidate feels like their time and efforts are not being respected, this could cause them to think less of your company as a future employer. Remember, the best candidates will usually have multiple options to consider!
- References: Perform thorough reference checks on your top candidates under consideration. These references should be fairly current (from within the last 5-6 years of employment at most).
- Lack of References?: If a Controller candidate does not have a list of at least four references willing to speak on their behalf, or they are unwilling to provide their reference list, you should consider this a major red flag.
- Supervisory References: At least one (preferably two) references should be previous supervisors. Either a CFO/VP Finance who the candidate reported to from a Controller role, or a Controller who managed the candidate while they were in a lower-level position. If the candidate has references from a public accounting firm, make sure that the reference was directly involved on the same client engagements as your candidate.
- Strong Offer: When you are ready to make an offer to the chosen candidate, do not make a “lowball” offer. I repeat, DO.NOT.MAKE.A.LOWBALL.OFFER. If you expect the candidate to negotiate starting salary, or other component of the comp package, it’s okay to start at a lower figure than the high-point you can ultimately reach. However, starting a negotiation with a surprisingly low number, which in many cases is perceived as an insult to the candidate, only will deflate, confuse, and anger the candidate while significantly lowering your chances of successfully hiring them. Make your initial offer one that is respectable and logically justifiable, rather than using it as a negotiating tactic.
I hope this article is useful to any small business owner or executive in the process of hiring a Controller. Feel free to reach out to firstname.lastname@example.org with questions or feedback. Thanks for reading!
Authored by Spencer Epley