Economic and Employment Outlook for 2018 (i.e. How Long is the Commute?)—and Impact on CFO Demand
It’s not just the CFO market that is RED HOT in Silicon Valley, it’s the entire economy. According to the California State Employment Development Department, as of March 7, 2018 the overall unemployment rate in Santa Clara and San Benito counties is currently at 2.9%. That’s the overall rate. For degreed professionals it is under 1%. That means more jobs, including CFO jobs, are out there.
For those of you commuting anywhere in the Bay Area, you instinctively know this. A look at the unemployment rate from 2010 to 2018 is telling — it’s a straight down and to the right line:
What’s Driving All This?
The economy in Silicon Valley is firing on all cylinders. It’s a very different expansion from what we saw with the dot-com bubble in the late 90s. For starters, the push is extremely wide in terms of the industries within tech: AI, Autonomous Vehicles (can you guys hurry up with this, we need them now!), SaaS, Consumer, even Semiconductor is seeing some revival due to the AI boom. On the Life Science side of things, CFO jobs are opening as both Biopharma AND Medical Device companies are getting funded and doing very well. This expansion is about revenue generation —- real dollars (not just ICOs, which is a whole other topic).
From everything I’m reading there’s still a lot more fuel to throw on these flames. Where we’ll house and transport additional workers is a real problem, but the epicenter of tech is still here and not disappearing anytime soon.
IPOs Drive CFO Demand
There are a number of high profile IPOs that really will happen in 2018 and 2019. DropBox, Zscaler, AirBnB, and Uber have all announced. IPOs directly affect the CFO market in that when high flyers go out into the public markets with success, others will follow. We saw this happen in 2012 in the Biotech market with dozens of IPOs, some of which probably should not have gone out. Most companies will not go public without a CFO, and those that do soon realize they need one.
What does this mean specifically for the CFO market in 2018? It means competition for employers. It means candidates for CFO jobs can be picky. It means there are very few people on the sidelines. It means if you are seeking to hire a CFO it will be hard work and you will need to dig deep into your contacts and or work with an executive recruiter who can really help.
Changing Demographics Impact CFO Availability
There’s an additional factor facing the CFO market this year and the coming years as well — the Baby Boomers are retiring. This is noticeable at the CFO level and will force companies to look at planned succession and look at candidates who haven’t previously been in the CFO seat. Our clients have been more receptive to looking at “step-up” candidates than ever before, and I think this is at least part of the reason.
So enjoy the ride as slow as the traffic may be, it’s going to last a while. And take stock that full employment is a lot better than the alternative. Remember 2003?
When the CFO market is this tight, you need a search partner with proven success in this type of environment. Contact me at moc.srentrapdlonra@evad to discuss your objectives and we’ll work together to land your ideal candidate.– Dave
Dave’s got a lot to say on variety of topics relating to CFO jobs and the industry. Be sure to read his previous post: Have You Ever Been Presented with a Counter Offer?