Playing Matchmaker for Mid-Market Firms and CFOs
Paro's Jon Repka explores the shifting market conditions demanding more sophisticated ways to hire finance talent
Middle-market businesses and their private equity sponsors are facing a plethora of headwinds when it comes to finding the right finance professionals to drive their next stage of growth.
Amid a labor shortage, mid-market companies have more complex considerations when it comes to managing financials as they expand, ranging from compliance to procurement to cybersecurity. Plus, the finance professionals themselves are demanding greater flexibility and compensation for their specialized skills.
Jon Repka, VP of Growth at Paro, recently spoke with GrowthTV about how B2B service providers can help middle-market companies find the right financial talent fit. Read the Q&A of the conversation below.
Carolyn Vallejo: I’m here today with Jon Repka, VP of growth at Paro, and he’s here today to talk to us about the middle market’s finance talent needs, which are quickly evolving. I would love to start the discussion by first talking about how those needs have evolved over the last five years or so.
Jon Repka: I have to say the pace of change in the finance function, particularly at the CFO suite, has been both expansive and rapid. From a functional standpoint, one of the reports that I constantly have on my calendar, McKinsey issues an Office of the CFO update every two years, which I highly encourage everyone to take a look at. And one of the headline insights is that functionally, the world’s expanding. An average of six different functions ranging from of course finance, but also procurement, digitization, M&A, cybersecurity, now roll up to the CFO. Compare that to an average of three a couple years ago, and only two five years ago.
And so there’s just so much more than being put on the plate of these professionals. And when you couple that with digital transformation—which I know is a buzzword—but any middle-market CFO earned their keep by creating enterprise value, that’s on your plate as well. And so with big data creating a whole lot of insights, and also a whole lot of noise with the wave of staff platforms creating new capabilities and new ways to collaborate, but also new RFPs to run, new systems to make sure they’re integrated and accurate. It’s just created a whole lot of work.
And I’d say the last definitive change that we’ve seen is also an emphasis on soft skills. So it’s not just about the hard data, the security, digital transformation, but also CFOs financial leaders are taking more of an active role in truly driving corporate strategy and leading cross-functionally. So you have a lead together, it’s a lot,
CV: Right, so if middle-market businesses are able to actually find the talent that we’re looking for, it sounds like they can derive a lot of value from that talent. But to make things even more difficult, the needs of financial finance professionals themselves are also changing. So what kind of recourse do business operators have? How can B2B service providers help fill market needs?
There’s one term that I take a whole lot of offense to that has been thrown around in the last couple years, and that’s this “Great Resignation.” It just doesn’t jive with what we see in the market.
JR: You know, there’s one term that I take a whole lot of offense to that has been thrown around in the last couple years, and that’s this “Great Resignation.” It just doesn’t jive with what we see in the market.
It has been a Great Migration, and these professionals that you rightfully mentioned, if you can find them, a lot of value, have more opportunities than ever, and they’re getting more demand. I think a lot of what we used to associate with a “tech employee” wanting control, and choice, and to follow their passions, to benefit their community, to have work-life balance—this is now pervading the legacy finance and accounting world, and they’re demanding the same things, and they have more options than ever.
And so the onus of providing solutions to middle-market businesses is falling more on B2B providers than ever. When you have low switching costs, a whole lot of demand that exceeds supply, you have to be able to cater to that. And what these providers can do is really be that bridge in the marketplace to make sure that the right talent is finding the right home.
Actually, where I find this most acute, and it’s interesting that you started off the conversation about the CFO and the finance leader as a very specific role, and that is the right-hand woman, the right-hand man to the CFO: the head of accounting, the controller that, with so much that’s been put on their plate, they need an off-shoot, they need someone else to take on that bandwidth, and that role is becoming almost impossible to fulfill without the right solution provider.
CV: Right. I definitely want to talk about that matchmaking process, which historically has been very analog. But today, as you just mentioned, the middle-market’s needs are growing and evolving, the finance professionals’ needs themselves are also evolving. It’s a complex process to match a middle-market business with the right CFO, for example. So can you talk about how the tools that actually facilitate that matchmaking process need a little bit of rethinking?
A really exciting new world opens up of fractional, of flexible, of interim, of project-based talent, that is really the missing link in allowing the finance team in the middle-market of today to accomplish everything they want to accomplish.
JR: Absolutely. I’d say a complete rethinking, where when you lay all of what you just mentioned in terms of complexity with what we understand are both seasonal and event-driven decent peaks in demand. We know there’s going to be tax and audit busy seasons, month- and year-end closed. There are also events like selecting a new ERP system, or M&A activities that cause a spike in what you need on your finance function. And the legacy way of doing things, as you mentioned, analog or manually, just can no longer keep up.
What we’ve been building for the last seven years at Paro is a proprietary tech stack that allows us to do two very core things that we’ve found are tantamount to success in this new normal. One: vetting. And you have to have that intake process to understand hard skills, soft skill, compliance risk from background checks and whatnot, all create consistent aggregate set of data. Who are these people? What are they good at? And not just what have they been doing, but what do they want to do? To your second question. And then to pair that with matching technology to understand where is a specific individual going to add the most value and the most aligned with their career goals.
When we can pull that off, a really exciting new world opens up of fractional, of flexible, of interim, of project-based talent, that is really the missing link in allowing the finance team in the middle-market of today to accomplish everything they want to accomplish, with budgets that are always going to be constricted.
CV: So taking a digital-first approach to that matching process.
JR: Digital-native, digital-first, digital all the way through, which really reflects this remote world that most of us find ourselves in 2022.
Watch the full GrowthTV episode below: