The activities that accompany robust economic growth — such as mergers and acquisitions and initial public offerings — increase the demand for finance professionals, even as the available talent pool shrinks. This certainly is true in the software space, where a high percentage of venture capital-backed companies translates to a steady stream of M&As and IPOs.
With the need for industry-specific skills and experience in critical areas such as revenue recognition, there’s fierce competition for the best talent.
Aston Carter’s Manager of Accounting and Finance Recruitment Lenny Bourdeau, with more than 18 years of experience in placing hires in the high-demand Boston area, shares some insights.
Fishing in a Small Talent Pool
The finance work that software companies need to cover is not much different from other industries — traditional accounting, technical accounting, revenue recognition, tax and audit.
So, what makes software hiring challenging?
“They're very picky about what they want, and very picky about the people they'll consider for hires,” says Bourdeau. “Do they want someone from a publicly traded company? A $100 million company, or a $1 billion company? With such a low unemployment rate, you're fishing from a small pool to get candidates that are right for each job.”
The Boston area’s high concentration of software and venture-capital backed companies contributes to the “been there, done that” hiring mentality. Bourdeau observes that clients have a strong preference for candidates from the same industry who can hit the ground running. As he describes it, “‘Hey, are you from this industry or not?’ If you're not, we're probably not going to hire you.”
Companies also look for specific enterprise resource planning (ERP) experience.
“Having NetSuite ERP experience is that something that a lot of firms are looking for,” says Bourdeau. “It happens to be a program that works well with growing venture-backed software companies.”
That’s not to say there’s no role transferability across industries. The life sciences, with its focus on research and development and with similar revenue recognition challenges, is one area where skills and experience can transfer.
But all else being equal, industry experience weighs heavily throughout the process — from initial screening to final job offer.
Revenue Recognition: It’s All in the Timing
Bourdeau notes that the nature of the software business makes revenue recognition more complicated, driving the need for candidates with industry experience.
“There might be a $2 million deal with a software company, and a certain amount is paid up front, but the rest of it is going to be paid in installments over a 24-month period,” says Bourdeau. “Just because you signed that deal on March 1 doesn't mean all that revenue is going to hit the books at that time, because you may be recognizing revenue before it's in your pockets.”
Bourdeau contrasts that with a straightforward sales transaction: “You can say, ‘Oh, it went out the door, and they paid us the money.’ In those cases, it's much easier to account for when it's supposed to hit the books.”
The Opportunity Costs of Recruitment
Selectivity comes with a cost. Let’s say a hiring manager spends 10 hours a week interviewing candidates over the course of a few months. That time has to come from somewhere, and can often impact work/life balance.
Bourdeau points out that software finance and accounting managers have designated responsibilities that can’t be reassigned during the hiring process. There’s not the luxury, or staffing bandwidth, to focus solely on management.
“When you add recruiting on top of a finance manager’s day-to-day responsibilities, where's that time going to come from?” Bourdeau asks. “Probably from the individual’s private time.”
Working with a recruiter who maintains an active database of qualified candidates can ease that burden.
Expanding the Candidate Pool
Bourdeau’s team maintains an active database of available talent, using direct calls, emails and LinkedIn messaging to stay current. Potential candidates are categorized by industry, skillset, level, geographic preference and level of interest.
“We use more of a business development approach, versus the standard process of posting a job and getting applications,” says Bourdeau. “We're constantly reaching out and identifying candidates who are open to new opportunities. As job requests come in, we have a pool of available talent in place to begin the screening process.”
Remember That Soft Skills Matter
With all the focus on specific skills and experience, it’s easy to overlook the importance of soft skills in finance and accounting. Bourdeau cautions that would be a mistake.
“When it comes to certain positions, especially a director of finance or senior financial analyst, that person is going to be supporting sales and marketing,” says Bourdeau. “You're definitely going to need someone who can communicate appropriately.”
Strong communication skills are especially important in the software industry because of the regular interaction among the sales, legal, and marketing teams. And diplomacy helps, too, especially when the sales team tries to shape a contract to meet what the customer wants, but revenue recognition issues require a different approach.
Bourdeau shares the diplomatic response: “Hey, I'm not trying to lose business. I'm trying to make sure we’re not putting the company at risk."
If your company can benefit from a free conversation about hiring finance and accounting professionals with software industry experience, contact Aston Carter now.
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