Your Finance Director Just Resigned

The instinct is to solve it immediately, either by persuading them to stay or by starting a search that afternoon. Both are premature. The first three days are for protecting what you already have: the close, the cash position, the banking and audit relationships, and the confidence of the rest of the team. The hiring decision is better made in week two with a clear head.

The first 72 hours

Accept it properly. Whatever you decide about a counter-offer, react calmly and thank them. How the resignation is received determines how much you get out of the notice period, and the notice period is where the value is.

Protect the reporting cycle. Find out what is mid-flight: the close, a year-end, an audit, a covenant test, a payroll change, a systems migration. Anything with a hard external date moves to the top of the handover list.

Secure the relationships. Auditors, bank, lenders, key suppliers, HMRC correspondence, insurers. Get yourself or another named person introduced into those threads this week, not in their final fortnight.

Control the message. Tell the finance team yourself, early, and say what happens next even if the answer is that you are working it out. A silence gets filled, and the people you least want to lose fill it first.

Before you counter-offer

A counter-offer is worth considering, but only once you know what you are solving. Ask what would have had to be different for them to stay, and listen to the whole answer. If it is money alone, a counter-offer can work, although you should expect to hold that new number for everyone at the same level. If it is scope, authority, the reporting line, or their view of where the business is going, money does not touch any of it, and the same conversation will happen again in six months from a worse position.

The other thing a counter-offer costs is optionality. Once you have made one and it has been declined, you have told them what you think they are worth and lost some of the goodwill that makes a long handover work. If you are going to make one, make it quickly and once.

What their leaving is telling you

A resignation is information, and it is worth an hour of thought before it becomes a job specification. Most senior finance departures fall into one of four categories, and each points somewhere different.

They outgrew it. The business is smaller than their next step, common after four years or more in post. Replace like for like, and be honest in the brief that this is a seat someone grows into rather than out of.

The business outgrew them. You have been carrying the gap for a while and the resignation is a relief as much as a problem. Re-scope upwards, and move the budget with it.

The role was wrong. They were hired as one thing and spent their time doing another, usually a Finance Director doing Controller work or the reverse. Fix the specification rather than the salary, and consider whether the answer is two roles.

Something specific broke. A conflict, a reporting line, a decision they disagreed with, a promise that did not land. Replace like for like, but fix the cause first. It will surface in the interviews, because candidates ask.

The question worth asking properly

If you were hiring this role for the first time today, knowing the business as it is now rather than as it was when the last person joined, would you write the same specification? Most businesses that have grown in the last two or three years would not. The finance function that suited fifteen million of revenue rarely suits forty.

This is the one moment when changing the shape of the seat is cheap. Restructuring a finance function with someone in post is slow and awkward. Doing it while the seat is empty costs nothing but the thinking.

Covering the gap

Three months of notice, plus a search, plus the new person’s own notice period usually means a gap even when everything runs well. Decide how you are covering it early, because that choice changes how much pressure you put on the search.

An internal step-up is cheapest and best for morale where there is a capable Controller or Head of Finance. Do not leave it ambiguous: say it is temporary, say what it is worth, and say what happens at the end, or you create a second resignation.

An interim suits a hard external deadline or no internal candidate. The obvious cost is the day rate. The real risk is drifting into month five with no permanent search running, because the pain has been anaesthetised.

Leaving it empty is almost never right. The cost lands on the people below, who are also the people most able to leave. That is how one resignation becomes three.

The handover that actually matters

Most handovers produce a folder nobody opens. The useful version captures what lives in one person’s head and nowhere else. Ask for these specifically, in writing, and early enough to chase what is missing: the reporting calendar and what breaks if it is late; how the model actually works, meaning the assumptions rather than the file; the named contacts at the auditors, bank and lenders, with anything unresolved; every system and who administers it, including anything held in one personal login; and the honest state of the team, which is the part most often left unsaid.

Then ask what they would fix next. A departing finance leader with nothing left to lose will give you the most candid assessment of the function you will ever get.

Planning for an eight-week search

Across 63 of our own completed senior finance searches, the median was 90 days from first contact to an accepted offer, and 38 per cent finished within 60 days. Eight weeks is a realistic target that fits inside a three-month notice period. In our experience the searches that hit it share one thing: the specification is settled in week one and interview dates are in diaries before anyone is met. Almost all of the discipline is front-loaded.

Week one settles the seat, the outcomes for year one, the package range and who owns the decision. Weeks two and three are search and shortlist, with both interview stages already in diaries before anyone has been met. Week four is first stage, run close together rather than spread out. Weeks five and six are the exercise and final stage, with no new stages and nobody new added to the panel. Week seven is the decision and a verbal offer. Week eight is references and acceptance.

Where searches slip is rarely candidate supply. It is a specification that keeps moving, interviews booked reactively, a new stage appearing at week six because someone who was not consulted now wants to meet people, and a decision held back in the hope of a better option. If the shortlist is right, the best candidate is already in it.

If it would help to talk it through

We are a senior finance recruitment firm, so we are not a neutral party and would rather say so. But the useful conversation at this stage is usually not about a search. It is about what the seat should look like now, and what comparable businesses have paid recently. There is no obligation attached to that, and if the answer is that you should promote internally we will say so.

Dan Mackenzie, Director, Harper May. info@harpermay.com or tell us about the role.