“The biggest challenge of any business right now, I believe, is to continue to find talent,” says the CFO of Innovative Solutions.

His and other growing businesses urgently need high-level expertise, says Wolf, who joined the cloud consulting, migration, and development firm late last year. For example, West Henrietta, N.Y.–headquartered Innovative Solutions is looking to hire a senior employee somewhere between vice president of finance and chief financial officer, probably with 20 years’ experience.

“Those people are in incredible demand, but they’re really, really hard to find,” says Wolf, leader of an eight-member finance team at the company, where his wide-ranging role includes working with the CEO and the president on strategy. They’re also unlikely to switch jobs, he adds. “A lot of them have been in positions for a long time, they enjoy where they are, and it’s difficult to convince people to make a change.”

CFOs and their organizations are competing for top financial talent in a job market where certain candidates are expected to remain scarce, despite ongoing layoffs. As always, compensation matters when it comes to attracting and keeping the best people. But being an engaged, empathic leader and ensuring that each team member has a sense of purpose can give employers an edge, say CFOs and experts who work closely with them.

If Wolf and his peers agree on one thing, it’s that finding the talent they need isn’t easy. In a survey of 234 CFOs by research firm Gartner last July, hiring and retaining enough staff emerged as their most difficult task over the next 12 months. It was also the only task chosen by a majority of respondents, with 54% ranking it No. 1.

“Talent continues to be a major concern of CFOs,” says Steve Gallucci, global and U.S. CFO program leader with Deloitte. Gallucci cites quarterly surveys by his organization that ask CFOs to name their most pressing internal and external risks. “Time and again, over the last, I’d say, three years, talent has risen to the top.”

Jeff Constable, co-leader of the global financial officers practice at organizational consulting firm Korn Ferry, sees two forces driving the talent shortage. “It’s been a combination of a tight labor market combined with a less physical geographic domain,” Constable says, referring to the rise of remote work. “The looser labor market and the importance of place made it a little bit easier to manage teams, in a way, for a long time.”

But as Constable points out, the mass layoffs at technology companies have created hiring opportunities. Just ask Jonathan Carr, CFO of cybersecurity firm Armis. In their haste to respond to shareholders and other investors, tech businesses are letting highly skilled people go, explains Carr, whose responsibilities include strategic analysis. “In that respect, there’s a lot of really great talent out there in the market.”

For CFOs, the timing is good. As finance teams get pushed to embrace automation and digitization, skill sets are changing, Gallucci notes. “While most finance organizations were built with folks that have backgrounds similar to mine—accounting, risk, controls—what CFOs are now looking for are people with a much greater degree of tech fluency, data analytics skills.”

Constable has noticed big changes afoot. “If you talk to CFOs, you’ll hear the theme of, ‘We’re going through a transformation of the finance function, or a financial transformation,’” he says. Among other things, that could mean moving from on-premises software to the cloud, integrating finance functions after several acquisitions, or deploying more automation or artificial intelligence. “So we do hear a lot of need from CFOs around systems and people who understand the change management part of the finance organization.”

Five years ago, employers sought more-traditional accounting skills, says Jason Dess, who leads global CFO and enterprise value services at Accenture. “Now it’s about ensuring you have the right skills to make strategic decisions,” Dess maintains. “As CFOs try to become a better business partner or they’re taking on more transformative elements across the organization, there’s a real need to drive insight.”

To that end, Carr sees demand for financial planning and analysis (FP&A). “People are looking for those folks that have the skill set of digging into the numbers and then looking forward,” he says, noting that a VP of FP&A for his 24-member finance team was one of Palo Alto–based Armis’s latest senior hires. “It’s taking the context of the history and using that to inform decisions and be partners and help all of our leaders make the right financial decisions.”

CFOs also want data scientists and even economists, Dess says. “As they get deeper into scenario forecasting, they have a need to bring a broader perspective.” ESG is another hot area: “There’s a range of skills that are required, from understanding the regulatory components of it through to understanding the risk performance of your business.”

At the same time, companies have leaner teams, Carr observes. “Technology people are probably 70% of the expense base,” he says. “So making sure that you’ve got top talent out there is more critical than ever, because you’re asking each one of your teams to be more lean, to do more, to drive the things that add the biggest value.”

To attract and keep top talent, CFOs must offer competitive pay, while being mindful that money isn’t everything. “Compensation always shows up in the top three most important things that people are interested in,” Gallucci says. “But I think the other things that you hear with compensation [are] career development opportunities, certainly flexibility.”

For Constable, it comes back to purpose. “Feeling a part of something and being affiliated with a sense of vision and mission and purpose of, like, ‘What are we all trying to do here?’” he says.

“When people leave organizations, it’s because they don’t feel that. And I think that’s been a challenge for some CFOs as we’ve become a more remote world.”

It isn’t as simple as visiting the troops at different offices once a year, Constable warns. “When you’re a senior executive in a company, like a CFO, you’re CEO of something,” he says. “You have to do what good CEOs do, which is put goalposts out there that articulate a vision or a mission or a purpose for your organization.”

In a recent study, Accenture identifies four factors besides compensation that help attract and retain people, Dess says. One is purpose. Two, “teams expect to be supported by their leaders,” Dess explains. Three, people prefer employers that use the latest technology to empower their operations. The fourth factor: “How are leaders investing in people through training and building their career?”

With everyone who reports to him, Wolf holds weekly one-on-one meetings for at least 30 minutes. For him, it’s a chance to connect with team members privately and to ensure that they have the tools and support they need for success. “Right now, I’m spending four hours of my week just on that, but I see the dividends that it pays, because they know that I care.”

Carr tries to understand team members’ goals. “Knowing what it is that person’s going to value and then working with them to go achieve that, I think, is such a critical part of recruitment,” he says, “[and], ultimately, retention and engagement while they’re still with you.”

Team members need to feel that their role matters, Wolf argues. “A lot of people don’t take the time to just explain to an employee, ‘Hey, this is why what you’re doing is important to the overall well-being of the company.’”

Besides leading with purpose, CFOs who excel on the talent front do two other things well, Constable says. First, “They root out underperformance and move on it, either by letting go of the person or intervening with coaching and development resources.” For superstars who might lack recognition, those CFOs find stretch opportunities.

In Constable’s experience, talent-oriented CFOs also take pride in helping others succeed. “They don’t have to think long about the question of, ‘Tell me about some of your success stories about people you’ve managed,’” he says. “Their eyes light up, and they love to rattle off five or six names of people who have surpassed them in their careers now.”

Top leaders let their personalities shine through as well, Constable relates. “The framework and the philosophy and the purpose and all that, I think, is really important,” he says. “But also knowing when to break character and be a real person for your teams.”

Asked where CFOs see the talent market heading in 2023, Gallucci says their overall economic outlook is cautious: “CFOs have a level of optimism that’s about as low as we’ve seen in the last couple of years.” As for talent, “their perspective is it’s going to remain tight for the time to come, even though [there] are certainly signs that the economy is slowing.”

Wolf doesn’t expect hiring sought-after people to get any easier for him in a work-from-anywhere world. “I think it’s going to continue to be a challenge, especially for businesses like ours, where we feel the in-person presence and connection is important,” he says. “We’re still seeing, when we talk to people, that there’s a lot of candidates that will lead with, ‘Hey, listen, I’m only open to a job where I’m going to work 100% remotely.’”

Carr can relate. “If you’re in a startup environment, it can be challenging to convince people in today’s market that they have to come in,” he says. “I would love to see our world shift more to dedicated times together face-to-face, but continued flexibility for other avenues for people to manage their whole self.”

For 2023, Dess sees “a softening in general demand,” partly thanks to layoffs. However, pressure to find certain skills will persist, he reckons. “CFOs and finance functions are driving reinvention agendas right now for organizations, in a compressed transformation timeline,” Dess says. “They need specific talent to be able to move that needle.”