Market Update - August 2024

Hello, and welcome to this month’s Finance Market Update. The market seems to be slowly growing, it’s by far a booming market but there are signs of more growth focussed roles coming to the market again!

August can often prove to be a challenging month for job seekers and companies hiring, as it can be tricky to negotiate diaries with hiring managers and candidates. Although, some of our clients have been taking advantage of less competition in the market which I will talk about later.

On the subject of holiday…I am counting down the days until the Reeve summer holiday. I’m so looking forward to relaxing! I say relaxing, taking two children abroad is a lot of fun, maybe not so relaxing! Hope everyone has been enjoying their summer.

Optimism Continues

There’s a continued sense of optimism within the market. Looking at the bigger picture, inflation is back down, the new government has made some significant economic announcements, and the interest rate has been cut for the first time in years—all positive signs for businesses. Most MDs/ Founders and CFOs we’ve spoken with over the last few weeks echo this positivity.

A recent report by Davies Group found remarkably high confidence in the market. 89% of business decision-makers expressed confidence in their company’s prospects for the next 12 months.

We’ve had a number of discussions with clients about growth-focused opportunities. As confidence returns, more companies are looking again to expand, whether that’s expansion into new markets (we’ve got several clients picking plans back up to push further into Europe and the USA) or raising capital.

Several of our start-up clients have successfully raised funds to fuel their growth plans. And there is movement again within the VCs—one client we spoke with has already invested more in the first half of 2024 than in the whole of 2023. As reported in one of our earlier updates, AI and clean tech still seem to be leading the way regarding where funding is being directed, with Fintech and SaaS closely behind.

Although it’s great to see movement back in the investment market, a European firm noted that investment cycles seemed to be taking longer than usual. Whether that’s unique to them, we’re not sure, but the economic uncertainty that’s plagued so many for the last few years has seen many companies miss their financial / growth targets, extending planned exits.?

Eurozone Economic Growth

Estimates of eurozone economic growth in Q2 were published last month. Despite the market's confidence, the data points to little momentum across the board, with quarter-on-quarter growth of 0.3 per cent, unchanged from the previous quarter.

Globally, the manufacturing industry is still struggling due in part to continued supply chain disruptions, rising freight costs, and lower demand for investment and consumer goods. In the USA, the big tech companies are still falling short on growth figures and hiring, something that certainly won’t be helped by the current political uncertainty.

Despite this, the UK seems to be faring well, with domestic manufacturing activity seemingly picking up the pace in July, counteracting weak export orders.

Interesting Opportunities with SMEs

It’s fair to say that owner-managed businesses have been through the wringer over the last few years. Navigating Brexit and the pandemic, to the cost-of-living crisis and the broader economic disruption we’ve experienced in the last 24 months. Many founders are now looking ahead to exit plans and growth.

Conversations with these MDs around potential exit plans have raised the need for experienced FDs / CFOs. Many have managed this far without a strong finance leader and are now looking for experienced professionals to get their finance function (and business) into shape ahead of the sale and to help navigate the process.

Pre-sale work can often include developing new and more sophisticated board reporting, enhancing data quality throughout the business, implementing new systems, automating processes, building financial models, and cutting costs.

Once ready, the expectations for the FD/ CFO would be to deal with investors / interested parties, external advisors and consultants, and legal teams to prepare forecasts, models and other due diligence documentation ahead of the sale.

Candidates with prior exit experience are already highly sought after and will continue to be in demand, particularly those who can demonstrate value creation during these processes.

Hiring in August / Recruiting for Jan 2025

Hiring in August can often prove challenging, with candidates and hiring managers off on holiday, making organising diaries difficult. That said, we always find August a great time to secure candidates – there are fewer companies actively recruiting, meaning less competition. With a number of candidates also off work, they’re more easily available for interviews and often in a better headspace to really think about your opportunity and connect with your team.

Companies wanting to bring someone into the business in January 2025 probably won’t have even started the process yet, but now is an ideal time. The average process to hire a senior finance professional from advert to offer is six weeks, and the majority of senior candidates are on a 3-month notice period. So, starting the search mid-August is perfect if you want your new hire to join in January.

Thank you for taking the time to read our senior finance market update. As always, if you would like any advice on hiring, candidates, salary benchmarking, or a general chat about the market or to discuss your next role, please get in touch.