Market Update - February 2025

Hello, and welcome to February’s Finance Market Update.

It’s hard to believe it’s already the end of February, but I’m sure everyone’s had enough of the winter weather and is looking forward to spring.

February has seen the market continuing to move in the right direction, with plenty of new growth roles coming onto the market. This is a welcome sight and suggests that companies are looking to expand their finance and accounting teams as they chase business growth and take on new projects.

In this update, we’ll look back on our recent breakfast roundtable on setting up businesses and founders for successful exits. We’ll discuss the implications of a recent survey indicating that UK CFOs will focus on cost-cutting this year, as well as exploring some eye-catching insights from our Finance and Accounting Salary Guide. We’ll also look ahead to March’s exciting roundtable on “Raising Smart for 2025”.

Setting your Business and Founders Up for a Successful Exit - Breakfast Roundtable

This month, we joined Evelyn Partners to co-host a highly engaging breakfast roundtable on the topic of successfully preparing businesses and founders for an exit. A stellar group of CFOs and FDs treated us to a very insightful discussion on the ins and outs of exit planning and had plenty of interesting insights to share.

The discussion touched on a range of topics, from tax to strategy, and contained a few highly interesting talking points.

The importance of planning ahead. A central theme was the importance of early preparation. The group agreed that businesses should ideally begin planning at least three years in advance of a target exit date, allowing plenty of time to address potential issues, optimise financial performance, and ensure all necessary documentation is in order. Starting early can help reduce the stress associated with due diligence, leading to a smoother and more efficient exit process for everyone involved.

Make sure you do your due diligence. The roundtable participants emphasised the need for rigorously reviewing and stress-testing all aspects of the business, from share schemes and pricing policies to customer contracts and financial reporting. Policies and procedures from earlier stages of a company's growth may require significant updates, so identifying and addressing weaknesses before external due diligence begins is crucial.

Remember the founder. While the corporate aspects of exits are paramount, the group agreed on the importance of understanding the founder's personal goals and post-exit plans. Understanding what founders plan to do next allows for tailored structuring of the deal to align with the founder's long-term objectives and ensure a complete and satisfying transition.

UK CFOs choose cutting costs as their top priority.

Deloitte’s latest survey of UK CFOs suggests that many CFOs have moved into 2025 with a focus on cutting costs. Indeed, cost-cutting was the most popular strategy cited for responding to the forthcoming rise in National Insurance contributions. ?

Cost reduction was rated by CFOs as the top priority for their businesses. CFOs see this as part of a general reduction in corporate spending, with 58% expecting reductions in discretionary spending. In addition to cutting discretionary spending, the survey findings also suggest that CFOs prioritising cost control are likely to rein back on corporate investment and hiring.

Although fewer CFOs are expecting increases in hiring compared to last year, wage increases are noticeably slowing. As a result, wage pressures are expected to relax somewhat, giving businesses and their CFOs more breathing room as the year goes on. ?

Interest rates are expected to reduce by the end of 2025, and credit conditions are currently easier than they have been for some time. Despite their current levels of caution, there are reasons for CFOs to feel optimistic about the year ahead.

Three quarters of Finance and Accounting professionals expect a pay rise this year.

While the importance of cost-reduction for CFOs highlights how tricky the economic terrain has been lately, our Finance and Accountancy Salary Guide reveals that 74% of Finance and Accounting professionals are expecting a pay rise this year.

This indicates that F&A staff are valued by their firms and reaping the rewards of their usefulness during the last few years. According to our guide, three-quarters of those who received a pay rise in the last 12 months also said that they feel valued by their company.

Although many businesses are under pressure to keep costs down, our guide shows that most of those planning to leave their roles point to higher pay as their main motivation, indicating that managers should consider regular salary increases for their top talent or risk losing them in the coming year.

For those looking for more information on what F&A staff expect this year, our 2025 Finance and Accountancy Salary Guide contains up to date salary benchmarks and detailed market analysis and can be downloaded here: https://absolute-recruit.com/finance-accounting-salary-guide/

Raising Smart in 2025

On Thursday 27th March we’ll be joining forces with Elliott Gaspar of OxConsult to host a breakfast roundtable on strategies, insights and networking for seed to Series A companies.

The roundtable will be highly relevant for any Founder, CEO, CFO or FD looking to fund-raise at Seed or Series A in the next 12 months. The discussion should result in plenty of actionable insights, making it an excellent choice for founders and CFOs looking to raise their first ￡10m.

Spaces for this one are limited, so make sure you get in touch if you want to get involved.

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 with me.