Over the last four weeks we have seen global change on an unprecedented scale affecting every aspect of how we live, work, shop, travel and interact socially. All of this has an obvious impact on the economy with many businesses being forced to close or operate a skeleton service for the foreseeable future and predictions of a significant and lengthy downturn becoming more common.
As a specialist Treasury recruiter I am being asked by my network what trends I am seeing in the market and how this crisis is affecting Treasury recruitment. We know that Treasurers become more in demand and high profile during challenging periods as corporates turn their focus to cash visibility, forecasting and liquidity management but what does that mean for Treasury professionals who are looking to take the next step in their career or for companies looking to hire a Treasurer in this climate?
It is still too early to see any real, accurate trends coming through but my experience tells me that a sharp downturn in the economy will generally create opportunities for Treasury professionals. There are different challenges presented to organisations throughout the various stages of the cycle and the Treasury skill-set in demand varies accordingly. I expect there will be broadly three phases to Treasury recruitment over the medium-to-long term and I have summarised these below.
Phase one: Over the first few weeks of the crisis we have seen companies react to the sudden impact and focus on making the necessary decisions regarding operations and staff. Existing Treasury teams are extremely busy right now with forecasting, and determining the company’s cash position. Critical hires continue to progress but we are seeing some other recruitment being placed on temporary hold whilst Treasurers focus on the immediate job in hand of stabilising the function and ensuring capital allocation is as strong as possible.
Phase two: As the dust settles over the next few weeks I expect the focus on cash to continue, with corporates needing to forecast more accurately and further ahead than before, there will also be businesses who have determined that their capital allocation and cash management processes are not adequate in this new challenging world. This is when I would expect to see increased demand for the Treasury skill-set, it’s likely many businesses will look to bring in temporary or immediately available resource at this stage to enable a quick result, in particular if they do not currently have a Treasurer. Typically they will seek experienced individuals with the gravitas to work independently to assess the organisation’s current capital structure, cash management processes and forecasting, then implement a clearly defined strategy in a relatively short space of time to enable the group to more accurately determine their current status and the potential impact of various scenarios over the longer term.
Phase three: As we begin to move on from the initial downturn companies will again start to think about the long term future of their business. It’s likely that many organisations will need to refinance existing debt and possibly raise further finance / change their debt structure. Raising finance at this point will potentially be more challenging than over recent years as credit ratings may have been negatively affected and banks will be more cautious, a Treasurer with experience of negotiating debt in a more difficult market will be able to add a significant amount of value. Companies will also start to think about preparing for this scenario repeating in the future and risk management will be at the fore, with businesses keen to explore innovative ideas around how they can hedge their exposures. Systems will have played a large part in enabling Treasury professionals to work from home and it’s likely that some have been found in need of upgrade / improvement so I would also expect to see TMS projects being brought forward to ensure teams are well equipped to more effectively work from home moving forwards. Finally, insurance is likely to be high on the agenda for many corporates and it is increasingly common for the Group Treasurer to have ownership of this area given that it sits well within managing the group’s risk profile, we could see this becoming a more prominent part of the Treasurer’s role over the next few years. All of the above means that over the medium to long term I would expect to see an up-skilling of many existing Treasury teams and organisations hiring a Treasurer for the first time, with a trend towards companies relying more on strategic Treasury professionals to lead on the renegotiation of debt as well as driving the strategy of the group in terms of hedging, systems and insurance as part of the risk management agenda.
Of course, it remains to be seen what the impact of the Covid-19 crisis will have on the corporate world but I am confident that the role of the Treasurer will be at the very heart of guiding organisations (both large and small) through the challenges ahead. If you are interested in advice on your Treasury career or if you would like to better understand how a Treasury professional could add value to your company in this climate please don’t hesitate to get in touch for a confidential conversation.