From battling burnout to navigating workforce challenges, the finance world is at a turning point. What’s driving this leadership shakeup? Let’s explore.

The role of the CFO is undergoing a seismic shift. Once seen as the guardian of a company’s financial health, today’s CFOs are expected to be strategic leaders, technology adopters, and workforce planners—often all at once. With economic uncertainty and workforce challenges escalating, the stakes have never been higher.

From navigating “quiet quitting” to managing increased board-level scrutiny, CFOs are finding themselves in a constant state of firefighting. Many are questioning whether the demands of the role align with their long-term priorities. Retirement, career pivots, and shorter tenures are becoming increasingly common, signaling a fundamental shift in how finance leaders view their careers and contributions.

This article explores why CFOs are stepping back and what it means for the future of the finance function in an increasingly volatile landscape.

Are CFOs Stepping Down in Record Numbers?

The first half of 2024 has seen a significant rise in CFO turnover globally, with the rate reaching 8.9%, compared to 8.3% in H1 2023 and 8.5% in H1 2022, as per Russell Reynolds Associates (RRA). 

A notable 54% of departing CFOs chose retirement or board roles exclusively, marking a five-year high and a 15-percentage-point increase year-over-year. Key factors driving this trend include burnout, financial security, and a desire to transition to less demanding roles like angel investing or board memberships. 

Globally, 224 new CFOs were appointed in the first half of 2024, while many outgoing CFOs, particularly from the S&P 500, moved into roles like COO, president, or even CEO, further tightening the talent supply. 

With prominent retirements announced by finance leaders like Mike Smith (McCormick & Co.), KC McClure (Accenture), and Tracey T. Travis (Estée Lauder), the trend showcases shifting priorities and increased career reevaluations in the finance leadership landscape.

Record Turnover: A Sign of Bigger Problems? 

Year-to-date CFO turnover in 2024 is just shy of 2023’s record, with 224 new CFOs appointed in Q1-Q3 2024 compared to 233 in the same period last year. This turnover  is driven by significant activity in major indices like the S&P 500, S&P TSX Composite, and FTSE 250. Increased volatility in financial markets creates heightened performance expectations, leaving CFOs under immense pressure to deliver.

Industry-specific fluctuations compound this challenge. Healthcare and technology sectors recorded two-year and five-year highs in CFO turnover rates of 18.9% and 15.2%, respectively, due to a mix of CEO turnover, rising retirement rates, and underwhelming market performance. These trends indicate that CFOs in these sectors are particularly vulnerable to burnout or are reconsidering their career trajectories amidst changing industry dynamics.

Is Quiet Quitting the Biggest Challenge CFOs Face Today?

The CFO 2023 Outlook report highlights that 78% of CFOs identify “quiet quitting” as a significant issue within their organizations. This phenomenon, where employees only perform the bare minimum required, underscores broader challenges in workforce engagement and productivity. 

Quiet quitting often stems from employees feeling undervalued or disconnected from their company’s broader goals, which can lead to decreased effort. CFOs, therefore, must prioritize hiring individuals with the right mix of skills, ensuring they feel their roles have a meaningful impact. 

Beyond engagement, a shortage of skilled workers, particularly in accounting (32%), industry knowledge (31%), and project management (29%), compounds these challenges, emphasizing the need for strategic recruitment and retention.

The most sought-after skills include accounting (32%), industry knowledge (31%), and project management (29%), signaling a focus on immediate expertise over softer attributes like cultural fit (20%).

Talent & Economic Struggles: The Breaking Point for CFOs?

With 61% of CFOs identifying hiring and retaining talent as areas for potential budget cuts amidst recession fears, finance leaders face a delicate balancing act. As organizations wrestle with the need to reduce costs while striving to secure highly skilled talent, CFOs are often caught in the crossfire of competing priorities. This persistent tug-of-war is further complicated by macroeconomic uncertainties and board-level expectations for operational efficiency.

Interestingly, while there’s widespread talk of cutting talent budgets, 69% of CFOs still reported plans to increase payroll in 2023—a seeming paradox. This contradiction underscores the immense pressure CFOs face to deliver on workforce needs while navigating tight margins. The push to attract top talent while controlling costs creates an environment where CFOs must allocate resources with surgical precision. It’s a high-wire act that can easily lead to burnout or disillusionment, especially when strategic ambitions are at odds with fiscal realities.

While 64% of CFOs expressed confidence in the near-term U.S. economic environment’s positive effect on their companies, this optimism is often tempered by the reality of macroeconomic instability, labor market challenges, and rising inflation. Such misalignments between expectations and reality can lead CFOs to question their ability to meet corporate goals, pushing them toward the exit.

In today’s evolving landscape, CFOs are not just financial stewards but also strategic architects, workforce planners, and operational advisors. The growing demands of the role, coupled with increased scrutiny from stakeholders, make it challenging for many to sustain their position without feeling overwhelmed or undervalued.

Ultimately, CFOs quitting their roles reflect deeper systemic challenges—companies must address the structural disconnects between ambition and resource allocation to retain top finance talent.

The Rise of Shorter Tenures: Burnout or Better Opportunities?

The average CFO tenure has dropped to a five-year low of 5.6 years, with retirement or transitions to board roles now accounting for 52% of CFO departures—a five-year high. Many CFOs nearing the end of their careers are opting to retire rather than take on another demanding CFO role. Burnout, coupled with financial security and the lure of less taxing board responsibilities, makes retirement increasingly appealing.

This trend reflects a broader dissatisfaction with the growing demands placed on CFOs. The constant juggling of macroeconomic pressures, workforce challenges, and strategic deliverables leaves little room for long-term career commitments.

Gender Diversity Gains: Progress or a Temporary Fix?

CFO gender diversity continues to make strides, with 60 women appointed as CFOs in Q1-Q3 2024—the highest number in the past five years. Notably, the technology and financial services sectors saw 38% and 48% of incoming CFOs being women, doubling last year’s numbers.

While these advancements are encouraging, the broader picture reveals persistent barriers. For instance, the S&P 500 is still 42 years away from achieving gender parity in CFO roles. Without robust internal pipelines and sponsorship programs targeting underrepresented groups, organizations risk losing momentum. Gender diversity gains must also be matched with an inclusive culture that reduces the pressures driving CFO turnover overall.

Internal vs. External Hires: Is Succession Planning Broken?

Succession planning plays a critical role in CFO turnover dynamics. Over half (55%) of new CFOs globally in 2024 were internal appointees. While Asian indices like the Nikkei 225 and Hang Seng predominantly promote internal candidates, Western indices continue to rely on external hires.

Interestingly, external appointees in 2024 are increasingly experienced CFOs, reflecting organizations’ preference for seasoned leaders to navigate complex economic conditions. 

However, this trend also highlights the shortcomings of succession planning. Organizations struggling to develop internal talent pipelines risk higher turnover as external appointees face steep learning curves and higher performance expectations.

Can Companies Keep Their CFOs?

CFOs are facing unprecedented challenges—from navigating economic instability and workforce dilemmas to meeting soaring expectations as strategic leaders. The growing pressures of the role, coupled with shorter tenures, record turnover rates, and rising burnout, are forcing many finance leaders to reevaluate their positions. With a notable 54% of departing CFOs opting for retirement or board roles, it’s clear that the demands of the job are pushing even seasoned leaders to seek alternative, less taxing opportunities.

While there are bright spots, such as strides in gender diversity and the emergence of CFOs as strategic architects, the underlying systemic issues—misaligned expectations, talent shortages, and lack of succession planning—persist. Organizations must address these challenges to retain and empower their CFOs.

The question remains: As the pressures of the CFO role continue to mount, will companies step up to support their finance leaders, or are we poised to see an even greater exodus from the C-suite in the years ahead?