The demand for Chief Financial Officers (CFOs) in India Inc has surged in recent months, with industry experts predicting this trend will continue to accelerate over the next 6 to 12 months. Several factors are fuelling this demand—an uptick in Initial Public Offerings (IPOs), growing market complexities, and the evolving role of CFOs in shaping business strategy. In response to this need, companies are also turning to virtual CFO services. Meanwhile, a trend toward shorter tenures for CFOs is emerging, further reshaping how the role is perceived within organizations.
CFO Hiring Forecast to Remain Strong Over the Next Year
Srinivasan V. Swamy, founder of CFO Bridge, foresees a continued surge in CFO hiring, particularly among smaller and mid-sized companies that are scaling rapidly. “Over the next 6 to 12 months, the demand for CFOs will only grow,” says Swamy.
Even companies with a turnover of Rs 100 crore are now looking to hire a CFO, a role that wasn’t typically deemed necessary for such organizations in the past. This trend is largely driven by the explosion of IPO activity in India, which has created a need for financial leaders capable of navigating public market regulations, managing investor relations, and crafting long-term growth strategiesSrinivasan V. Swamy, founder of CFO Bridge
As more businesses scale, both in terms of revenue and operations, Swamy emphasizes that companies are increasingly recognising the importance of having a strategic financial leader. “Companies are realising they need more than just a number cruncher. They need someone who can steer the financial strategy, manage investor expectations, and help scale the business effectively,” he explains.
Key Drivers Fuelling the Rising DemandThe increasing demand for CFOs is being driven by a confluence of market conditions, regulatory pressures, and the growing complexity of financial strategy. SVenkat, Co-Founder of Practus, highlights that many companies are looking for CFOs who can guide them through capital raising, mergers and acquisitions (M&A), and complex regulatory landscapes.
“With IPOs continuing to rise and significant foreign capital inflows into India, there is an urgent need for CFOs who can navigate these complexities,” he says. “The demand for CFOs with experience in fundraising, managing complex risks, and handling M&A has never been higher.”
Madhur Nevatia, Partner at Longhouse Consulting, agrees that market conditions are contributing to the rising demand for CFOs. “As IPO activity surges, companies are also facing tightening funding conditions in the private market,” he notes. “CFOs with expertise in debt markets and investor relations are now becoming crucial to manage capital effectively and maintain investor confidence.”
While technological advancements like artificial intelligence (AI) and machine learning are poised to transform finance, Swamy believes these innovations are not yet a major factor in the hiring decisions for CFOs. “Generative AI in finance is still in its infancy,” he notes. “But as it matures, companies may start seeking CFOs with a strong tech background to better integrate financial operations with cutting-edge technology.”
Startups and Established Firms: Who’s Hiring CFOs and Why?
Startups and established companies are both ramping up efforts to hire CFOs, but the reasons behind their hiring needs differ. Swamy points out that startups, particularly those preparing for rapid growth or IPOs, are leading the charge. “When a startup hits ₹100 crore in revenue, the need for a CFO becomes paramount,” he says. “They need professionals who can help manage growth, ensure compliance, and establish financial systems capable of supporting public listing.”
For established firms, the demand for CFOs often arises when companies are preparing for expansion, M&A activity, or international growth. SVenkat notes that the signals indicating the need for a CFO are clear: when a company’s growth accelerates, it raises external capital, or formal governance structures are needed.”Larger companies are more likely to hire CFOs when they’re looking to formalize their financial systems or when they need guidance navigating complex international operations,” he says.
Nevatia highlights that the role of CFOs in startups is evolving as these businesses mature.
In the early stages, CFOs primarily handle operational finance, but as startups grow, they require strategic CFOs who can optimize capital structure, handle investor relations, and prepare for significant liquidity events such as IPOs or acquisitionsMadhur Nevatia, Partner at Longhouse Consulting
Virtual CFOs: A Flexible Solution for Growing StartupAmid the increasing need for CFOs, many smaller companies are turning to virtual CFO services as a cost-effective and flexible alternative to hiring full-time financial leaders. Swamy sees the rise of virtual CFOs as a positive trend.
“Virtual CFOs are in high demand because they provide startups access to strategic financial leadership without the overhead of a full-time hire,” he says. “They allow businesses to scale intelligently, without sacrificing financial oversight.”
However, SVenkat cautions that virtual CFOs come with their own set of challenges.
While virtual CFOs offer flexibility, they may not always be as embedded in the company’s day-to-day operations or culture as a full-time CFO,” he explains. “For smaller companies that don’t yet need a full-time hire, a virtual CFO is an ideal solution, but as the company grows, the need for a more dedicated leadership role becomes inevitableSVenkat, Co-Founder of Practus
Nevatia concurs, noting that while virtual CFOs can effectively handle routine financial tasks such as cash flow and payroll, their role becomes more limited as the company matures. “For early-stage companies, a virtual CFO can handle operational finance well, but as the company scales and its needs become more complex, a full-time CFO becomes essential,” he adds.
CFO Tenure: A Trend Toward Shorter Stints?
In an industry where leadership stability was once the norm, the tenure of CFOs is becoming shorter. Both startups and established firms are increasingly hiring CFOs with the expectation that they will remain in their roles long enough to impact the company’s growth trajectory, but not necessarily for decades.
Swamy notes a growing trend where CFOs leave roles sooner than in the past, often in pursuit of more lucrative or higher-profile opportunities. “We are seeing a trend where CFOs are leaving roles faster, particularly when equity incentives or the opportunity to lead an IPO is on the table,” he says. “While the role of CFO remains critical, the financial rewards and career growth in the startup ecosystem are driving CFOs to change jobs more frequently.”
SVenkat adds that CFOs are now looking for roles that offer both financial rewards and the chance to make a lasting impact on a company’s strategic direction. “If the company’s vision and the CFO’s career goals don’t align, CFOs are more likely to move on,” he explains.
For businesses, this shift in CFO tenure presents challenges. Nevatia warns that turnover at the CFO level can disrupt long-term financial strategies and shake investor confidence. “CFOs play a crucial role in managing a company’s finances and investor relations,” he says. “Frequent turnover can create instability, affecting not just operations, but also the trust that investors have in the company’s leadership.”
