Two businesses advertise for a Head of Finance in the same week. The first turns over £10 million, has never employed a qualified accountant, and wants someone to take the month-end away from the founder. The second is an investor-backed group with several entities, a lender asking for monthly covenant reporting and an acquisition on the horizon. Both job adverts use the same three words. The jobs have very little else in common.
“Head of Finance” has no agreed definition. It sits somewhere between Financial Controller and Finance Director, but where exactly depends on the business using it. Treat the title as a fixed job and you will probably pay the wrong salary, attract the wrong candidates, or both.
The same title, a very different job
In a business turning over between £5 million and £15 million, the Head of Finance is often the first senior finance hire. They may be the only qualified accountant in the building, working with a small transactional team, perhaps a bookkeeper and a purchase ledger clerk. Much of the week goes on getting the numbers right: closing the month, building a first proper management pack and taking cash forecasting out of the founder’s head.
Between £15 million and £40 million, the shape changes. There is usually a small team underneath, such as a management accountant and an assistant, so the Head of Finance spends more time leading and reviewing than doing. They are expected to explain the numbers to the directors, not just produce them.
Above roughly £40 million, either the Head of Finance runs a fuller function, or a Finance Director sits above them and the Head of Finance runs the engine room beneath. Both are legitimate. They are simply different jobs.
Scope sets the pay, not the title
Because the job changes, so does the salary. Base pay for a first senior finance hire in a £5 million to £15 million business typically runs from £70,000 to £85,000 in London and £60,000 to £74,000 elsewhere in the UK. In an established SME of £15 million to £40 million, the London range moves to £80,000 to £100,000, with £70,000 to £86,000 regionally. In larger or investor-backed businesses, it reaches £95,000 to £120,000 in London and £82,000 to £106,000 outside it. A bonus of 10 to 20 per cent on top is common.
Those bands overlap with the roles on either side. A Financial Controller in a larger or more complex business can earn £78,000 to £115,000 in London, comfortably above a Head of Finance in a smaller company. That is the clearest evidence that the market prices scope, not titles.
The factors that actually move a role up or down are fairly consistent:
- Turnover and complexity. One entity is a different proposition from a multi-entity group needing consolidation.
- Team size. Managing nobody and managing a function of eight require different skills.
- Reporting line. Reporting to a founder-MD is not the same as reporting to a Finance Director, a CFO or a board.
- Board exposure. Presenting the numbers at board meetings raises the stakes.
- Transactions and investors. Lender reporting, a funding round, due diligence or an acquisition all add weight to the role.
What goes wrong when you copy someone else’s advert
Most job adverts start life as somebody else’s. A hiring manager finds one that looks thorough and adapts it, but it was written for a business of a different size, stage and structure.
Take an illustrative example. A £12 million manufacturer borrows an advert from an investor-backed group. It asks for experience of private equity reporting, consolidation across multiple entities and leading a team of six. The salary on offer is pitched at a first-hire level. Candidates with that experience won’t apply at that salary, and those who would take the salary lack the experience. The business concludes there are no good candidates, when in fact the brief contradicted itself.
The reverse happens too. A larger business copies a small-company advert for a hands-on role, pays accordingly, then finds the new hire struggling to lead a team or face investors. Both failures started with the advert.
There is a third trap: using the Head of Finance title when the business really needs a Finance Director. If the role involves a board seat, direct responsibility to investors, or leading a sale or major fundraise, that is FD territory, and pay of £110,000 to £170,000 in London reflects that. Calling the job Head of Finance to keep the salary down rarely works for long.
How to define the role for your own business
The fix is to write the brief from the inside out, starting with what your business needs over the next two or three years.
- List the work, not the title. Write down which reports, deadlines and decisions this person will own each month. If most of it is production, you are hiring a hands-on first hire. If most of it is review and explanation, you need a leader.
- Be honest about the team. Say exactly who will report in, and whether the team will grow.
- Name the reporting line. State who the role reports to and whether it will attend board meetings. This single detail tells a candidate more about seniority than any adjective.
- Flag the events. If a refinancing, investment round, system change or acquisition is likely, say so. It changes who applies and what they expect.
- Price against scope. Once the scope is clear, check it against the salary bands for that size and type of business, not against the title alone. Regulated firms, for example, sit in their own band, typically £90,000 to £120,000 in London.
Professional bodies are a useful sense check here. The ICAEW’s business resources set out the kind of financial management and reporting expectations that tend to come with more senior roles, which can help you judge where your requirement really sits.
If the scope is uncertain, an interim appointment can be a sensible way to find out. An interim Head of Finance in a straightforward business typically costs £380 to £500 a day in London and £320 to £430 elsewhere, and a few months will show whether the role needs a hands-on operator or a seasoned leader. For businesses ready to make a permanent appointment, specialist support with recruiting a Head of Finance can help pin down the scope before the advert goes out, which is usually where the hire is won or lost.
The title is the last thing to decide
It is tempting to start with the title. In practice it should be the last decision. Work out the scope, the team, the reporting line and the events coming up; set the pay from that; and only then choose what to call the job. Get the order right and “Head of Finance” becomes an accurate label rather than a guess, and the people who apply will be the people you actually need.
About the author
Adrian Lawrence FCA is the founder of FD Capital Group, which brings together five specialist recruitment firms including Accountancy Capital and FD Capital.
An ICAEW Fellow and former listed-company Finance Director, he has more than 25 years’ experience at C-suite level.
