While some industries like professional sports and technology tend to be outliers, finance leadership tenure is consistently the lowest when compared to other members of the C-suite.
As a result, organizations seeking financial talent are looking at internal and first-time CFO candidates to take the financial reins of their companies, according to the Russell Reynolds Q1 2025 CFO Turnover Index. The findings show CFO turnover is rising at larger organizations, and companies across the board are taking chances on inaugural CFOs or internal promotions.
First-time CFOs and ongoing tenure rates
Nearly 6-in-10 (59%) of CFOs were first-timers, up from 57% during the same quarter last year. Interestingly, the Nikkei 225 (the top 225 companies on the Japanese stock market) saw 12-of-13 (92%) of its new CFOs be first-timers, including Sony’s CFO Lin Tao. Globally, female CFO hiring hit records in Japan and Germany and is up 8% year over year, with women accounting for 39% of incoming CFOs in Q1 2025.
Internal hires were also on the rise in Q1, with 58% of CFOs being internal appointees. This time last year, the trend was flipped, 48% internal and 52% external, signaling possible ROI around the past year’s efforts, like upskilling and using technology to shift finance employees away from remedial tasks.
Global tenure on average among finance chiefs this quarter came in at 5.7 years, down from 6.2 years in Q1 2024. By sector, technology had the highest tenure (7.4 years), with financial services (3.6 years) having the lowest. This hints that CFOs who can be more strategic and work closely with founders or product developers to drive business change are more likely to stick around.
Turnover and landing spots
For large companies, total CFO departures tallied 95 globally in Q1, up from 88 in Q1 2024. S&P 500 CFOs were the most likely to leave and had the highest quarterly turnover rate (6.6%) seen in five years. Other large-cap companies globally saw high CFO turnover as well, including companies on the Financial Times Stock Exchange 100 Index at 8%; the Cotation Assistée en Continu 40, France’s benchmark index, at 10%; and the Deutscher Aktienindex 40, Germany’s blue-chip index, also at 10%.
CFOs who moved on from their roles were nearly split on their destinations, with 51% retiring or joining a board and 50% taking on new roles, up 3.1% year over year. Areas where CFOs are most likely to remain in the workforce include technology (84%) and industrials (67%).
Talent strategy shifts: reaction or long-term fix?
The data indicates that finance talent continues to be at a premium, and many organizations are betting on first-timers and internal hires more than ever as a result. However, it’s unclear whether these moves reflect strong upskilling processes and succession planning or are simply reactive responses to a tightening talent market.
The sharp rise in internal appointments could point to progress in leadership development, but it might also reflect cost pressures or the difficulty of attracting top external candidates. And while nearly half of outgoing CFOs are stepping into new roles instead of retiring, that only makes the talent pool more competitive, as a subset of high-performing finance leaders continue to move from one opportunity to the next.
