Veredus has recruited eight NHS Directors of Finance (DoFs) in the past eight months for both acute and mental health providers. A key question candidates raise is what experience level and candidate background is the Trust seeking? Does the Trust seek an NHS man or woman through and through or are they really open to other public or private sector backgrounds? This is a fundamental question and we within the Health Practice at Veredus were curious to understand how broad the backgrounds are of existing Directors of Finance in the NHS.

1. Financial Services Case Study
Directors of Finance: A case study into the challenges of securing diverse experience into the NHS.
The Background
Veredus has recruited eight NHS Directors of Finance (DoFs) in the past eight months for both acute and mental health providers. A key question
candidates raise is what experience level and candidate background is the Trust seeking? Does the Trust seek an NHS man or woman through and
through or are they really open to other public or private sector backgrounds? This is a fundamental question and we within the Health Practice
at Veredus were curious to understand how broad the backgrounds are of existing Directors of Finance in the NHS.
The short answer is that NHSTrusts’ openness to hire outside of the NHS is relative to the context in which theTrust is operating. However, what is striking
are the low numbers of DoFs with board level private sector experience working in NHS provider DoF posts. Veredus research conducted between
November and December 2013 indicates just 8% of DoFs within provider Trusts have held board level private sector posts in their careers.
This is even more interesting given the tenure of DoFs within the NHS remains relatively short.The Head ofVeredus’ Healthcare Practice, Annette Sergeant,
published ‘Bold and Old’ in 2009 which analysed the tenure of CEOs and DoFs within the NHS. The study found that within two years, 40% of DoFs would
have left their posts. By the end of year four, 60% would have moved on with 22% having been promoted (meaning they went on to be CEOs or DoFs in
larger or more complex NHS organisations).
The Challenge
Given the sharp turnover of DoFs in provider Trusts and the establishment of Clinical Commissioning Groups, which absorbed a significant number of
rising stars from provider Trusts at the deputy director level, there is a question mark regarding where the next generation of provider DoFs will come
from. The vast majority of provider Trusts also describe “commercial acumen” as one of the key skills they wish to have.
Veredus works across the private, public and voluntary sectors and finds that the pattern does vary between sectors. Within local government a similar
picture emerges to the NHS, where DoFs have often worked within the same sector for their entire career. This is partly due to the required financial
qualifications and a highly structured approach to advancement. Within the central government sector, one recent client was keen to encourage, and
did receive, a diverse range of applications from both the private and public sector and Veredus has seen clients positively seek private sector expertise.
Within the education sector, appointments again have been mixed with some clients extremely open to higher education outsiders.
This analysis does not seek to suggest that those from outside the NHS cannot succeed or successfully transition into the NHS. We are aware of a
number of private sector DoFs who have made a successful transition into the NHS and are enjoying their roles.
Our research indicates fifteen percent of current NHS CEOs were former DoFs suggesting that DoFs continue to have successful NHS careers albeit in
a different role.
However, securing an NHS DoF post remains a challenge to outsiders. Whilst the complexity and scope of these posts is very attractive, the nature of
regulation, significant political context and cultural differences can be a hindrance, and to some, a frustration.
1 Veredus assessed the career profiles of DoFs within all provider NHS Trusts in England. 8% were identified to have previously worked within the private sector at board level. This excludes professional
interim DoFs but does include DoFs “acting up.”
2 Bold and Old,’ Annette Sergeant, 2009 pg 4-5.
3 Veredus assessed the career profiles of CEOs within all provider NHS trusts in England. 15% were identified as having previously been a Director of Finance. This excludes professional interim CEOs
but does include DoFs “acting up” into the role of CEO.
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2. Financial Services
Case Study
The Challenge
Pay remains a critical factor in explaining why there is a small percentage of DoFs with board level private sector backgrounds. It is well known that NHS
DoF salaries have risen significantly over the last couple of years. However, the total remuneration remains typically lower than a private sector
organisation of an equivalent scale and turnover. There was much publicity when the new head of NHS England, Simon Stevens, voluntarily decided to
take a ten percent pay cut to £189,000. This arguably makes further DoF salary rises politically difficult. A small number of NHS DoFs are already paid
similar or even higher salaries than Stevens! Equally, NHS Trusts remain risk averse when appointing. A slowing rate of increasing Trust income, plus
significant operational and political challenges can develop a risk averse mentality amongst Appointment Panels, and a reliance on appointments of
“the tried and tested”.
www.veredus.co.uk
The Solution
Is there a solution to this triple whammy of risk averse Appointment Panels, lack of willing or able, established NHS DoFs to move post and the loss of
rising stars for NHSTrusts?The Labour Government between 1997-2010 expended considerable effort to create closer links and collaboration between
the NHS and the private sector. This was both structural (e.g. Foundation Trusts, development of PFI) and softer initiatives such as significant clinical
overseas recruitment drives. However, at a senior management level this was largely unsuccessful, evidenced by continuing low number of DoFs with
board level private sector backgrounds.
The Executive Search industry can have a positive impact on this dilemma. A comprehensive and robust search can secure candidates who, from this
analysis, would seem difficult to identify or to successfully appoint. The fact that there are DoFs from the private sector within the NHS demonstrates
that candidate motivation is not necessarily solely financial and thatTrusts can be open to appointments outside of the NHS. In my view, the continuing
increasing scale and complexity of NHSTrusts and the potential political pitfalls of further increasing rates of pay will result in the current appointment
trends continuing. However, in our recent DoF searches, we have been able to attract strong fields with a variety of public and private sector
backgrounds and expect to be able to continue doing so.
David Rason
David is a researcher in the Healthcare Practice. Since joining Veredus he has delivered a broad range of
executive board roles covering professional areas such as HR, Finance, Operations and Senior Clinical
Appointments within the healthcare sector. He has developed specific expertise in supporting the recruitment
of Finance Directors. Veredus assessed the career profiles of DoFs within all provider NHS Trusts in England.
8% were identified to have previously worked within the private sector at board level. This excludes profes-
sional interim DoFs but does include DoFs “acting up.” Bold and Old,’ Annette Sergeant, 2009 pg 4-5 Veredus
assessed the career profiles of CEOs within all provider NHS trusts in England. 15% were identified as having
previously been a Director of Finance. This excludes professional interim CEOs but does include DoFs “acting
up” into the role of CEO. ‘Milburn's overseas recruitment drive’ 7 November, 2001,
http://news.bbc.co.uk/1/hi/health/1641483.stm
To discuss your recruitment requirements, please contact David Rason on:
4 ‘Milburn's overseas recruitment drive’ 7 November, 2001, http://news.bbc.co.uk/1/hi/health/1641483.stm
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