How Construction Companies Are Replacing CFO Turnover with Team-Based Financial Leadership

In today’s construction industry, uncertainty is a constant. Volatile material costs, protracted billing cycles and razor-thin margins place significant strain on management teams. For many mid-sized subcontractors and GC’s, an emerging challenge is a revolving door in financial leadership – high turnover in the CFO role is creating a dangerous blind spot.

Research shows that 34% of mid-market CFOs are expected to leave their positions by 2025. Meanwhile, CEO turnover in construction surged 56% in 2024, and nearly one in five construction workers is over 55, further stressing the leadership pipeline. Beyond these numbers, the demands on CFOs are intensifying, with greater pressure for specialized expertise in job costing, compliance and financing strategy.

In response, a growing number of construction companies are pivoting away from the traditional full-time CFO model and embracing fractional financial leadership. This approach provides experienced, strategic oversight on a flexible basis, delivering much of the insight and stability of a full-time CFO without the cost or disruption that often comes with turnover.

The High Cost of Full-Time CFOs and Their Departure

For many construction firms, hiring a full-time CFO entails an annual cost exceeding $250,000 when factoring in salary, bonuses, benefits and onboarding. However, the cost of turnover is even higher. When a CFO departs mid-project, critical functions like forecasting, cash flow management, and vendor negotiations can stall, creating operational and financial setbacks.

Fractional CFOs fill this gap. They work part-time or on a fixed fee basis, offering targeted financial leadership that is both affordable and agile. Their flexible engagement allows companies to access high-level expertise without locking in a long-term executive who may not fit the company’s evolving needs.

A Team-Based Approach to Mitigate “Key Person Risk”

One of the critical risks with both full-time CFO hires and solo fractional contractors is “key person risk.” When a single individual leaves, companies can be left scrambling to replace that expertise, leading to disruptions that may affect everything from cash flow to vendor relationships.

At Sutker Moran, we offer one example of how firms can address this challenge through our W2 Full-Coverage CFO model. Rather than deploying a lone consultant on a 1099 basis, we provide a dedicated team tailored to each client’s specific needs, typically a three-person unit consisting of a Managing Director (CFO-level advisor), a Director (Controller-level expert) and a Staff Associate (analyst-level support). All are full-time W2 Sutker Moran employees, which protects clients from disruption due to turnover and ensures consistent institutional knowledge and continuity. In our experience, this approach has led to 75% of our interim clients transitioning into long-term partnerships.

Scalability: Adapting as the Business Grows

Beyond mitigating key person risk, a significant advantage of a team-based fractional CFO model is scalability. Construction firms often experience rapid changes in project volume and complexity. A fractional CFO model that is too rigid may struggle to meet these shifting demands.

Because our teams are tailored to a client’s operational and strategic needs, the model can seamlessly scale as the business evolves. A lean three-person unit can expand by adding analysts, controller-level talent, or specialists in project finance, without the disruption inherent in rehiring or reconfiguring internal structures. This flexibility can be a decisive advantage as firms transition from steady-state to rapid growth, an agility that solo contractors or traditional full-time hires may not match.

A Real-World Example

Take the case of a $100 million multi-entity construction company that approached us in 2023 amid persistent financial instability. The firm had experienced its fourth Controller transition in just two years. Complicating matters was a stalled general ledger upgrade, which left financial statements unreliable and the leadership team frustrated.

We engaged as the firm’s fractional CFO/Controller, offering full-coverage services at a significantly lower cost than a full-time hire. Within weeks, our team reconciled every balance sheet account and implemented a structured monthly close process that had been absent for over a year. We then reengineered their individual job projection process to align accounting and financial reporting with Operations. Today, our CFO team remains embedded in the client’s operations, challenging project managers on cost overruns, optimizing decision-making and driving accountability across the organization.

Why Construction Is Especially Suited for Fractional CFOs

The construction industry presents a uniquely demanding financial environment, one that makes traditional CFO models harder to sustain and fractional CFOs an ideal solution.

Unlike other sectors, construction firms manage financials on a per-project basis. Each job functions like a standalone business, requiring accurate forecasting, job costing, and cash management at a granular level. With billing often lagging behind work completed, the strain on working capital can be immense. Add in unpredictable material pricing, complex bonding and compliance obligations, and coordination across subcontractors, the pressure on financial leadership becomes intense.

These conditions make construction firms especially vulnerable to gaps in financial oversight. A delay in identifying cost overruns or an error in WIP reporting can lead to cascading cash flow issues and compromised client relationships. Fractional CFOs — especially those who work as part of a coordinated team — can plug these gaps with real-time financial insights and discipline that many firms simply cannot maintain with internal resources alone.

Additionally, construction companies often grow in bursts, landing new contracts or entering new geographies in rapid succession. Fractional teams can scale up quickly, adding capacity and specialized knowledge (such as project finance or multi-entity consolidation) without requiring the firm to take on the fixed cost of permanent hires.

The Broader Shift in Financial Leadership

The rise of fractional CFO models reflects a broader shift in financial leadership across industries, driven by growing complexity and talent shortages. While construction firms are at the forefront due to their unique challenges, more organizations are embracing flexible, embedded financial leadership. Sutker Moran’s W2 model exemplifies how this approach can evolve into a scalable, resilient solution for navigating today’s volatile environment.