Heartland Financial in Dubuque, Iowa, has named David Horstmann, 63, as its new interim chief financial officer. As a veteran executive, Horstmann has the experience and expertise needed to succeed exiting CFO John Schmidt. Schmidt is expected to leave Heartland Financial in July for a new position in the manufacturing sector.
Horstmann’s promotion to interim CFO is an internal one, as Horstmann joined Heartland Financial in 2004. Prior to joining the $5 billion-asset company, Horstmann has held numerous finance positions throughout his 23-year career, giving him the necessary experience to serve in his new position. Though Heartland Financial has previously announced that Horstmann would succeed Schmidt, the company recently announced the shift for a second time in order to boost investor and consumer confidence.
To Promote From Within or Hire From Outside?
By naming David Horstmann as its interim CFO, Heartland Financial has reminded us that the CFO is truly the heart of any organization. While it’s yet unknown who the new long-term CFO will ultimately be, Heartland’s decision to temporarily promote from within highlights the importance of the CFO’s role.
Whether it’s the CFO or another executive position, companies everywhere must consider whether they should promote from within or hire from the outside. Though a candidate’s qualifications, experience, and alignment with company culture and values should ultimately determine who is hired, research increasingly suggests that promoting from within provides major benefits for companies everywhere.
The Wall Street Journal released a study detailing the benefits of promoting from within as opposed to hiring from the outside. These benefits include:
- Better performance. According to the research, external hires were 61% more likely to be fired and had lower performance scores during their first two years than inside hires.
- Company loyalty. Because inside hires are already familiar with company culture and dedicated to the company’s goals, promoting from within allows employees to hit the ground running on their first day.
- Saved resources. Hiring from outside can incurs costs that may slow a company down.
Though David Horstmann may not be named the long-term CFO, Heartland Financial’s decision to promote him to interim CFO suggests that the company prizes company culture and values. We’ll know more when a permanent CFO is named.