The Biggest Leadership Hiring Challenges in Finance, Europe — 2025

As 2025 progresses, finance firms across Europe are facing a set of distinct challenges when it comes to hiring leaders. Regulatory complexity, digital transformation, geopolitical pressures, and shifting candidate expectations are reshaping what successful leadership hiring looks like. Below are the key challenges so far this year, grounded in recent market facts.

1. Deepening Skills & Digital Competency Gaps

Finance functions in Europe are under rising pressure to evolve quickly: AI, automation, ESG, and sustainability reporting are no longer fringe concerns but core requirements. Yet many firms struggle to find leaders who are technically fluent and strategically capable.

• According to a survey by IMD, regions like the EU are contending with an ageing workforce and skill shortages as technology advances outpace local talent supply. (imd.org)
• In “The Future of Finance: Key Trends & Workforce Challenges in 2025” (ManpowerGroup), there is significant concern about digital skills gaps—particularly in analytics, AI, regulatory tech—and firms needing to hire rather than train from scratch. (manpowergroup.co.uk)

This gap is particularly problematic for finance leadership roles that need to straddle finance, technology, risk, and compliance.

2. Sluggish Succession Planning & Thin Pipelines

Many European finance organisations are finding that their internal pipeline of leadership talent is insufficient. Whether due to retirements, migration of talent, or misalignment of development, the result is that urgent external hires are needed — often with little lead time.

• In Europe, CFO surveys show that while some firms plan hiring, others (especially in Germany and Austria) are bracing for reductions – not just lateral moves. (deloitte.com)
• Additionally, hiring senior or C-suite level roles is increasingly cross-border. The Executive Search Market Update (Q2 2025) reports that 38% of all retained executive assignments in Europe now involve cross-border searches—up from ~31% in 2023. (cjpi.com)

When internal candidates are not ready, firms lose time, money, and risk poor cultural or leadership mismatches.

3. Elevated Candidate Expectations & Cultural Nuance

Senior finance leaders in Europe aren’t just looking for pay. They expect clear strategic mandate, purpose, strong ESG credentials, values alignment, flexibility (remote/hybrid), and clarity of role. Firms that fall short in these areas risk losing finalists.

• Cedar Recruitment’s “Salary Trends … 2025” report notes that 41% of finance/procurement/tax/change professionals report that what employers offer fails to meet their expectations—often citing pay, role clarity, or work-life balance. (cedarrecruitment.com)
• Flexible working is no longer a perk; many leaders expect it. In London especially, hiring trends show that IT roles, leadership/executive management roles, and digital transformation roles are growing, and firms are being judged on their flexibility and modern working arrangements. (morganmckinley.com)

For leadership hiring, this means the “offer” must include more than just salary.

4. Time, Process & Decision Bottlenecks

In finance especially, leadership hires often involve many stakeholders (board, risk, compliance, audit, technology). Regulatory and governance checks add time. When the market is fast, these bottlenecks are increasingly a disadvantage.

• ManpowerGroup’s outlook for Europe (EMEA region) shows hiring expectations remain among the lowest in their surveys; confidence is fragile. (manpowergroup.com)
• “Why Hiring Takes So Long in FinTech and Financial Services – 2025 Update” emphasises that employers are less willing to hire someone with “close enough” skills; they want people who can hit the ground running. That means very selective processes which take longer. (linkedin.com)

When “time to hire” stretches, top candidates often accept other offers or lose momentum.

5. Regulatory, Geopolitical & Cost Uncertainty

Finance leadership roles are deeply impacted by external risk: economic slowdowns, inflation, regulatory changes (e.g., ESG, digital compliance, cross-border rules), and political uncertainty all raise the stakes. Boards are more risk-averse, making hiring decisions more conservative or slow.

• Deloitte’s European CFO Survey (Autumn 2024) shows that only about 30% of European CFOs report that their firms plan to hire more workers, with many expecting payroll stability or cuts especially in Germany & Austria. (deloitte.com)
• Goldman Sachs has increased its EU staffing by 16% year-on-year into mid-2025, though the rising cost of compensation is notable: compensation costs rose 11% to €424 million in the first half of 2025 for its EU operations. This reflects both aggressive hiring in some institutions and increased cost of attracting talent. (fnlondon.com)

So even where demand is there, organisations must budget carefully, understand the regulatory environment, and be prepared for slower or more cautious progression.

What Finance Organisations in Europe Are Doing Right

A number of finance organisations are getting traction by changing their approach to leadership hiring.

First, they are investing in leadership development well before roles become vacant. By identifying high-potential internal talent and exposing them to cross-functional, digital, risk, and ESG responsibilities, they are building stronger pipelines and reducing dependence on emergency external hires.

Second, they are broadening the offer beyond money. This includes articulating the influence of the role, clarity of mandate, cultural strengths, ESG commitments, hybrid working policies, and personal growth opportunities. These factors increasingly tip the balance in candidate decision-making.

Third, leading firms are streamlining their processes. They are cutting redundant interview steps, aligning stakeholders early, and in some cases appointing interim leaders to bridge while more comprehensive searches conclude. This reduces the risk of losing talent to competitor offers.

Fourth, they are strengthening the employer value proposition (EVP). Transparency on salary bands, responsiveness throughout the process, and an interview experience that authentically reflects the culture all help to attract and retain top leadership candidates.

Finally, some firms are looking cross-border or embracing hybrid leadership models to overcome local shortages. By widening the pool to pan-European or international candidates, and supporting relocation or remote leadership, they are addressing gaps more effectively.

Outlook & Imperatives for the Rest of 2025 (Finance, Europe)

• Leadership hiring should be treated as strategic risk management, especially in finance: gaps in leadership have outsized costs.
• Firms should invest in upskilling (digital, data analytics, AI), especially for those in finance functions, and build rotational programmes so people gain exposure to risk/compliance/ESG.
• Boards and senior leadership need to be aligned on what they expect from new finance leaders: not just financial acumen, but also ability to manage technology, regulation, ESG and disruption.
• Process design matters: transparent, efficient, and clear, while still meeting governance and regulatory requirements.
• Compensation and benefits must reflect market realities, but non-financial motivators are becoming just as important.
• Diversity and inclusion remain essential: broader backgrounds bring the resilience and creativity needed in uncertain markets.

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