In the U.S. and around the world, organizations both large and small are experiencing a competency crisis – an insufficient pool of entry-level management accounting and finance talent. Industry leaders are concerned about technical skills gaps as well as an increasing need for finance and accounting talent to have more soft skills. These are findings of a new survey conducted by APQC and IMA (Institute of Management Accountants) as part of IMA’s Competency Crisis initiative. Professionals working in the finance and HR/recruitment functions were surveyed on the state of entry-level management accounting and finance talent. Our conclusions based on the survey results include the following.
- Organizations have elevated and expanded the skill requirements for entry-level finance positions. For example, the survey results indicate that entry-level finance professionals need leadership capabilities from day one in the workforce. Historically, leadership capabilities were expected to be developed throughout one’s career. However, leadership is the only competency that made both the survey’s most needed and least possessed competency lists.
- Finance functions are at risk of experiencing unwanted employee turnover. Unfilled positions are adding to the workloads of finance employees. Taking on the tasks of unfilled finance roles is making it difficult for early- and mid-career finance employees to develop professionally. At the same time, finance functions are reluctant to promote early- and mid-career talent anticipating that the vacated roles would be difficult to fill.
- There is a lack of strategic, as opposed to tactical, HR involvement with the finance function. This limits the ability of finance leaders to fully appreciate the magnitude of the competency crisis and its consequences, as well as the ability of finance leaders to identify and implement effective solutions.
- Resolving the competency crisis will require partnerships—between organizations and educational institutions as well as between finance and HR.
- Developing career paths for management accounting and finance employees is the most promising intervention. Career paths would entice more students to prepare for management accounting and finance roles. In addition, career paths would help organizations retain the management accounting and finance professionals they already employ.