Today, I interviewed my colleague Mary Driscoll, APQC’s financial management senior research fellow, to get her perspectives on the state of entry-level management accounting and finance talent. APQC and IMA® (Institute of Management Accountants) recently completed a survey on this topic. Mary and I partnered on this research and I’ve been eager to get her take on the results. To learn more, listen to the recording of APQC’s webinar, The Management Accounting & Finance Talent Crisis - How to Act Now hosted by Mary and I on May 20, 2015.
What is entry-level finance and accounting talent?
The definition from our study is that entry-level finance and accounting people are bachelor degree holders with less than three years of work experience.
Why is entry-level finance and accounting talent an important topic?
The pipeline for these people has really thinned out for a number of reasons, which we can go into, but the immediate consequences on businesses and large organizations are pretty deep. For starters, there are widespread hiring challenges. So nearly all organizations in the survey that we conducted face challenges in hiring accounting and finance talent; including the shortage of qualified candidates in local labor markets. So, it’s taking them longer to get the right people in.
Our survey respondents also believe a big challenge is attracting qualified graduates to this field which is perceived to lack a defined career path. People coming out of schools today tend to think of accounting as a dead- end road. The younger generations coming out of school today want excitement and opportunity to innovate. This generation of graduates likes to be very independent, solve problems, and rise quickly. Accounting is not seen as a career path that provides those things.
So, what is the negative business impact? The consequences of this hiring challenge—some would call it a crisis—are increased spending, reduced productivity, and diminished work quality.
What is your perspective on the research finding that the vast majority of organizations, as you talked about, are having a hard time hiring entry-level finance and accounting people?
In speaking with executive recruiters who focus in finance as well as with senior finance people, one thing occurs to me (and this is at the 80,000 foot level): CFOs don’t realize they have a problem. Here, I’m talking about CFOs of very large organizations who may have easily 5,000 or more employees globally who work in finance and accounting. CFOs of billion dollar companies are pretty far removed from the strategies that the front lines of the business use to bring in entry-level accounting people.
In fact, we found in our research that eight out of ten organizations report they very much need people who can think strategically and execute a strategic plan. However, only three out of ten respondents said their entry-level finance and accounting employees come to them with the ability to think strategically and support the execution of a strategic plan. I think this jumped out as the biggest problem in our research. What organizations need is people they can bring in and train to be performance catalysts. That’s what they need, not what they’re getting. There’s a real gap.
What’s behind this? Traditionally, entry-level accounting people have been characterized, in my mind, as people who can run calculations while listening to their iPods. The idea was that—and I’ve seen this— accounting people have the radio on and they whizz through calculations at an amazing speed. That’s what they’ve traditionally been asked to do. You know, process that paperwork as fast as you can, and don’t stop and question. When you stop and question and want to peel things apart, and think strategically, that slows things down and hurts productivity.
So, I think the whole notion of what entry-level is needs reconsideration in the sense that not all finance posts are interchangeable. Yes, you need those human calculators. You really do need them. On the other hand, you need really edgy talent that can be groomed on the thinking and questioning track; people who are born curious and not afraid to be nosy about shattering long-held assumptions. You need people who are not afraid to speak up in a meeting of business people and question assumptions, say for instance, what part of the cost structure needs attention. So, the whizz-bang calculators, and the whizz-bang investigators are two different personality types, two types of talent. So, organizations really have to think carefully about their strategy for bringing in entry-level people.
Finally, HR managers need to work with finance managers on issues such as how to manage millennials who by nature want to solve problems on their own without slowing down long enough to grasp the nuances of the instructions they receive from more senior managers. In finance, that’s really important because the issue of legal stewardship is paramount. For example, the incoming talent has to be willing to be indoctrinated to the notion that there are very rigorous rules that are required to keep the company legal. That’s why we have regulations like Sarbanes-Oxley that have to be followed to the letter. There’s no cutting corners, and this can be a tricky cultural shift for young, intelligent millennials.
Hear more of Mary’s insights on the research findings in the recording of APQC’s Management Accounting & Finance Crisis webinar. (This webinar was approved for 1 general recertification credit hour toward PHR, SPHR, and GPHR recertification through the HR Certification Institute.)
Learn more about IMA’s Competency Crisis™ initiative: http://competencycrisis.org/.
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