Here is part two of the May 13 interview between Elissa Tucker and Mary Driscoll, APQC’s financial management senior research fellow, on her perspectives on the state of entry-level management accounting and finance talent. In part 1 one, Elissa and Mary discuss why organizationss have a hard time filling entry-level positions. In fall 2014, as part of the Competency CrisisTM initiative, APQC and IMA® (Institute of Management Accountants) surveyed professionals working in the finance and HR/recruitment functions on the thinking behind their entry-level finance recruitment programs. The upshot: regardless of location, organization workforce size, or job role, survey participants agree there is a growing competency problem. To learn more, register for APQC’s webinar, The Management Accounting & Finance Talent Crisis - How to Act Now hosted by Mary and Elissa on May 20 at 11:00 a.m. CDT. Everybody who signs up for the webinar will receive a link to the copy of the full research report at not cost.
What is the root cause of the gap between what organizations need in terms of entry-level finance and accounting talent and what is available to them in the market?
The research suggests that major business curriculums, at the bachelor level, are not keeping up with changing needs. For instance, does the accounting major really learn the real reasons why organizations need specialized software (not just Excel!) to deliver sound and reliable analysis of financial performance trends? Do finance and accounting majors graduate with an understanding of why overlapping and disparate systems prevent Finance from crafting trust-worthy analysis quickly? Again, do they understand what enables their work flows? Finance analysts have to rely on multiple systems throughout the organization to access core data, and that can be a real problem. Beyond that, do people graduate with a sense of why organizations can no longer rely on the annual budget as the primary performance management tool? They have to learn all these nuances of finance and accounting on the job, and that can take a very long time because you’re trying to learn context for what you’re doing while you’re also executing your assigned role in accounting operations.
Secondly, the APQC research found that deficiencies exist in both technical and non-technical areas. Organizations expect their incoming entry-level talent to be polished and able to handle themselves in meetings with tough-minded operating leaders. Those are diplomacy skills, and some would argue, those are skills you either have or you don’t – it’s in your nature or it’s not. But, organizations at the least expect their new talent to be good listeners and self-confident and able to “ask the better question” diplomatically.
Organizations today really want some of their new talent to have at least a basic working knowledge of capital markets and how and why companies access capital for various purposes. This is basic finance 101, and companies need people coming in to be articulate on these basic topics. They expect their graduates to understand regulatory regimes, such as what the SEC is, and also have a sense of how globalization may impact corporate finance. It’s arguable that people who have majored in finance, accounting, or business at Ivy League schools or top public universities or colleges will probably have a good handle on these topics. The conundrum is: organizations cannot afford to hire the Ivy League graduates for entry-level positions. If they want to bring someone in to start as a junior accounting clerk, they only want to pay the salaries of the state college graduates - for example, a starting salary of $40,000 at a mid-sized company. Moreover, the people coming out of the more elite schools are unlikely to be interested in low level accounting positions at a small or mid-sized company.
What are some of remedial actions organizations can take to address this issue?
One thing that human capital management leaders can do is to help the hiring managers within finance figure out is how to take a longer term view. For instance, each competency gap identified by our survey involves a skill that can be learned on campus and then refined on the job. As such, addressing these gaps might involve partnerships among universities, corporations, and/or professional organizations.
But this takes a commitment by senior management finance people – unfortunately, they often lack the sense of urgency and therefore the willingness to invest in finance talent development. So, a partnership between universities, organizations, and professional organizations could create a more seamless development of each competency.
Finally, the survey results suggest a lack of strategic, as opposed to tactical, HR involvement with the finance function. So the lack of HR influence may limit the ability of finance to appreciate the magnitude of Competency Crisis and identify and implement effective solutions. The survey results call out the need for finance professionals to partner with HR to learn about the finance labor market and most effective ways to find and attract entry-level talent.
Hear more of Mary’s insights on the research findings by registering for APQC’s Management Accounting & Finance Crisis webinar being held on May 20 at 11:00 a.m. CDT. (This webinar has been 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/.