Beyond Undergrad Degrees: Professional Certifications Can Be Differentiators
Prior to the COVID-19 pandemic, nearly 70 percent of CEOs cited talent acquisition strategies as one of their greatest on-the-job challenges, with pre-hire selection often the most significant struggle. Advances in technology have transformed roles across organizations, creating skills gaps that further complicate hiring.
In addition, more students are attending four-year universities and saturating the job market, resulting in a 9 percent decline in median earnings for young adults with a Bachelor’s degree since 2000. This stagnation in earnings, coupled with the issue of finding high-quality talent plaguing CEOs and Human Resources executives, indicates that undergraduate degrees need to be supplemented.
Professional certifications can be a powerful sorting mechanism for hiring managers. Certification proves that candidates have the skill set employers require and serves as assurance that a given certified professional can assume the responsibilities of a particular position. Labor trends reflect this notion: The unemployment rate for certified professionals is lower than that for uncertified or licensed professionals from ages 16 to 54. As such, employers should be encouraged to seek out certifications in potential employees. Likewise, university students can increase their chances of getting a higher-paying job if they have passed a professional certification exam.
Certifications Are Flexible to Industry Trends
In industries undergoing rapid change, it is incumbent on employers to support the value of different forms of education. On-demand customized training and online certificate programs are helpful, and so, too, are professional certification programs. These programs are closely attuned to the job functions and daily responsibilities of the profession and have a good pulse on its future direction. Professional certification exams are readily adaptable to industry trends.
For example, as the finance and accounting function has been impacted by changing technology and shifting roles and responsibilities, IMA (Institute of Management Accountants) found in its most recent Job Analysis study that management accountants would be best served by attaining proficiency in the areas that are becoming increasingly prominent: technology, data analytics, and ethics. Given this, IMA recently revised its CMA (Certified Management Accountant) exam in 2020 to better emphasize technology, data analytics, and ethics skills that match current needs in jobs.
Encouragement of Certifications Leads to Results
Favoring certified professionals in the hiring process is not just a short-term fix to hiring challenges, however. In addition to assurance that new hires will be competent and skilled in their new positions, professional certifications bring considerable value to an organization, especially within the finance and accounting function.
Research shows that an organization’s encouragement and incentivization of professional certification is positively correlated with the effectiveness of that organization’s finance and accounting function. There is reason to believe this effect extends to other departments within a company, as the versatility of skills—not exclusive to certified finance and accounting professionals—is a central reason for this improved performance.
Certifications Help With Retention, Not Just Hiring
Professional certifications are not just solutions for finding talent from the expanding pool of recent university graduates. They are valuable for retaining current, more experienced talent who perhaps received their education before today’s business climate took shape.
This is consistent with a recent survey of more than 1,000 finance and accounting professionals, which found that the most effective training option for preparing employees for the changing business environment is professional certification. For workers whose professions have undergone change in the years since their initial education and training, a professional certification serves as a dependable and rewarding alternative.
Each of these figures and observations points to the need for employers to encourage, and even incentivize, professional certifications among their employees. With a push from business leaders, their companies will be staffed with talent who have the skills needed to manage through a business environment that often promises change, ambiguity, and technological disruption.
Professional certifications are a key component for employers to consider when both hiring and retaining talent. As evidenced by the lower unemployment rates and higher earnings, certifications provide a firewall against irrelevance for professionals, and a safeguard against talent acquisition struggles and skills gaps.
Dennis Whitney, CMA, CFM, CAE, is senior vice president of Certifications, Exams, and Content Integration at ICMA (Institute of Certified Management Accountants).