Closing the Skills Gap by Investing in Employees

The rising demand for finance and accounting professionals with relevant skills is making it more likely for companies to provide compensation and other resources for employees to pursue professional certifications.

Organizations are under increasing pressure to improve competitiveness and performance, which is expanding the responsibilities of accounting and finance professionals beyond what they have been in the past. However, many organizations have found the skills of employees aren’t keeping up, creating gaps in the skills needed in finance and accounting departments to drive value while protecting the public interest.

This issue is not new. The Manpower Group’s annual Talent Shortage Survey identifies which employers are having difficulty finding the right talent, which jobs are the hardest to fill, and where job seekers will find the most opportunity. Since 2011, accounting and finance has ranked within the Top 10 hardest jobs to fill within the U.S. Globally, the profession landed in the Top 10 list for the last two consecutive years.

Recognizing the extensiveness of the skills gap within the accounting and finance profession is only one piece of a rather complicated puzzle. Before offering viable and realistic solutions, companies must first understand the challenges that have created, and continue to perpetuate, the chasm between the skills professionals have, and the talent employers need to generate sustainable growth in an environment of extreme competitiveness, innovation, consolidation, and commoditization.

Understanding the Issues

Entry-level employees: For entry-level employees and young professionals, challenges stem from academia and technology. The accounting curricula at many colleges and universities struggle to keep pace with changes in industry, for example, in the areas of prescriptive data analytics, technology enablement, and insight skills. As a result, a widening effect occurs between what is taught in the classroom, and what key skills are needed in an entry-level job. Advancements in technology further exacerbate this challenge. Customers and consumers increasingly are doing business within the digital space, and the profession has responded by automating rote accounting processes. Basic accounting functions that were once fundamental to entry-level jobs now are performed by computer automation and potentially robots in the future. The bar for entry-level work in accounting and finance is higher now and will continue to rise in the future. No longer will entry-level professionals be able to “cut their teeth” and develop their skills at routine learning tasks—they will need to fast forward into advanced analytics, insight, and value creation skills.

Seasoned employees: Though they may have several years of experience working in accounting and finance, seasoned employees are not exempt from skills gap challenges, especially as technology replaces higher-order human thinking skills (e.g., machine learning). As the profession evolves from “bean counting to bean sprouting,” accounting and finance employees now are being identified as high-potential strategic advisors offering valuable insight to increase efficiencies and enhance business value. The days of accountants working solely as “number crunchers” essentially have disappeared or at least dissipated. Experienced employees may find that the current skills they possess are not enough to succeed long-term, especially for strategic leadership roles and the C-suite.

Job market outlook
All management accountants will encounter challenges related to the skills gap in the form of increased competition for jobs. The U.S. Bureau of Labor Statistics (BLS) estimates that the accounting profession will experience double-digit job growth through 2024. Currently, there are approximately 1.3 million accountants and auditors in the U.S. and many more worldwide, and the majority of these professionals—approximately 75 percent—work in management accounting and academic roles. The writing is on the wall: The accounting and finance profession, specifically management accounting, is becoming more popular, and—by extension—more competitive. The talent gap will leave recruiters and hiring managers scrambling to fill these highly specialized positions.

How Do We Solve This Problem?

Support employee education: In recognition of the consequences of the skills gap in accounting and finance, many organizations are providing their employees with compensation and support to continue their education. According to a recent poll by Robert Half, a leading Human Resource consulting and staffing firm, 72 percent of CFOs said their companies cover some or all of the cost for their staff to obtain certifications. Additionally, 76 percent also claimed that their organization helps employees maintain their earned credential.

The reason employers have increased support and spending in continuing education, training programs, and professional certification for employees is because they recognize that the investment is ultimately to their benefit. It’s advantageous for businesses to employ highly skilled and well-educated workers.

Certification programs: Rigorous certifications, such as the CMA (Certified Management Accountant), validate mastery of in-demand core competencies that add organizational value in the areas of financial planning and analysis, data analytics, risk and opportunity management, and more. The CMA’s two-part exam covers 11 critical skills, including ethics, that accounting and finance professionals need to successfully advance their careers from basic transactional functions into more strategic advisory roles within their organization. Once an individual meets all the requirements and passes the exam, he or she also must maintain the certification by fulfilling yearly continuing professional education requirements that ensure he or she stays in lockstep with a constantly evolving business landscape.

Recruitment and Retention

Attracting talent: Companies also can leverage support for certifications and professional development as a recruitment tool. It’s no secret that offering continuing professional development opportunities as an employee benefit is an effective way to attract top talent. While there is an initial financial investment, the advantage for employers is better retention, increased competence and relevance, and motivated employees who have obtained the differentiated skills needed to add business value to the organization.

Retaining top talent: Simply stated, you get what you pay for. A joint study conducted by the American Productivity and Quality Center (APQC) and the Institute of Management Accountants (IMA) revealed that encouraging employees to complete training signals that the employer is invested in them for the long term. This encourages employees to work harder and smarter because they feel appreciated by and enmeshed within the organization and, thus, are less likely to look elsewhere to advance their careers.

The Bottom Line

The talent gap is a complex issue. And for the accounting and finance profession, the challenges stemming from it continue to frustrate both employers and employees. As a result, the rising demand for finance and accounting professionals with relevant skills is making it more likely for companies to provide compensation and other resources for employees to pursue professional certifications. Indeed, certifications such as the CMA help both employers and employees stay ahead of the competition and generate sustained, differentiated value to stakeholders.

Jeff Thomson, CMA, CAE, is president and CEO of IMA (Institute of Management Accountants).

 

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