Many accounting and finance organizations are facing challenges, especially around recruiting and retaining skilled talent for their teams.
The Benchmarking the Accounting & Finance Function 2017 report produced by Financial Executives Research Foundation (FERF) and Robert Half examines workforce management trends, and reports on how companies and their finance leaders are handling the daily operations of the accounting and finance function. Other topic areas include trends in outsourcing, cloud technology adoption, automation, and the burden of compliance demands.
To discuss the report’s findings, FEI Daily spoke with Paul McDonald, Senior Executive Director at Robert Half.
FEI Daily: What are some of the factors causing finance talent shortages for companies today?
Paul McDonald: The most important factor is supply and demand. We’re being driven by compliance and regulation, and by a desire to mix accounting, finance, and technology skills into one person. We’re seeing the impact of that — people are trained in different aspects, but not enough are trained in the right areas.
When you see 4.5 percent or a 5 percent unemployment rate in the United States, you back up and say, “What’s the unemployment rate for a senior financial analyst who knows ERP implementation and the latest cloud computing technology?” If I add to that, “I need a CPA who’s worked in public and has worked in private,” you’re talking about a population of people with those characteristics that just keeps going down. We’re finding that, in a world of specialization, people with certain skills as well as a broad-based finance background are in very high demand.
FEI Daily: How acute is the challenge?
McDonald: When you look at our survey, the key trend for me was that 62 percent of the largest organizations, those over $5 billion, report that their accounting and finance teams are at least somewhat understaffed. To me, this is not new. Corporations in North America have to find a way to staff up. That can mean promoting people earlier, taking chances when it comes to hiring, having better training programs, and training people up.
That’s what some of the companies that we’re working with are doing — focusing on hiring good raw talent. Businesses aren’t sacrificing their hiring standards, but they might look and say, “Okay, that person’s got 80 percent of what I need. How am I going to push him or her up to 100 percent? What changes could I make? Do they have the soft skills and lack a little bit on the technical side? Can I train to their weakness?” It’s easier to train to the technical than it is to the soft skills.
FEI Daily: While that’s going on, how are companies are trying to deal with their day-to-day staffing issues?
McDonald: It depends what functional role you’re talking about, but there’s a number of strategies we’re seeing. For internal audit, for example, we’re seeing rotational assignments where companies take operational people and teach them internal audit because they know the business. If they have the good non-technical skills, business acumen and intuitive curiosity, they can make good internal auditors.
On the accounting side, one approach that comes to mind is bringing back retirees on a project or contract basis. That can be a very effective way to access great human and intellectual capital. Companies are also bringing in consultants or temporaries on a long-term basis. There are many people looking for that way of life who want to be permanent temporaries.
We’re also seeing companies divide the function they’re looking to fill into two parts and maybe promoting somebody earlier in their career, but not giving them the whole position. If you’re used to having one job description being filled by one person, how can you bifurcate that role and divide it in two or three, then give it to some of your high-potential employees and help them move ahead more swiftly? And by the way, people love that because they get the early promotion with more responsibility, and you might have a star in the making.
The way you identify some of those people is, don’t only look at their technical abilities. Look and say, “If I give them this, do they have the soft skills or the non-technical skills to pull it off?”
FEI Daily: Are there other ways the talent challenge has evolved over the past five to 10 years?
McDonald: Number one, the speed of change has increased. Ten years ago, we had the beginning of the downturn, but absent that, business needs have changed. We’ve had cloud computing take on a larger role, albeit not as large a role in our survey as I would have thought. The technology needs of the business, the changing economic environment driving the demand for talent, and the complexity of business are all changing quickly — along with the need for rapid speed to market.
If you have a product or a service, you have to think about, as a finance and accounting person, how are we accounting for these expenses? How are we accounting for the business? Along with that, to really add value to your department, you have to address forecasting, as well as annual planning and strategic planning. Those are more at the forefront today and I’m finding that more finance and accounting individuals are being asked, earlier in their career, to get involved with those aspects.
FEI Daily: How does technology affect staffing issues?
McDonald: I was surprised somewhat to see that individuals are still doing things manually or through spreadsheets so much. To me, that was an area that I expected a little more change this year, because there are so many tools that are available today for account reconciliation, or forecasting and planning. There are great tools that are only getting better.
My take-away is, I would encourage readers of the report to look at their roles and processes to see what efficiencies can be gained through investments in cloud computing or tools to automate some of their manual processes. The controls around cloud computing have gotten so much better, and the security of data centers has gotten better as well.
Security is a legitimate concern, because anybody can be hacked today. It doesn’t matter if your data’s in a data center or behind your own firewall. Look at who’s going to monitor your data as well as the benefits of automating for efficiency and cost.
FEI Daily: Are there challenges companies tend to face as they consider automation?
McDonald: It depends on the size of the organization and the complexity of the organization. Some people are resistant to change. Some companies and CFOs don’t trust things outside of their own firewall. Then there’s the cost. Do you have a good cost analysis looking at return on investment?
Another factor can be inertia. If you’ve been doing something for 20 years the same way, and this goes for any finance or accounting function, or IT — if your company’s large enough, there may be so many reports, and so many iterations of customization, that people don’t read them. Do you have time to read those reports? How are you measuring your business? What are the key metrics? Do the regulators need certain reports? These are the must-haves. Identify them and see if there’s a vendor or tool that can help you meet that.
There’s a perception that implementing automation can be a hassle, but I’ve also heard from a number of executives that “yes, it was six months of pain but once we got it right, we never thought it would be this good.”
FEI Daily: Are there other functions that are going through similar talent challenges?
McDonald: When you look at the marketing and creative field and marry that with the technology field, there’s a shortage of people who design the front-end user experience of a website. And because everything’s been going to mobile for the past few years, mobile applications developers or mobile web designers are in high demand.
When you look at back-end application development, there’s a huge shortage there. Another challenge is data analytics and data scientists. Those individuals are in such high demand.
I was speaking to a $400-million company that’s web-based and, for the most part, mobile-based. They saw this trend about two years ago and they hired five data scientists. They were paid back in the investment for those data scientists handsomely because they understood the behaviors. With the predictive behavior you get from your data, you can expand your business and provide new services.
It’s almost a subset of accounting or finance people. I’m finding these data scientists and data analytics people are coming from all these areas I mentioned — accounting and finance, technology, and some creative and marketing people that understand mobile optimization and customer behavior, and they know how to read the tea leaves, if you will.
Collectively, the employee today that’s going to be successful has to be extremely collaborative, and more so early on in their career than before. Because technology is doing so much for us, and identifying the predictive nature of behavior, people have to be collaborative to understand that behavior and apply insights.
FEI Daily: How are employers working to blend or retain staffers from different generations?
McDonald: When you think of the different generations that are involved in business today — that could be Boomers, Generation X, and the Millennial generation — and they see things differently. I think the Boomers are used to change at a certain pace, while the Millennials are comfortable with change at a rapid pace. They were born into this, and it’s second nature to them.
It’s incumbent upon management, if management is in Generation X or Y, or Boomer, to embrace this change and help the workforce move with the change.
What I’m hearing is, the Millennial generation thinks some of us in leadership are slow to change. That’s one of the reasons they leave you. So, identify that early on, embrace the change, and be a leader in that area. Don’t wait for the Millennials to tell you things are changing, because they won’t tell you. They’ll just leave you.
If you break down the barriers, any size company can recruit from any generation effectively. If you know your audience and you’ve been listening, you can put your recruiting plan together to attract the right person. It’s not just what the company can do for the employee — it’s about what we can do for you, as a person, and how can we work together?