The evolution of the workforce is becoming more complex and nowhere is it more evident than the current paradigm shift occurring in finance and accounting. How finance and accounting employees perceive their career path, i.e., what their knowledgebase should include, where they want to work, who they are, are all at the center of this shift. Professionals in today’s finance and accounting job market are quite a bit different from their predecessors. These professionals are required to focus their attention on skills that motivate, assemble and guide teamwork across an entire organization. To further complicate the paradigm, in the past five years the gig economy has become a major trend impacting the financial and accounting workforce, and has created a new multiplicity, with full-time permanent employees working side-by-side with freelancers.
The primary difference between possessing financial information and understanding financial data is that one builds consensus and influence, while the other motivates discussion on spotting opportunities in vast quantities of digital information. Overall, we’re looking beyond traditional finance and accounting skills and towards a combination of skills that includes: an understanding of marketing and or sales, with the ability to take this knowledge and apply it in a financial context identifying opportunity and risk. The new paradigm shift is guiding these individuals into finance teams and forming a union of financial talent with skills in technology to advance strategic goals.
What does this evolving workforce look like? Intuit’s Forecast predicts that 43 percent of the workforce will be freelancers by 2020, with 80 percent of large corporations currently planning to increase their use of a flexible workforce. Many organizations have already identified the gig economy and the importance of combining and teaming a unified workforce between freelance workers and fulltime employees to work on projects together. That said, the primary reason outperforming employers are benefiting from the blended workforce is more flexible teaming. More and more organizations are hiring on-demand financial professionals to resolve important functional and regulatory challenges. This trend cuts overhead cost for organizations by removing healthcare coverage, along with other employee benefits. Eventually, more freelancers and full-time finance and accounting professionals will need to work together but not necessarily in the same locations. The paradigm shift, where freelancers are working from remote locations verses corporate offices, creates the complexity of managing without borders and will become a critical management skill for directors and decision makers.
A new study published by the McKinsey Global Institute notes that individuals under the age of 25 make up 23 percent of the total freelance workforce in the U.S. A greater number, or 51 percent, are women, and approximately 1 in 10 or 8 percent are seniors over the age of 65. The consensus is that seniors are increasingly embracing gigs and short-term contracts to supplement their income. One advantage many older freelance workers have when they enter freelance platforms is expertise. They offer the employer deep rooted experience, but may lack the necessary technical skills required in today’s technological marketplace. Consequently, the blend of the two is essential in managing new hires/contractors in a financial and accounting sector where the Bureau of Labor Statistics reports the unemployment rate is 2.5 percent; about 2 percent below the national average.
The generational differences in the finance and accounting community don’t differ from the main stream; Gen Xers and Baby Boomers look for benefit plans because the influence came from their peers and family, not social media as we know it today. Millennials and GenZers see the world differently where the average Millennial/GenZers employee has different needs and wants in benefits. According to a blog series recent study, the benefits Millennials/GenZers values most are training and development, flexible time off, and cash bonuses. Healthcare came in the lower 10 percent tier of benefits required.
The hiring model for finance and accounting professionals is more complex when managing around the low unemployment rate and blending freelancers with full time employees. This perfect storm has created the “Talent Wars” which is driving employers to be creative in their hiring practices. Looking for the hidden gem requires setting aside normal hiring expectations which is a consequence of using the traditional job description to establish a ridged hiring profile. Although knowledge and skills matter, don’t overlook the potential of the candidate. Looking for that perfect employee can distract the hiring manager from hiring the right employee when motivation and personal characteristics are underestimated. Skills can be taught, but motivation and personal characteristics are attributes that people acquire over time.
Utilizing augmented hiring and staffing practices is the preferred hiring model for the future. The U.S. Department of Labor indicates there is currently a five year high in the ratio of temp workers to all employees. Additionally, organizations are discovering that not all situations require full-time, permanent employees. The new paradigm would include incorporating different types of workers from permanent to on-demand which provides teams exponentially more control while keeping the company flexible.
Most job descriptions are technically an employer wish list, causing many finance and accounting employers to stumble in their hiring practices. The job description should be a tool to qualify the candidate based on the minimal skill set and experience required. Afterwards, when interviewing a candidate, the hiring manager needs to be very clear about what they want, and what they can offer. This doesn’t mean the organization should oversell or over promise when speaking to candidates; they should prioritize what is most important and hire accordingly. We live in a social media world, and inaccuracies don’t stay quiet for long particularly once the person comes on board either as a freelance or permanent employee. Candidates deserve to hear what’s good, what’s not and what to avoid; and those that will thrive will be ready to tackle all three.
The idiom, “Keeping dead wood” is more applicable today in hire practices than ever. The need for speed along with the pressure to fill the position drives many to be quick to hire but slow to remove underperforming employees because they’re too busy and would rather avoid hard discussions. The new paradigm shift should lean toward a practice of hire slow and fire fast. One benefit of hire slow fire fast is that it prevents the organization from becoming bloated with unproductive workers. Also, keeping unproductive people will put a strain on the whole team. Teams need to foster trust and healthy competitiveness among all participants so that jobs are performed accurately and efficiently. This approach may sound harsh but it will empower a team, because you quickly removed the poor hire and avoided creating a sense of undervaluing good performers.
Understanding how the typical finance/accounting department is structured and managed is pivotal, because it’s very different today than it was 10 years ago. The hiring manager is not always in finance and accounting and may not have a B.S. in accounting. Consequently, a significant portion of these departments utilize people who know how to uncover patterns buried deep in data, and who understand software systems that can query large amounts of data. It’s similar to hiring an interpreter; data queries and regression analyses provide the content and talent translates and tells the story.
Nothing is permanent; the hiring paradigm shift comes as a direct result of the recession mentality that no job is for life. Most employees today are aware of the possibility that their position could be downsized or eliminated with technology. Consequently, employees are always on the lookout for new employment. As the workforce further evolves, candidates become more likely to shop around and find a job they really want, instead of constantly worrying about the economy and how their employment may be impacted. The tools candidates use to achieve connection as a society today drive career ambitions and come from various forms of social media usage. As an example, connecting professionally on LinkedIn is permitting candidates to explore a path to new employment opportunities 24/7. Equally, it makes it easier for employers to locate the talent they need.
Another significant paradigm shift in recruiting is the concept of the proactive candidate. These candidates consider and cultivate their next career opportunity a significant amount of time prior to making the actual career change. According to a study, 53 percent of employed workers are open to new job prospects while actively employed, and 73 percent of proactive candidates have engaged in job search activities within the last year while actively employed. Furthermore, 69 percent of all workers are searching for new opportunities whenever possible when they are online.
Finance and accounting professionals today want immediate feedback, a behavior they’ve adopted from the instantaneous fulfillment they receive on social networks like Twitter and Facebook. This need for feedback is inherent in every aspect of hiring, managing talent, being a candidate, a freelancer or a permanent employee. The paradigm shift is leading away from mastering specific accounting or finance skills to being part of a job industry and job sector community in today’s technological world. The key to winning the talent war is flexibility in hiring, and blending workforce participants with a proactive understanding that flexibility in hiring and job diversity is unavoidable in today’s business environment.
Frank DeLapa is the Chief Financial Officer at Sparks Group.