When it comes to finding an entry-level job in Finance, is the problem a shortage of jobs or a shortage of job skills?
This blog was first posted on the Corcentric.com website.
The skills that CFOs and finance managers are looking for in entry-level candidates have changed over time. Jobs are there for those that possess the right skills and qualities.
The long-touted job shortage has become more of a skills shortage. Despite the numbers of people who have lost jobs or of college graduates who had to take a job well below their anticipated salary level or expertise, the real issue remains qualifications. The current job market, especially in the accounting and finance industry, requires candidates who possess leadership capabilities beyond their experience. It raises the dilemma of identifying competent entry-level finance professionals with a comprehension of management who can grow into their positions. What’s a CFO to do?
Organizations need to reassess the qualities they emphasize in job descriptions. The Competency Crisis Initiative, in conjunction with the IMA (Institute of Management Accountants) and APQC (American Productivity & Quality Center), conducted a survey titled “The Skills Gap in Entry-Level Management Accounting and Finance.” They found that leadership is the only competency to make both the most needed and least possessed competency lists. What’s the reason for this? A CFO.com article published earlier this year talks about the shortage of top-quality accounting and finance candidates, especially for the entry-level positions. Much of this can be attributed to the fact that the jobs themselves have changed; companies are looking to fill competencies that the organization needs, not just fulfill basic functions that automated solutions can handle faster and more accurately. That’s where the disconnect comes in. These new competencies may not be the ones that entry-level employees possess.
The Competency Crisis Initiative, which is a coalition of students, professors, employers, and finance professionals, organized by IMA and APQC has a goal to “rally the accounting and finance community to end the skills gap.” Their survey, which questioned 173 finance professionals in either manager or director positions, also found that the issue of competency and the lack of it in entry-level employees affects enterprises of all sizes.
Automation of manual tasks has affected functions within an enterprise, enabling workers to play a more strategic role; one that can actually focus on company growth. And the introduction and deployment of complex analytical tools and advanced information systems require employees who have an understanding of these technology tools and know how to optimize their usage. As Ben Mulling, the CFO of Tente Casters and a Competency Crisis spokesman said, “I can go out and find a good accountant. But I’m not looking for that. I’m looking for someone who’s going to fill manager roles in three to five years, somebody who thinks the right way.” Pointing out how technology fulfills the basic functions, Mulling said, “I no longer want someone to tell me they can do debits and credits. My ERP system does 99% of that.”
So if companies aren’t necessarily looking for the ability to fulfill the basic and traditionally accepted functions of the job, what are they looking for? According to the survey, companies are looking for candidates who exhibit both technical and non-technical skills. In technical competency, the largest gaps are in planning, budgeting, and forecasting; cost management; internal financial reporting/performance management; and enterprise risk management. In non-technical skills, the largest gaps are in leadership, strategic thinking and execution, change management, and process improvement. These are all qualities that must be considered at the hiring stage.
This is an issue that plagues a wide variety of industries and job titles. Whether it’s an ongoing and worrisome shortage of truck drivers, a lack of college graduates in the necessary STEM (science, technology, engineering, and math) studies, or a dearth of accountants, companies are desperate to find the right people for the right jobs.
The skills shortage can be addressed, but it needs to be addressed at both the college curriculum level and the hiring organization level. College courses may be more focused on filling public accountancy positions rather than finance positions within enterprises; so GAAP rules will be a part of the curriculum.