By Bill Sinnett of Financial Executives International
Both students and faculty in accounting share a common interest in what the Wall Street Journal will be publishing five years from now. Students want to make sure that they have the skills necessary, not just for today, but for their entrance into the profession, while faculty want to make sure they have done their job in developing curricula that is future-focused. In order to assist both groups in planning for the future, Financial Executives Research Foundation (FERF) has produced an Accounting Preparedness Survey for 2012.
Increasing Demand for Higher Degrees
The Accounting Preparedness Survey, sponsored by Robert Half International, collected responses from members of Financial Executives International (FEI) who represent top decision-makers in their companies. Manufacturing companies responded most frequently, but the spectrum of industries represented encompassed a wide swath of the economy.
The median responder expects that demand for accounting and finance staffing will rise over the next five years, as will demand for more advanced degrees. For example, about a quarter of new hires in accounting and finance jobs in the U.S. have associate degrees, a percentage that is anticipated to fall rather dramatically within the next five years. In comparison, the percentage of new hires with bachelor's and master's degrees should rise. This reflects the willingness of corporations to invest in more human capital. For the new graduate, more is better with regard to education.
When the executives were asked about their hires in the last 12 months, a distinction emerged between those with accounting degrees and those with finance degrees. The majority of current hires (and expected future hires) held bachelor's degrees or higher in accounting but not in finance. However, these results reflect the many manufacturing firms that responded, and they might well be different in other industries, particularly in financial services firms.
A Competitive Market
Many accounting and finance functions, especially in smaller firms, are outsourced and this practice is expected to continue. Approximately half of these outsourced tasks are performed by domestic workers, with the rest outsourced overseas. For both student and faculty, this outsourcing represents the competitiveness of the finance and accounting labor market, as well as its internationalization.
In general, executives are pragmatists. Employers are not looking for generalists when hiring finance and accounting staff, but they do demand that new staff members integrate well with the rest of the firm. Currently, process control and accounting regulation are the dominant technical competencies expected by employers. Surprisingly, IT skills are virtually as important as sub-categories of accounting, such as cost accounting. Going forward, employers expect that IT skills will rise in importance, to the level of virtually any other technical skill. Surely this is one aspect of the IT revolution in business as a whole, manifesting itself in aspects of organizational control and financial reporting.
New Regulations Affect Required Job Skills
Accounting and finance students are graduating into a business world dominated by decisions made in an uncertain and a rapidly-shifting regulatory environment. The accounting profession in particular faces unrelenting challenges. Even after the adoption and integration of the Sarbanes-Oxley rules, a veritable avalanche of new corporate accounting and reporting requirements are on the horizon as a result of Dodd–Frank Wall Street Reform and the Consumer Protection Act. We can only conjecture as to what will ensue in new domestic and international law going forward, but students should be confident that the world will be more abstract and unstructured when they graduate than it is now. The survey certainly shows that.
Among the most important professional skills currently required of new hires is the ability to identify and solve unstructured problems. Employers are looking for individuals with the capacity for inquiry, research and analytic thinking. Interestingly, those abilities are more important than written or oral communication skills, although individuals lacking the ability to write and speak well are at a significant disadvantage.
When the executives surveyed looked forward five years, not much changed regarding the skills that they expect in the individuals that they anticipate hiring. The type of person that they continually identify as most valuable to them has the capacity to isolate and creatively solve problems without a formal structure. Inherent in this type of individual is curiosity, which drives individual investigation and research. This kind of person has the intuitive ability to analytically resolve amorphous situations.
Our financial executives were clear about their recommendations for accounting curricula. While their survey answers show that they are interested in individuals with both undergraduate and graduate degrees who possess the capacity for abstract thinking, they are not looking for theoreticians. Rather, they would prefer an accounting curriculum with a strong focus on real world, practical, global perspectives, and, when possible, candidates with solid experience in accounting. Overall, executives are looking for a curriculum that produces students with the technical and personal tools to handle a fast-moving and exciting profession, and with the maturity that experience offers to facilitate their success and that of the firm.
About the Author
Bill Sinnett is Senior Director of Research at Financial Executives Research Foundation (FERF), the research affiliate of Financial Executives International (FEI). Bill also supports FEI's Committee on Finance & IT (CFIT), and authors its e-newsletter, "Finance & IT News."" For more information, visit http://www.financialexecutives.org/KenticoCMS/Research/Research-Publications.aspx.
Bill joined FEI as Accounting Manager in 1985, and became Manager of Research for FERF in 1989. He was promoted to Director of Research in October 2005 and Senior Director in October of 2011. Prior to his positions at FEI and FERF, Bill was employed by Carnegie-Mellon University and Mellon Bank in Pittsburgh. He has a Master of Business Administration from the University of Pittsburgh. Bill can be reached at email@example.com.