The accounting and finance field is facing a serious talent shortage for a variety of reasons. Two of the main factors are a decline in interest from younger people in the accounting profession and a rapid rise in retirements from people who have worked in the field for many years.
Misconceptions also play a role: Younger people often have outdated ideas about the role of accounting and finance professionals and how accountants contribute to business value, says Mike DePrisco, president and CEO of the Institute of Management Accountants (IMA). They may also not realize that an accounting degree or work experience can lead to many fulfilling career paths.
But there are also real barriers: Accounting jobs, for example, have educational and professional requirements that can “screen out” individuals rather than draw them into the profession, DePrisco said.
“All of these factors are combining to create a tipping point — and a tremendous opportunity for positive change,” DePrisco said in a discussion with our own Katie Kuhner Hebert, who asked DePrisco how CFOs can contribute to this positive change.
How will the accountant shortage negatively impact businesses and CF?male?
At IMA, we often say that accounting is the language of business. Accounting supports everything from day-to-day operations to internal controls, risk identification and mitigation, strategy, compliance and performance. When businesses lack qualified accounting and finance professionals, they increase the risk of skills gaps in these critical elements, leading to errors, poor performance and impaired decision-making capabilities.
This means CFOs may face a range of issues, including missed important reporting deadlines, gaps in crucial month-end close processes, increased risks related to supply chains and cyber security, etc. Ultimately, the CFO will be held responsible, even if the pressure is due to a broader issue of talent shortages.
What steps can CFOs take to stem the talent exodus from accounting and finance roles?
When it comes to talent retention, integrating modern technology more quickly and effectively into finance functions can help reduce compliance burdens and burnout for accountants. IMA's recent report, “The Impact of Artificial Intelligence on Accounting and Finance: A Global Perspective,” outlines the obstacles CFOs face in sufficiently automating the “menial tasks” of accounting that lead to burnout and turnover, and freeing up accountants for more important, rewarding work, which will make them less likely to leave their companies and the profession.
One of the report's findings is that CFOs are often responsible for how quickly and effectively their organizations adopt and leverage AI in finance, meaning they need to set the tone at the top for technology adaptation and integration, or lower-level staff are less likely to take the initiative to learn new tools on their own.
Organizations can also retain employees by offering competitive compensation and benefits, creating a supportive and inclusive work environment, building a respectful culture that recognizes good performance, providing opportunities for professional growth and development, and promoting a healthy work-life balance.
Younger generations expect to work for organizations that prioritize employee well-being and the interests of wider society. CFOs must address these concerns through concrete policies and proactive communication with staff. The ability to partner and collaborate with CHROs will help improve retention.
How can CFOs effectively recruit external talent into their own companies and the accounting field?
The second challenge is attracting new accounting and finance staff. This involves educating potential professionals about the exciting roles accountants play in today's organizations as strategists, data analysts and business partners. For these different roles, on-the-job training, professional certifications and upskilling programs by employers can help fill gaps and bring individuals up to speed.
The IMA is supporting this training by introducing a new certification, the Associate in Financial and Management Accounting, designed to broaden the horizons of future professionals. For anyone interested in gaining foundational insight to accelerate their career, this new certification is relevant and doesn't require worrying about extensive academic or professional requirements to get started.
As the accounting profession continues to evolve into one that relies on technology and data to create value, it is imperative that accountants have these competencies to do their jobs effectively. Business professionals in fields such as IT, data science, engineering and project management can quickly master the fundamentals of financial and management accounting and use this knowledge to transition to new roles or improve their performance.
This shift requires CFOs to think more flexibly and creatively about where and how they source talent, beyond traditional accounting degrees, programs, and pathways. In the long term, CFOs are advocates for the benefits of being an accountant in terms of compensation, work-life balance, values, and purpose. These elements are important to the next generation of professionals.
