Good accountants are shrinking in numbers. How to attract and retain qualified accountants in today s marketplace.

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1 Good accountants are shrinking in numbers. How to attract and retain qualified accountants in today s marketplace.

2 The accounting profession is thriving. Current supply of talent, by region. How would you characterize the supply of qualified, high-potential talent who are likely to excel in finance? Asia-Pacific 56% 11% A tightened regulatory environment, increased globalization of businesses large and small, and an aging workforce have continued to generate robust demand for qualified and experienced accounting professionals. Despite slower economic growth and job creation in many industries, accountants continue to be one of the most sought after groups of professionals in the marketplace. Over the past five years, Ajilon Finance has seen firsthand an almost 30 percent increase in demand across the board for CPAs and accounting staff who have experience with assurance, internal controls and risk management, as well as international and forensic accounting. However, while demand has gone up, the supply of accounting talent has not grown at the same accelerated pace. With such a talent shortage in the industry, it is increasingly important for CFOs, comptrollers and accounting managers to effectively attract and retain their best employees, not only to meet their on-the-job demands, but also to remain competitive in this tightened labor market for qualified accounting professionals. Ajilon Finance took a look at the impact such a talent shortage has on companies who require accounting talent. The following report features our recommendations for improving your organization s recruitment and retention strategies. Eastern Europe Western Europe North America 58% 5% 52% 7% 39% 8% Supply of talent in 3-5 years, by region. What do you expect the supply of qualified, high-potential talent to be in 3-5 years? Asia-Pacific 37% 16% Eastern Europe Western Europe North America % responding supply is limited or inadequate Limited supply Inadequate supply 48% 5% 42% 10% 34% 13% % responding supply is limited or inadequate Limited supply Inadequate supply Meeting the demand for talent, now and in 3-5 years. How would you characterize the ability of your organization to meet its demand for finance professionals? 2 A total of 636 executives from 73 countries participated in a survey, which was conducted by the Economist Intelligence Unit in collaboration with Deloitte & Touche Tohmatsu in April-May Unable to 5% meet demand 6% Barely able to 37% meet demand 28% Able to 51% meet demand 42% More than able 7% to meet demand 13% Now In 3-5 years

3 Growth in the accounting profession. Today, while the need for increased staff due to SOX implementation is waning, talent is still needed for ongoing maintenance of such programs and to support the increased complexities of the everchanging compliance and regulatory standards. Other areas currently experiencing growth and forecasted for continued expansion and investment include forensic accounting, tax strategy and planning consulting, build-out of business intelligence tools and implementation of real-time financial reporting mechanisms. Further, as XBRL implementation becomes a top item on companies agendas, there will be strong demand for finance talent to ensure integration is seamless, effective and within regulatory standards. According to the Bureau of Labor Statistics, the demand for accounting and finance professionals is expected to grow faster than the average for all industries, with an anticipated 18 to 26 percent growth rate through As corporate earnings continue to be solid, companies are experiencing an increased demand for financial professionals to handle new regulatory requirements, reporting structures and tax policies. Additionally, with more businesses entering the complicated global marketplace, we are seeing a greater need for highly-skilled accounting and financial talent. 3

4 High demand + low supply = accounting talent shortage. According to Barry Melancon, President of the American Institute for Certified Public Accountants (AICPA), the profession is aging. The AICPA reports that, by 2020, three-quarters of its membership will reach retirement age. Baby Boomers make up the highest portion of the accounting profession and, as they plan for retirement, their departure will leave a very large talent void. While the number of accounting graduates has been steadily increasing in the U.S. over the past two to three years, these increases are not high enough to offset the loss of the Baby Boomers. In addition, a 2008 survey by the National Association of Colleges and Employers found that accounting majors were the most sought after graduates by employers. Thus, the brain drain that is expected to hit the industry over the next decade will require the attention of employers and senior executives in the field. Although much of the impact of SOX has been beneficial to the capital markets (e.g., greater transparency and accountability, strengthened internal controls, higher quality financial reporting) many accounting and finance professionals have experienced increased pressure, risk and stress, causing some to sour on the profession and vie for positions on Wall Street or in related fields such as financial planning where they believe the grass is greener. Additionally, with the growth of private equity, those accounting professionals with experience expanding, launching or restructuring businesses can also find a diverse set of opportunities. Considering this imminent talent shortage, it is more vital than ever for firms to strengthen recruiting and retention strategies if they are going to be able to deliver value and compete in the marketplace. Barry Salzberg, managing partner at Big Four accounting firm Deloitte & Touche agrees, saying, I believe that talent management and recruiting will be a continued concern in the coming years. While there s a strong talent pool from Generation Y interested in joining the accounting profession, I find that an increasing responsibility will lie with business and academic leaders to shape that talent into leaders who will be able to face the challenges that business presents. A new approach is required in order to attract and retain this next generation of leaders. Employment of accountants and auditors is expected to grow faster than average for all occupations through the year An increase in the number of businesses, changing financial laws and regulations, and increased scrutiny of company finances will drive growth. BUREAU OF LABOR STATISTICS 4

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6 Going back to basics to win the accountant talent war. By getting back to basics with your human capital, you will yield attraction of better talent and also strengthen retention. The following is an overview of the top five recruitment and retention issues organizations face today when it comes to accounting talent, along with Ajilon Finance s recommendations on how to best manage them in today s competitive marketplace. 6

7 Dealing with 5 key issues in recruitment 1. Attracting candidates. In today s competitive marketplace, accounting candidates are being inundated with opportunities from a long list of potential employers public accounting firms, private practices, multinationals and financial institutions. To attract new accounting staff, it is important to be proactive in your efforts and utilize all available recruitment resources. Further, think about what s most important for accountants and try to appeal to these desires market your employment capabilities like you would market your services to a potential client. For instance, many Generation Y finance professionals entering the workforce are looking for jobs that will allow them to strike a manageable work/life balance, but have preconceived notions about the long hours typically associated with the finance profession. A great way to attract these individuals is to showcase your firm s commitment to work/life balance and illustrate the programs and processes in place to ensure they can be successful on both fronts. 2. Finding the right fit. The accounting profession is known to oversee cyclical processes, with certain times of the year requiring more hours at the office than others. Therefore, there will be times when accountants will spend a lot of hours with their colleagues, often partnering on very analytical and tedious tasks. With this in mind, not only should a potential employee have the right skills and experience they must also fit in to your corporate culture. Be sure to have potential hires meet with a wide range of staff before making a final decision. Hiring managers may also see an influx of resumes from candidates with a non-traditional accounting background. With the turmoil in other sectors of the economy, like the mortgage industry and financial services, finance and accounting hiring managers should be openminded and focus on hiring individuals who have transferable skill sets that would enable them to be successful in the organization even if they do not have traditional accounting experience. 3. Compensation. Many accountants are drawn to the profession not only for the analytical work, job stability and opportunity, but also the compensation. Accounting is known to be one of the higher paying professions, so be sure you are offering competitive salary and benefits. What s competitive? That s a question employers often struggle with, but there are resources in place to assist hiring managers. One great resource is Ajilon Finance s annual Salary Guide which offers salary ranges for a wide variety of accounting professionals, breaking data down by position, geography and experience. Additionally, websites like PayScale.com and Vault.com offer up-to-date and accurate information on salary ranges for professionals working in the field. 4. Recruiting new graduates. As a long-term solution to the current talent war, building a strong talent pipeline should be top priority for accounting and CPA firms. How? Get online! According to the Journal of Accountancy, Students are well-connected to their predecessors already inside accounting firms and are trading notes via , instant messaging and online communities such as MySpace and Facebook. Use the Internet to your advantage don t only create a section about careers on your website, but take a lesson from Big Four firms like Ernst & Young and 7

8 PricewaterhouseCoopers who have testimonials from both senior and junior accountants telling of their experience at the firm. Upload a video showcasing a day in the life at your company or provide a podcast from a senior executive talking about their career path as a senior accountant. Ultimately, new grads want to work in a fun environment where there s plenty of opportunity for growth in all of your marketing efforts be sure to showcase how your company fulfills these newbie wants and desires. 5. Recruiting seasoned executives. Recruiting highly-skilled employees is a top priority for accounting firms. These individuals provide the strategic counsel and direction to implement the financial reporting shifts and tax restructuring often required by clients and internal accounting departments. However, most of these executives are part of the Baby Boomer generation and will soon be considering retirement. In order to recruit these seasoned professionals away from their current employers, you will need to offer benefits like flexible work arrangements, as well as competitive compensation and on-the-job perks. Given the cyclical nature of accounting work and these individual s desire for flexibility, you should also consider bringing on senior accounting consultants for a defined period of time when help is needed most. Dealing with 5 key issues in retention. 1. Employee engagement. Do you want to manage a team of finance professionals who gets the job done or one willing to go above and beyond the call of duty? Optimally, employers seek to create an environment where their staff is enthusiastic and excited having an engaged staff not only impacts attitude, but also leads to higher quality work. Being that accountants are responsible for ensuring the financial health of an organization, it is especially important that these staff members are committed and dedicated. In order to keep staff engaged, help your team see the bigger picture and how their efforts really do keep the broader organization afloat. Also, make sure to recognize and reward your staff. After tax season, for instance, reward staff with a day off or group outing to celebrate the team s success. Be sure the same people aren t working late every night alternate schedules so everyone feels their personal time is a priority to the company. 2. Establishing a positive work culture. Oftentimes accountants spend more time with their work family than at home with their actual family and friends. These professionals will need more than compensation to keep coming in everyday they need to feel connected and part of a positive work culture. Generally, the best on-the-job environments for accountants are fostered when ethical leadership is promoted and teamwork is encouraged and at the core of all activities. Have tax preparers engage in open dialogues with their reviewers; have senior counselors interact and mentor junior staff; allow client 8

9 contact and senior exposure to new staff that prove their on-the-job abilities. These efforts will build a culture where hard work is appreciated and individuals are given the opportunity to interact with and develop from one another. 3. Performance reviews. Given the highly technical nature of accounting projects with errors potentially having very real legal and financial consequences it is imperative that any inaccuracies are caught and amended. Just as this level of detail is applied to reviewing tax returns, financial reports and income statements, the same attention needs to be paid to an individual's overall job performance to ensure feedback is received and performance improves on a timely basis. Performance reviews are an employer s chance not only to identify a staff member s strengths and weaknesses, but also to showcase their commitment to each individual s personal development. According to a 2006 Workplace Insights survey by Adecco North America, Ajilon Finance s parent company, only 49 percent of American workers find managers take performance reviews seriously. In order to keep staff on board, employees need to know their achievements and hard work are noticed, and will therefore be appropriately recognized. 4. Training and development. Regulations evolve, software changes, organizations and their financial processes restructure these are the realities of being a finance professional. Offering staff opportunities for ongoing training and development is the only way to ensure all employees are up to speed on these evolving systems and processes. Further, an investment in a training course or development plan for staff members reinforces your investment in them. Training and development opportunities can take on many forms from web-based courses managed by external vendors to sessions facilitated by internal experts. Lunch-and-learn sessions and mentorship programs are two additional inexpensive and effective ways to do so. Organizations like AICPA ( National Association of State Boards of Accountancy ( Institute of Management Accountants ( and Financial Executives International ( offer ongoing training opportunities and continuing education credits for professionals. 5. Career pathing. Accountants often get so caught up in their day-to-day work that it s difficult to see what s next in their careers and, more importantly, how they can get there. What does it take to go from a staff level position in accounts payable to controller? Financial analyst to CFO? Staff accountant to senior tax specialist? Employers should take the time to define each of the rungs on the ladder so that staff clearly knows what s expected of them in order to get to the next level. Further, reward those who show potential and promote them quickly so they know they have a place in your company s future this will ensure they think twice the next time a competitor or headhunter dials their number. 9

10 The profession is changing rapidly. In five years, we will likely recognize it as accountancy, but will be astounded by the burgeoning standards that must be followed, adherence to which will be difficult, time-consuming and costly. Entry into the profession will be difficult because of the complexity of practice. WANDA SAMEK, PRESIDENT NATIONAL SOCIETY OF ACCOUNTANTS 10

11 What company attributes do accounting and finance professionals find most important? 1. Company infrastructure Comprehensive resources to get the job done (cited by 67 percent of respondents) Access to the latest technology to aid productivity (55 percent) Investment in leading tax and accounting software (48 percent) 2. Company culture Ethical leadership (63 percent) Work/life balance and familyfriendly policies (56 percent) High-quality feedback and supervision from management (24 percent) 3. Benefits and compensation Compensation (74 percent) Flexible hours (51 percent) Reward based directly on merit (34 percent) From bean counters to mission critical human capital. Over the past decade, more and more accounting professionals have been driving for CFO (and even CEO) positions. As the demand for accounting professionals continues to grow, the complexities, dynamics and challenging nature of the profession are changing rapidly as well. It s no longer boring to be a top CPA we anticipate, from now through 2010, the job market for accountants will be one of the best ever. This alone should emphasize the importance of building an effective recruiting and retention strategy. For more information on how to attract top accounting and finance professionals, please contact Ajilon Finance today. Call 866.GO AJILON or visit ajilonfinance.com to find your local representative. 4. Professional training and development Support for continuing professional education (49 percent) Challenging work environment (37 percent) Continuous skill development (33 percent) Source: CCH (cch.com), a Wolters Kluwer business, 2006 Young Accounting Professionals Survey 11

12 About Ajilon Ajilon Professional Staffing is a leader in recruiting and project consulting, with specialty divisions in finance and accounting, management and office support, and legal. In North America, more than 200 offices service a range of clients through an integrated suite of human capital solutions. Ajilon Finance specializes in the temporary and direct-hire placement of premier accounting, financial and bookkeeping professionals. Ajilon Office offers clients specialized management and office support professionals on a temporary and direct-hire basis. Ajilon Legal places highly-qualified candidates in a wide range of specialized positions including attorneys, paralegals and legal support professionals. Ajilon Finance Solutions provides senior-level financial and operations professionals to companies on a project or interim basis. Leaders in Specialized Financial Staffing & Recruitment 866.GO AJILON ajilonfinance.com 2008 Ajilon #9096