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The Finance Skills Gap

What is it and how can it be solved?

6Mar

In today’s finance function we have some of the most complex technology in the world. We have algorithms that can predict our P&L 6 months in advance, identify anomalous transactions and conduct full year analysis in seconds.

There is little argument that this has helped the accounting profession and the capabilities that we all have, but technology can only go so far in terms of running a department.

According to multiple reports, we are seeing a considerable gap in the skills that are needed by entry level graduates and the skills present in many who are being hired.

So why is this?

Sandra B. Richtermeyer, chair of the Department of Accountancy in the Williams College of Business at Xavier University in Cincinnati, says, ’I get concerned that students do not receive as much preparation for management accounting roles inside organizations, where they will be working in functionally specific accounting and finance positions where they need an enterprise-wide lens’.

A recent survey from IMA and APQC found the same issues, although candidates who are hired are technically capable of the basics needed to be a top quality accountant, many lack the leadership and enterprise knowledge to become management.

With the improvements in technical teaching and simpler interfaces across the board for accounting software, the skills needed to stand out from the crowd are leadership and strategic thinking/execution. These are not aspects that are commonly taught in accountancy courses at university, so frequently not something that entry level candidates will be familiar with.

According to Ben Mulling, the CFO of Tente Casters, '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. Nobody’s going to come in with all the skills you want, but it can be difficult to find a person who has the frame of mind to see things from a macro level and take charge”. These are the people that are difficult to find in the current job market'.

The only way this can change is firstly for educational institutions to know what they need to teach to prepare they students adequately and for companies to share what they need.

At the moment due to a lack of information from companies, educational establishments need to teach based on what they think companies want, rather than the realities of what companies actually need.

So the best best way to bridge this gap? Transparency and a willingness from educators to adopt new teaching areas.

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