Why automation could be risky business for accounting
Not a day goes by without a story about the wonders of digitalisation and how it will transform the work of accountants and their clients.
The Big Four are falling over themselves in the race to embrace the likes of smart data, robotics, data analytics and artificial intelligence. Not wanting to be left behind by the technological revolution, smaller firms are investing in cloud computing and digitalisation, be it at a slower pace.
This is all well and good but there’s a problem: who’s going to manage and work alongside all the new technology being brought in by firms to drive profits in the future? Ageing accountants aren’t going to. Worryingly, neither are new graduates.
Many graduates don’t want to enter accountancy. Those that do are finding their training doesn’t sit well with the rise of automation.
Knowledge and skills gap
Global recruitment firm careersinaudit.com says accountants are threatening to leave their jobs in droves due to the advance of technology*, and with new arrivals unprepared, firms face a serious knowledge and skills gap.
Commenting on the challenge facing firms, Pat Cassady, Talent Acquisition Director at BKD’s National Office in the USA, says: “The pace of change in the accounting profession has accelerated faster than the talent pool has been able to absorb. Furthermore, competition is adding fuel to the gap as we strive to build and buy the talent that exists.”
Driving profits in the future is not just a question of equipping people with the skills to operate robots, it’s about attracting a new kind of talent into the profession and allowing people to create more value through ‘soft’ skills.
As the profession adapts to the digital age, it is clear there will be a growing need for IT literate people capable of managing machines which process and interpret huge amounts of data. Perhaps more importantly, there is likely to be a requirement for people who can add value via human qualities such as wisdom, intuition, empathy and judgment. It is these people skills that will win and retain clients.
The people revolution
The scale of the recruitment and training challenge facing the profession was highlighted recently by Anton Colella, Chief Executive of ICAS, in a keynote speech at the global conference of Praxity, the world’s largest alliance of independent accounting and consulting firms. He told delegates that firms which ignore their people are doomed to failure. “The revolution we need to explore, and we ignore it at our peril, is the transformation of our people. The business model going forward is the commercialisation of wisdom. We need people to help us shape our lives.”
Anton Colella argues that for new recruits coming into the profession, obtaining a qualification is not enough if it fails to develop in them the integrity and “moral courage” that allows them to impart the wisdom and advice that clients want and need. He says this mismatch poses a seriously problem for accountancy firms.
His call for new skills training is supported by Daniel Susskind, lecturer and co-author of the book ‘The Future of the Profession’, who says the accounting firm of the future will need to fill new roles such as empathiser and data scientist. He says young professionals entering accountancy are “livid” because they haven’t been trained for today’s world. Speaking at the Praxity Global Conference, he said: “There is a big burden on our training associations.”
Developing new talent
Accounting associations are making changes to graduate training programmes in a bid to meet the new demands of the profession.
The Association of Chartered Certified Accountants (ACCA), for example, is changing its qualification to make it more relevant but the changes won’t come into effect until 2018. A Strategic Business Leader case study is being introduced with real-world scenarios and “challenges that require students to blend technical, professional and ethical skills”. There will also be a new Ethics and Professional Skills module which will continue to develop ethical behaviour and judgment while also focusing on broader communications, commercial skills, innovation, analysis and evaluation skills.
Speaking at the recent conference of The Accountant and International Accounting Bulletin, Faye Chua, ACCA’s Head of Business Insights, told delegates there is a need to focus on value. She added that while ethical skills will remain important they will no longer be sufficient. “The challenge is to balance the needs of technology, emotional intelligence, creativity, vision, and other skills, and this depends on each person’s job.”
The burden doesn’t just lie with training associations. Firms and employees need to take the initiative. Marco Carlei, Managing Partner of ShineWing Australia, a participant firm in Praxity Global Alliance, says: “We see the future of the profession not necessarily being the sole responsibility of our educators or associations but primarily in the hands of our firm’s leaders and ultimately the employee. It is our leaders’ responsibility to identify and introduce talent that may not necessarily have a technical background but who have the skills to be able to advise and support our clients in their business requirements and growth.”
Emotional and moral intelligence
The accounting talent of the future will need a combination of emotional intelligence (EQ) and moral intelligence (MQ), Marco says. Candidates with high emotional intelligence have strong interpersonal skills, are self-aware, and able to influence business decisions. Those with MQ have integrity, a sense of responsibility, empathy and forgiveness. MQ relates to the way you not only treat others but also yourself.
Marco adds: “Our aim is to assess these attributes through our recruitment processes. We know that this is very difficult however one of our key strategies is having undergraduates work for us for a brief period at the completion of their penultimate year of study. We assess their attitude to work and alignment with our values - their EQ and MQ. During their time with us they get to assess us and how we fit into their personal career objectives and workplace preferences.”
A new approach
Praxity participant BKD is also pioneering new ways to attract and retain people with different skill sets. Pat Cassady explains: “BKD is adapting its talent acquisition approach and broadening its recruiting channels to hire the right talent to serve our clients. Integrity, emotional intelligence, a mindset for innovation and technology are not only traits we search for in hiring our team members but also ingrained in our professional development.”
An example of this new approach is BKD’s award-winning BKD University, an online, on-demand platform offering training, knowledge sharing, and educational content for accounting, tax, consulting, technology, leadership, and coaching. This is facilitated through interactive, experiential, or online programming. Key platforms include BKD’s Leadership Academy, Sales Training Institute and Coaching Program.
“The BKD University and coaching methodologies are catalysts for employees to expand their technical expertise and communication ability to partner with clients and achieve the desired outcomes,” adds Pat.
As firms seek competitive advantage in the digital age, the emphasis on developing innovative new ways to attract and retain talent are likely to intensify. One thing is certain: good people are going to remain at the heart of any successful accounting firm but these people could have quite different skill sets from the accounting professionals of today.