The Management Accounting Profession Will Double by 2024 - Are We Prepared?
IMGCAP(1)]As a management accountant and a CEO, I know first-hand the field continues to grow and expand. I was happy to learn that the Bureau of Labor Statistics expects management accountants and auditors to experience double-digit growth through 2024.
Despite this growth, a troubling pattern has emerged in the profession. Students at many U.S. colleges and universities are largely preparing for entry-level audit and compliance work, but not for long-term careers in our rapidly growing field. The skills needed to succeed in management accounting extend well beyond audit, compliance and reporting to include financial planning and analysis, merger and acquisition activity, strategic cost management and more.
According to a survey, most professionals stay in public accounting only three to six years before moving to a management accounting (CFO team or controller) position inside an organization (for-profit, private and nonprofit). Why is this so important? Because when these professionals move from the audit pathway to the corporate financial management pathway, they may not have the full range of competencies to succeed long-term, creating a gap between what is desired by organizations and what skills accounting talent actually possess.
This skills gap is not just limited to young professionals; it exists at the executive level as well. According to the 2015 Crist/Kolder Volatility Report, 33.3 percent of Fortune 500 and S&P 500 companies recruit CFOs from outside of the company. Clearly, there’s a lack of succession planning and internal grooming for CFOs, compared to, for example, the CEO succession pipeline. When businesses promote employees without training for higher-level skills, or they only import established managers from other businesses, they contribute to the established and harmful “entry-level economy.”
What’s the answer? To address a multi-pronged problem that threatens the next generation of management accountants, we must execute a multi-pronged approach.
In 1986, the Bedford Report, commissioned by the American Accounting Association, found that the courses accounting educators teach do not align with what accountants (broadly defined) actually do and need in practice. While we’ve seen some broadening of accounting curricula over the decades to include decision support, the expanded role of the CFO team to include financial management, strategy and operations has actually exacerbated the talent gap.
A study published by the Institute of Management Accountants (IMA) and the American Productivity & Quality Center (APQC) showed the skills gap in entry-level management accounting and finance has expanded worldwide, with 90 percent of organizations struggling to hire the right management accounting talent. Businesses say that entry-level employees lack many necessary skills—from leadership (the most needed but least possessed competency) to planning, budgeting and forecasting, and strategic thinking and execution.
So what’s the solution to prevent the skills gap from extending into 2024? Accounting education must focus on an integrated, balanced and long-term career approach and not just prepare students for their first job in audit and public accounting. Accounting curricula must be “future ready,” and prepare all levels of accounting professionals for influential positions and careers in both financial accounting (e.g., audit, tax and compliance—the value stewardship role) and management accounting (e.g., FP&A, M&A—the value creation role).
Academic institutions can also participate in the IMA’s Endorsement of Higher Education program, which recognizes institutions whose curricula aligns with the CMA (Certified Management Accountant) body of knowledge, thereby taking an integrated, balanced and longer term approach to curriculum and career development.
If burgeoning talent is misidentified or disengaged, these challenges can lead to increased time to fill open accounting positions, increased recruiting costs, hiring of less-qualified professionals, diminished quality of work output, unfilled positions and added workloads for existing employees—leading to unwanted employee turnover. Therefore, it’s essential that companies also help attract, nurture and develop the next generation of leaders, making them critical assets to organizations.
Individuals, in turn, have a responsibility to continue their education to meet their long-term career goals. Accountants must conduct a self-assessment of their skills to identify gaps in their knowledge and obtain any necessary training and certification. They also can advocate for more training opportunities within their organizations—programs for training and education available through accredited institutions of higher learning, for-profit training programs and internally sponsored programs.
There are also professional associations that offer development programs, earned certifications for accounting and finance professionals (such as CMA, CIA, CFE and CFA), and provide mentoring and career planning tools.
All Stakeholders’ Responsibility for the Call for Action
Everyone has a hand in the talent challenge. The stakes are high because competent and ethical accounting professionals enable sustained organizational growth and an unwavering commitment to ethical behavior. All stakeholders—students, educators, professionals and employers—need to step up to address this call to action in order to enrich careers, organizations and the public interest. By working together, we can develop capable professionals who do more than secure that entry-level job and fuel the double-digit growth of our profession.
Jeff Thomson, CMA, CAE, is president and CEO of the Institute of Management Accountants.