A crisis of competence: The ‘skills gap’ and what it means for businessBill Sheridan, CAEOct. 25, 2016

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Poll: What generationdo you belong to?

The problem:

Many youngprofessionals arelargely unpreparedto meet the challenges posed by a changingand complex world.

The reason:

The ‘skills gap.’

There is a significant gap between the skills young professionals need to succeed …

… and those they actually possess.

Report after reportpoints to this ‘skills gap’as a real burdenon today’s businesses.

1. Communication2. Writing skills / memos3. Critical / strategic thinking4. Advanced Excel skills5. Time management / organization6. Prioritization7. Collaboration

In an August 2016 strategy session facilitated by the MACPA and the BLI, the managing partners of 14 local, regional, and national CPA firms ranked what they believe are the most important skills for entry-level staff members.

The most critical non-technical skills needed by young professionals:1. Ethics2. Communication3. Customer service4. Adaptability5. Strategic thinking /

execution6. Process improvement7. Leadership8. Collaboration

This is from a report produced by the American Productivity and Quality Center and the Institute of Management Accountants.

81 percent of those polled say planning, budgeting and forecasting skills are critical. Only 30 percent of entry-level finance professionals possess those skills.

77 percent say leadership ability is a necessity, but only 14 percent say their employees have it.

A May 19, 2015 article in The Wall Street Journal found huge gaps in the supply and demand of certain skills:

The top four skills leaders must possess to succeed in a world defined by volatility, uncertainty, complexity, and ambiguity:

1. Managing / introducing change2. Building consensus / commitment3. Inspiring others toward a future

vision4. Leading across generations

The Conference Board’sGlobal Leadership Forecast 2014-15 examined the skills that will bemost in demand going forward.

The top five skills young professionals say they need to be successful:

1. Communication2. Inspiring and motivating others3. Strategic and critical thinking4. Anticipating and serving evolving

needs5. Influencing and persuading others

The MACPA’s Tom Hood facilitated a session at the 2015 AICPA E.D.G.E. Conference for young professionals. Here’s what attendees said:

The top four teachable skills for young professionals:

1. Critical / strategic thinking

2. Time management3. Writing skills / memos4. Problem solving

Then there’s this from“Top Ten Skills in New Hires,”a white paper produced bythe Connecticut Society of CPAs:

“Senior roles in finance place less emphasis on accounting and finance skills and more emphasis on business acumen, people skills, and leadership skills.”

− 2015 CIMA Professional Qualification Syllabus

Do you see what’s happening here? Report after reportfinds the same thing: Young professionals

need more ‘soft skills.’

The ‘soft skills’ that are most in need are largely the same from report to report: strategic and critical thinking, communication, leadership, anticipation.

56 percent of employees were only somewhat prepared for their first accounting or finance job.

14 percent were not at all prepared.

The most often-cited reason: Knowledge gained in the classroom didn’t translate to the job.

Young professionals often say they are unprepared to meet the demands of today’s workplace. From the Robert Half Readiness Index:

And yet …

Who’s to blame?

Employers blame higher education.

Higher education blames theK-12 system.

The real answer is more complicated.

The exponential pace of change and technology is automating lower-level skills. That means “soft skills” are crucial at earlier ages.

Source: Frey & Osborne,“The Future of Employment,” Oxford University

Race against the machines?

VALUE

Adding Insight for Action

Information

Wisdom

Knowledge

Data

Compliance

Reliance

Source: CGMA and DIKW Pyramid

VALUE

What does the future hold? Automation replacing routine

tasks – higher order skills are needed to survive..

Alternative options to services and knowledge – automated or otherwise. Tax and audit implications.

Globalization, specialization and consolidation changing the landscape.

Domain expertise matters.

“The environment in the early CPA career is more demanding of those ‘soft skills,’ especially communication and business acumen. Some posit that in the future, ‘back office’ functions will be automated, which will require entry-level workers to do more customer- and client-facing work earlier in their careers. What does this mean as far as the skills they’ll need to do that work?”

-- Tom Hood, CPAMACPA Executive Director

CPAs who succeed going forwardwill have mastered the “soft skills”

that improve their abilityto do client-facing work.

We must urge educators at every level to transform their business and accounting curricula to include skills like leadership, collaboration, and

strategic thinking. But until then …

“Thinking about information overload isn’t accurately describing the problem. Thinking about filter failure is.”

Clay ShirkyNew York University

new media professor, writer, and consultant

The age of adaptation“The need to constantly adapt is the new reality for many workers.”

Serial mastery

These workers “are often left to figure out for themselves what new skills will make them more valuable, or just keep them from obsolescence.”

1. Decisiveness2. Problem-solving3. Anticipation

Autonomy Mastery Purpose

What do people really want?

CollaborationCloud Infrastructur

eMobileTechnology

Young professionals must take it upon themselves to learn the key skills that will make them future-ready.

Where can they find those skills?

Poll: What arethe top skills accounting and finance pros need to succeed?

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A crisis of competence