Training Challenges Facing Accounting Executives
In the current economic climate, chief financial officers (CFOs) are facing enormous challenges in efforts to keep costs low and deliver value while keeping up with the rapidly evolving regulatory environment. This is especially true when it comes to training – a high-priority but often high-cost necessity thanks in part to pending International Financial Accounting Standards (IFRS) and eXtensible Business Reporting Language (XBRL), which will impact many organizations.
Demand for training is higher than ever, as evidenced by its ranking as one of the top three challenges facing CFOs today in a 2009 Grant Thornton survey of senior finance executives with public and private companies in the United States. The problem is that training budgets are almost nonexistent. Further, with fewer individuals shouldering more work, staff members lack the time to complete training activities.
In particular, with demand far exceeding supply in most organizations, training for soft skills such as time management, communication and leadership was ranked by the majority (77%) of CFOs surveyed as the most significant training challenge for existing talent. Not only are soft skills difficult to teach and observe, but many CFOs have a hard time communicating deficiencies and identifying training programs that will successfully address the shortfall. Additionally, some CFOs believe that training for these skills is too difficult to achieve in-house and have instead turned to outsourcing those skills.
CFOs also face training difficulties on the accounting front, including understanding and applying IFRS (68%) and addressing new external reporting needs (50%). Further, concerns around staff exposure to accounting-related issues are exacerbated by a never-ending stream of new and modified guidance covering a variety of accounting rules and regulations. And with implementation dates uncertain, technical training is often rendered ineffective because of the significant lag between such training and its unknown application date.
Today’s accounting professionals must possess a basic understanding of Enterprise Resource Planning (ERP) and other IT systems. Because they are both the keepers and managers of data, they must overcome technological skill deficiencies to leverage decision support. Functional knowledge of these systems is also driven by regulatory compliance, which necessitates the integration of financial accounting and enterprise-wide IT systems. Unfortunately, most CFOs surveyed were frustrated with available technology-related training options, noting that they did not impart the knowledge needed to answer questions from an analytical standpoint.
Addressing these issues will require that CFOs use a mix of talent acquisition and training. In certain circumstances, hiring new personnel may be less of a strain on operations than training existing staff. This is especially true when it is important to build specialized skill sets quickly. However, training existing talent is still fundamental when building soft skills.
Though some soft skills are innate, training for those that are not can be achieved through one-on-one interaction or personal involvement, such as mentoring, rather than formal classroom training. Further, because soft skills are rather varied, companies should employ different training approaches depending on the skills to be deployed.
For both technical and soft skills, CFOs reported finding the most success when organizations employ internal subject-matter experts to act as learning champions. In-house training was also identified as more effective than external seminars, since in-house sessions can be trained to the needs of the organization.
Establishing senior management support is also key to success, according to CFO interviews. However, despite the many training mechanisms available, organizations must recognize that they may need to adjust their expectations for the scope of training that can be achieved in today’s circumstances. Though options are available, the challenges to overcome are still plentiful and must be tackled with organization-wide support.
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