If you work in the field of Accounting, there are two data points I would like you to relate to.
- Accounting is predicted to be one of the professions most likely to be automated
- The American Bureau of Labor Statistics (BLS) has predicted that Accounting is one of the professions that’s expected to grow more than the average of all professions going towards 2026.
Add to that the most recent Financial Times MBA Skill Gap survey revealed that Accounting was one of the least desired skills by companies and most easy to recruit.
So, which is it? Automation or growth? Important or not important? This is what I call the “Accounting Profession Paradox”. In my article series, I test each of these data points. I discuss what they mean to accounting professionals and what choices they should make to still have a successful career.
What are the skills megatrends to look out for
Let’s look at some higher-level trends of which skills you need to succeed in the future labour market. Looking at data from the World Economic Forum, these are the skills that you need to succeed in 2020.
In 2020 which is just around the corner, the skills you need to succeed in your career are:
I’d argue that none of these skills relate well to the basic operations of Accounting. Some might relate well to the highly technical side of accounting, like interpreting accounting standards and adopting new standards in your operations. However, bookkeeping, not so much. Skills like creativity, emotional intelligence, service orientation and negotiation are certainly not skills typically associated with accountants.
Where’s the paradox?
While there might not be a direct contradiction between the skills needed to succeed in the future and the projected growth in Accounting, it begs the question: what are these accountants going to do? According to some globalisation of business related to international trade and mergers and acquisitions growth will lead to a need for more accountants because financial scandals of the past require even more scrutiny of these transactions.
I must say I’m doubtful of these drivers though. Only because they already exist today. We need significantly more of this in an absolute sense because mere productivity gains should be able to account for normal growth. Similarly, there will still be a need for technical accountants in the future to interpret and implement new financial regulation. However, is the absolute amount of regulation going to increase significantly? I’d dare say that it won’t.
It did in the wake of Enron back in the early 2000s, on the back of the financial crisis, and following the European debt crisis in 2012. However, this new regulation has already been implemented. So, the question remains – where will the growth come from? We’ll explore this more in-depth in coming articles.
Where’s the finance function moving?
The finance function is also moving along with the megatrends, where automation is definitely one of them. A study by PwC in 2015 found that the likelihood of accounting jobs in Australia being automated was high (Australia should serve as a good proxy for the rest of the world).
That’s due to accounting being rules-based. Already today, many transactions are almost entirely automated. Think your credit card transactions where the traveller takes a picture and submits the report which automatically gets accounted for due to the rules coded into your system. Think supplier invoices which get handled directly through machine learning reading the invoice and recording the transactions in the order. If there’s information it can’t handle, don’t worry, as an e-mail will be sent automatically to the supplier asking for the needed details.
Next time this situation occurs, the machine has already learned to record the new fields. Even when we move a bit up the finance function’s value chain and look at forecasting. This can also be done by predictive analytics with higher accuracy than humans. Not least because the analytics is not biased.
The pressure on Accountants seem much clearer than the opposite growth trend. Maybe it’s just my own biases, but I see a clear call to action for Accountants (including bookkeepers, AP clerks, billing assistants, etc). Find out how to deal with this paradox to keep your career alive or even just to ensure you have a job in the future!
If you’re an accountant, how do you see the outlook for your career? If you’re working in the finance function, how do you see this paradox? Is there a paradox at all?
This is the first article in Anders Liu-Lindberg’s series, ‘Trends in Finance & Accounting; part of a LinkedIn pilot called “Series”.