Evolving Accounting Industry Offers Buoyant Jobs Market For MBAs
Regulatory pressure is shifting the accountancy landscape. Professional services firms are in a battle for talent at both business schools and accounting institutes.
The accountancy profession is braced for change. Regulators are evolving the business models of companies like Deloitte, EY, KPMG and PwC. Competition for clients has become fierce. A shift into more lucrative lines of professional services has begun.
As auditing contracts with big business are in flux, and the industry faces a dearth of talent, there is renewed demand for accountants. From jobs in accountancy firms to financial management roles in FTSE 100 businesses, accountants’ stars are on the rise.
“Employers are taking on more people than ever before and the qualified end of the market is still very buoyant,” says Gavin Aspden, director of qualifications at the Institute of Chartered Accountants in England and Wales (ICAEW), which offers ACA, one of the main accounting qualifications.
Demand is strong in the UK, but there is a burgeoning accountancy market in fast-growing economies like China, India, and in Latin America and sub-Saharan Africa, says Helen Brand OBE, chief executive of the Association of Chartered Certified Accountants (ACCA).
“There is a clear need for financial, strategic and ethical oversight,” she says. The future stewards of finance are needed in emerging markets in particular to help sustain economic growth, Helen says. “All organisations are very conscious of the need for financial stability.”
There are three main accountancy qualifications – ACA, ACCA and CIMA, provided by the Chartered Institute of Management Accountants – and they have huge networks. ACA, recently mooted as the most popular by UK recruitment firm Hays, has more than 142,000 chartered accountants globally.
Professional services firms like Grant Thornton, Baker Tilly and Smith & Williamson have been big advocates of accountancy qualifications, but audit groups have been expanding their reach to hire talent from top business schools.
“The employment outlook looks strong for accountancy. The economy is recovering and so there are more senior roles,” says Alex Stremme, assistant dean for the Finance & Accounting Masters portfolio at the UK’s Warwick Business School.
This is the result of tighter financial regulation, cost control and corporate scandals, he says, such as UK supermarket giant Tesco’s recent £263 million profit overstatement. “There is apparent strong demand for senior and executive finance appointments,” he says.
Warwick’s MBA graduates are finding jobs not just in the “Big Four” accounting companies but in smaller firms like BDO, Alex says, and Warwick’s MSc Accounting & Finance graduates have been hired by hedge funds, and banks including Credit Suisse and Lloyds.
It is a similar story at Henley Business School, based near London, according to Naeema Pasha, head of careers. “We have seen an increase in activity in recruitment,” she says.
Academic qualifications are important, but large professional services firms are increasingly placing emphasis on so-called soft skills – leadership, teamwork and interpersonal qualities. “All essential skills in professional services firms,” says Naeema.
MBA students who put accountancy careers on hold during the financial crisis are now dusting off their CVs.
These graduates are ultimately seeking to become partners, finance directors or CFOs, and thus tend to seek positions within the larger firms which have scope for advancement.
“This means they need to develop skills to build client relationships, plus show leadership and strategy skills,” says Alex at Warwick.
Business graduates who studied overseas may be in high demand among accountancy firms in their home countries. Economies with ambitions to become high-income nations face an accounting skills shortage.
Malaysia, for instance, needs approximately 60,000 accountants through to 2020, according to ACCA Malaysia, a figure widely reported. Mainland China and Hong Kong similarly face a skills shortage, according to comments published in 2012 by the ICAEW.
Various incentives have been used to close the talent gap. China’s Ministry of Finance’s Training Workshop for Leading Talents program provides six years’ training and includes overseas sessions. The Returning Expert Program in Malaysia ensures returning nationals pay just 15% income tax for five years rather than the top rate of 25%.
The World Bank often provides funding to ministries of finance to buy in accounting expertise, according to Gavin at the ICAEW. “We’ve won the tenders to work in certain parts of Africa and Asia, [and] some in the Middle East,” he says.
The need for more talent in the industry is pushing companies to make great efforts to lure financial professionals into accountancy jobs. Recruitment has been aggressive.
Firms are offering accountants travel and work experience opportunities, exposure to senior-level executives and additional training, Gavin says. “They might end up with 20 times as many applications as vacancies, but they don’t sit back and rest on their laurels,” he says.
Mercer Human Capital, a recruitment consultancy, pointed out that work-life balance is now a priority for accountants, says ACCA chief Helen. “Employers need to tailor their offer and many of them are doing that… Talent needs nurturing,” she says.
These employers are increasingly having to integrate a deluge of data into their professions. Accountants will need to work with data scientists and manage systems and databases themselves.
Paul Schoonenberg, MBA careers manager at Aston Business School in the UK, says: “Finance is already having to address the realities of big data by aligning the function further with sales and operations within complex businesses.”
Big data is starting to take hold on the industry and the Big Four accountancy firms are leading the way, says Alex at Warwick. But a more disruptive change to accounting at these firms is a shake-up in industry regulation.
Under new UK and EU rules, listed companies and banks now have to change auditors after 10 years. This change aims to disrupt the often cosy auditor-client relationships, which have come under fire since the onset of the financial crisis.
Nearly twice as many FTSE 350 businesses were expected to tender auditor mandates in 2014 than a year before. These changes are the cause of fierce new competition among firms for new clients and different types of revenue streams.
At the same time consulting projects, which tend to be more lucrative than audit work, are now being given a greater focus at large professional services groups.
For the Big Four, consulting work is their fastest-growing service area, while the more mature market of audit is one of their slowest.
A wave of acquisitions including by Deloitte, EY and KPMG compound this perception, but EU reforms have imposed a 70% cap on fees generated by non-audit work.
Yet it is still suggested that these changes could become a catalyst for more people moving between firms.
“In some parts of the world retention is a real big problem,” says Gavin at the ICAEW. “The larger firms invest an awful lot of money on training people and they want the best to stick around,” he says.
But he adds that there is often an expectation that a high proportion of their accounting intake will eventually move onto new firms and careers.
Indeed, many MBA students are former accountants looking to branch out into more general management careers, says Naeema at Henley. “Joining a professional services firm is something that companies need to sell to MBA students, as a way of utilising the higher-level skills,” she says.
The sweeping changes to accountancy as a function have prompted the big accounting bodies to evolve their offering. Some of their curricula are now more akin to management degrees like MBAs.
“It’s critically important that those we train can see the full picture," says Helen at the ACCA.
At the same time, large professional services groups are bringing more school leavers on board, to increase diversity and to fill vacancies in a more competitive market.
This has called into question the value of an MBA or masters degree among budding accountants. But, as an increasingly challenging and sometimes cross-functional career path, the buoyant accountancy market has retained much of its allure.