level positions, a problem that has increased with regulation.
To maintain a sufficient supply of qualified accountants, a fundamental shift in the structure of entry-level accounting positions may be necessary, according to the council. Such changes will be difficult to achieve. For example, a five-year accounting graduate needs significant experience in practice before being able to act as a business advisor and consultant This experience requirement is not limited to the accounting profession-surgeons often study until they are 30 years old. Additionally, while new graduates desire nontedious work assignments, auditing can be tedious by its very nature. The gap between what students expect from the profession and what the profession expects from an entrant may be difficult to overcome. One way to help reduce this expectations gap is to provide accounting students with better information about the type of work they will be responsible for as new hires.
An important means of alleviating the shortage of qualified accounting professionals in the long-term is successful “branding” of the profession. Unlike the areas of law, medicine, and criminal justice, accounting does not benefit from visibility in the media. The council concluded that the depiction of accountants in the media is often negative or stereotypical, leading to a significant misconception about what professional accountants do. This can have a profound influence on young people.
To overcome this perception, the council suggests a branding campaign that emphasizes the exciting aspects of the profession and the many career paths available. The council also recommends increasing the visibility of positive role models in a variety of positions to emphasize the multifaceted nature of the profession. Such branding should depict accounting as an attractive career choice for college students.
The council made a number of recommendations that individual firms may wish to adopt in order to attract qualified current and prospective accountants. Among these proposals was a double internship model in which individuals would have an opportunity to pursue two different internships within the same firm during different time periods. The rationale was to provide a varied work experience. The experience of the authors of this article as college professors, however, indicates that students prefer to undertake a single internship and receive a job offer upon completion. In addition, smaller firms may be unable to offer multiple internships.
Recruiters can enhance their performance by adopting a common message, emphasizing the company’s vision and values, and highlighting appropriate role models. To achieve a diverse workforce, for example, firms should consider using a diverse group of recruiters. The council also recommends greater emphasis on flexibility in the working environment as a recruiting tool. If such flexibility (e.g., flexible hours, working from home, sabbaticals) is actually available, then it should be brought up during employment interviews; however, if this flexibility applies only to select employees, the issue should not be emphasized. The authors believe that the council did not put enough emphasis on flexibility in work arrangements as a recruiting tool.
Although the council suggests using an experienced human resources professional for recruiting, the authors’ experience as college professors indicates that students feel more comfortable with, and can better relate to, nonprofessional interviewers or former accounting or finance students. It may be helpful for recruiters to bring recent alumni to recruiting events. A council proposal to attempt to recruit individuals who are satisfied in their current positions is problematic because it is difficult to find such individuals, apart from personal referrals. The council proposes that significant bonuses be paid to any parties making such referrals. Many firms currently pay bonuses for referrals, a trend that has gained popularity in recent years. Several council members said they have increased the bonuses, which has increased the number of referrals. This method is particularly effective in recruiting quality candidates because current employees are generally reluctant to refer poor candidates because their own reputation is at stake. In addition, this method of recruiting is comparatively inexpensive.
Mentoring programs may also be an effective means of retaining staff. Many companies, including accounting firms, use mentoring rings, which involve a group of employees from different areas (e.g., tax and audit). Mentors can also be used to reemphasize the importance of the CPA exam, an accomplishment that is critical to long-term retention. A council member from Plante & Moran indicated that her firm uses two levels of mentoring: New hires are assigned to experienced staff, and partners supervise all staff members, who are assigned to teams. Partners and experienced staff are evaluated, in part, on their mentoring efforts.
Improvements and adjustments in compensation can also help retain current employees. The council recommends ranking employees into quadrants and grids, and tying incentives to such ranking systems. Microsoft, for example, uses a ranking system (10% in the top group, 70% in the middle group, 20% in the third group) for different layers of compensation, including such incentives as restricted stock options and bonuses. This system could, however, demoralize average performers and lead to excessive competition at the top. If a firm has few top performers, this strategy could produce morale problems, engendering higher turnover and productivity shortfalls.
Flexible work arrangements, allowing employees to work part-time or from home, can also improve retention. The council believes there is no one suitable flexible work approach; each arrangement should be employee-driven. These arrangements, however, may be difficult to implement, in part because firms must decide which employees are eligible (i.e., top performers versus other employees). Again, it seems to the authors that the council could place more emphasis on flexible work structures as a retention strategy.
Providing employment options for retirement-age employees may also alleviate staffing concerns. Many accounting firms enforce mandatory retirement policies to give lower-ranking employees greater opportunities to move ahead. To increase the number of experienced staff, mandatory retirement could be replaced with new work arrangements such as project-based roles, phased retirement, or cyclical work periods. This strategy seems particularly attractive, given the percentage of the workforce approaching retirement age.
Changes in management style and employee responsibilities may also improve retention. Management values and expectations may need to be modified to better fit the culture of the workforce. Supervisors should maintain open communications and transparency. Although beneficial, changes in management style are often difficult to implement; the example of the U.S. auto industry illustrates this point (Subir Chowdhury, “Changing Management Styles Put Their Mark on Industry,” Quality Progress, May 2000).
The current shortage of qualified accounting professionals can also be alleviated if the profession continues to focus on the new skills necessary to succeed in today’s working environment The council recommends an emphasis on interpersonal and critical-thinking skills. Although such skills are difficult to teach, they can be promoted or encouraged throughout a curriculum.
Oral and written communication skills are critical in accounting. While communication skills have long been incorporated into training regimens at international accounting firms, the council reemphasized the importance of these skills. The council suggests multiple methods to help young professionals enhance their communication skills, including organizing their thoughts before they speak or write. The communication method should also fit the circumstances; for example, instant messaging may not be an appropriate medium to communicate a sensitive message.
Critical-thinking skills are also important for professional development When making decisions, successful accountants must be able to analyze alternative options and evaluate the benefits and costs of each. Universities have spent much time modifying their curricula in recent years to place more emphasis on these skills. This means less attention is given to factual teaming, and more attention is given to discovery learning through experimentation and applications. Instead of right or wrong answers, the focus is on finding approaches to problems and decisions that do not lend themselves to simple solutions. The council stressed the importance of cross-functional teams in the workplace in developing critical-thinking skills on the job.
Ira Solomon, a member of the council and head of the department of accountancy at the University of Illinois at Urbana-Champaign, argues that critical-thinking skills can be nurtured by applying progressive teaching practices. These practices include encouraging preemptive self-criticism of judgments and decisions; focusing on the development of both left- and right-brain skills; stipulating one’s hypothesis fully; and asking for multiple solutions. Training designed with this framework can enhance employees’ critical-thinking skills.
An expanded partnership between the business and academic communities might also help reduce the current shortage of qualified staff. Specifically, the council calls for more meaningful involvement from corporate executives on university advisory boards. Such interaction may result in accounting and business curricula that better prepare students for the realities of practice. The academic members of the council emphasize that students would benefit from greater access to real-life case studies and projects. The academics also point out that students would benefit from access to the firms’ data for their own research. The council also called for more internships for accounting students and more funding from firms for innovations in accounting and finance education.
One key outcome of globalization is the harmonization of international and U.S.-based accounting standards. It is likely that the United States will continue to actively converge FASB’s GAAP to the IASB’s International Financial Reporting Standards (IFRS). SEC Chairman Christopher Cox has stated that the SEC will most likely allow foreign private issuers to choose between U.S. GAAP and IFRS. In addition, an August 27, 2007, concept release (available at sec.gov/rules/concept/2007 /33-8831.pdf) suggests that U.S. companies may someday be allowed to file financial statements under IFRS.
The ability to recruit talented accountants overseas is a potential benefit to increased globalizatioa The council reported that most U.S.-based accounting firms are not recruiting internationally, and recommended that they explore the international talent pool (both in Canada and across the globe) for potential employees. To attract international talent, recruiters must familiarize themselves with international talent markets and offer competitive salaries. In addition, an infrastructure that supports international collaboration must be in place. While a company