As CFO Selections celebrates its 20th anniversary of providing business owners with senior finance and accounting services, I want to help business owners and hiring managers understand the challenge faced in hiring accounting employees in 2022.
Unfortunately, this challenge is not going to disappear after this year. Today I will provide some ideas later to overcome the challenge, … but first, we must understand why we have this challenge.
The “why” is what I call the lack of a “central point” and the significant demographic shift in the number of people who obtained accounting degrees (a topic we have highlighted before). The lack of a central point may never return, and the demographic shift will probably take ten more years for the market to improve for supervisory and management positions in accounting. And the increased salary costs of replacing a person with 30+ years experience with less than 20 years experience is not going away for a very long time.
First: go back 20 years when CFO Selections started in 2002.
2002: Not only had 9/11 shaken the foundations of our country a year earlier, but the dot-com boom that had busted by 2002 had helped introduce and accelerate significant changes in how people interacted with media and information. These changes 20 years later have made it very difficult for companies to hire employees, not just accounting employees.
I describe the changes as the loss of the “central point.”
In 2002, cable TV had undoubtedly become a new form of accessing entertainment by 2002. Yet, network TV still had some significant influence in shaping and entertaining the minds of the masses.
In 2022, with the advent of streaming TV, not only has network TV seen further declines in viewership, cable TV is now highly fragmented.
Go back 50 years and compare it to today; you will see what I mean by losing the “central point.” Look at the size of the viewership of a TV show from 1972 to 2002 to recent times. There are now hundreds of choices through cable TV, streaming, and old-fashioned network TV, there is no longer a central point for a collective sense of understanding.
Why is the lack of a dominant TV show relevant to hiring employees? I use this example to point out how difficult it is for companies in America to find a message that will appeal to prospective employees. The wide variety of TV, Internet entertainment and news choices has created an environment where people can find their specific area of interest on multiple devices.
They are not forced to accept three or four choices and then observe how a collective will starts to say, “this is a great show; you must watch it.”
Or how a famous TV show catchphrase makes its way into everyday conversations, and everyone knows what the other person is referring to.
In today’s world, people find their narrow interest group and gather together to make a particular show popular – a far smaller group than 20 years ago, and certainly more than 50 years ago.
In the interview process, and even day-to-day working with people, there are no longer catchphrases that virtually everyone knew, that created a mutual sense of belonging or togetherness. Thus, a 50-year-old who is interviewing a 20-something or 30-something candidate no longer has a central point that people did 20 and 50 years ago.
Job advertising – here comes the obvious change, but you must be old enough to understand what happened.
By 2002, the newspaper industry decline was well underway as being a source of news and the place people went to when looking for a job. During the pre-dot-com boom, when a person was looking for a job, they looked in the classified ads in the newspaper. And of course, when a company was hiring, it put ads in the newspaper. It was a very efficient process as a “central gathering point” because both sides knew what to do and went to the same place. Yes, maybe there were two major newspapers in a city, so one had more ads than the other, so job seekers bought two Sunday newspapers just to be safe. But in doing so, they were sure to learn about “all” the job openings.
In 2002, there were two major online job boards, Monster and HotJobs. Then came other companies launching job boards. Suddenly, companies had to decide, where do I post a job? And people looking for a job had to determine which job boards to view. What seemed to be the go-to job board in one year started to fade away in a few years. By 2002, the loss of a central point to tell people you had a job to fill and for people to have one place to find a job was well underway.
In 2022, it is the same story but with different names. We are bombarded by Indeed and ZipRecruiter ads; just like 20 years ago when Monster ads dominated on TV. And there are niche boards by industry. When someone looks for a job, what job board should they choose? And yes, they can look at a company’s website, but it takes a long time to look at 15 company career website pages and find the potential job opportunity with a perfect fit.
The best “go-to” place for job seekers and companies is currently LinkedIn. LinkedIn has also become a go-to place for recruiters find candidates. Note, LinkedIn has not become the job board where every company posts a job. Nor is LinkedIn the one job board that every person goes to find a job. Looking back to 2002, there was no central point for recruiters to find candidates, and in 2022 the best “central point” is, in my opinion, LinkedIn.
The COVID-19 pandemic has dramatically increased people wanting to work some or all of their time from home. Notice how I said the word “increase,” as the concept of working from home is not something new in 2022, nor was it new twenty years ago in 2002. There was a time when remote work was known as “telecommute.”
For many years, people in specific jobs have wanted the option to avoid driving to work every day. For companies with multiple locations around the United States, and the world, the concept of a person working in a different location other than their boss/supervisor is not new. Larger companies installed expensive video conferencing technology in their offices for people to “see each other” – and now we have Zoom.
What has changed is all at once millions of people experienced working from home, and companies gained new insights about how it could work. Thus, we are in a period of assessment to strike the right balance – to meet the needs of individuals and the needs of a business.
Just as the loss of a central point of TV entertainment eliminated a significant sense of collectiveness, the loss of a central point for job seekers to go has created tremendous inefficiencies in hiring employees.
We noted the drop in accounting graduates in the United States from 1998 to 2008. This created a permanent drop in the number of people now in their mid-30s to mid-40s who have the education required to meet the qualifications for a meaningful position in an accounting department.
What should you do?
Summary: There is no central point for a sense of connection or place to find a job. However, there is an increasing importance of remote work to staff, and there are fewer people with accounting degrees.
This may sound dire, but there is a way out of this quagmire, and it requires thinking differently about how to hire people and how to structure your finance and accounting department in a small to mid-size company.
- Thinking differently is about realizing that you must spend time finding employees as an employer – you cannot rely on people applying. I noted earlier that there is a new central point (Linkedin) with hundreds of millions of viewable work profiles. It means you, as an employer, can look for a potential employee and reach out to them – but this takes time. If you don’t have that time, you must engage an external recruiter to help you. (Reach out to me on LinkedIn here)
- Thinking differently includes determining the importance of your accounting and finance team to work in a physical office. If their job is mainly interacting with customers and vendors by phone, email, and web-based communication programs, those outside people don’t know or care where the staff is sitting. I am not saying every job has to be 100% remote to attract employees. Still, if you are not offering at least a hybrid work environment for many of your accounting positions, you are likely losing out on some outstanding employees.
- Re-think the positions. It may be that some of your positions are part-time, not full-time. Your Controller may only be spending about 50% of their time as a Controller and 40% transactional work.
- The same goes for a position you may have been calling CFO for 20 years, but in reality, the role is 85% Controller and 15% CFO.
- Or the Accounting Manager is spending 60% of their time processing transactions.
When a position becomes vacant, take a step back and contemplate the idea of taking that position and having two people do the work, but each focused on their core area of expertise.---------------
Between The ASP Team and CFO Selections, we have hundreds of consultants filling the roles of a part-time bookkeeper to an Accounting Manager, a Controller, or CFO for hundreds of companies. Please reach out if you have questions or need assistance!
About Alex de Soto
Since 2008, he has spent most of his time helping CEOs and CFOs of Pacific Northwest-based companies find that unique match they seek for a CFO or Controller.