Insurance organizations are facing a perfect storm within their finance and accounting departments. Increased accounting-rule changes and regulations are driving insurers to grow their current finance and accounting departments. In fact, the accounting sector boasts faster than average job growth. Currently, the U.S. Bureau of Labor Statistics projects an 11 percent growth by 2024—representing the addition of 142,400 new jobs. Unfortunately, this growing demand is being met with an increasingly shallow talent pool of experienced professionals.
Much like the overall insurance industry, the accounting and finance sector stands amid a growing labor crisis. Currently, 72 percent of recruiters report having difficulty filling open finance and accounting positions. A number of key factors are driving this talent shortage, including a rise in retirements, a fierce entry-level market, an increase in employee turnover and an emerging skills gap.
According to the American Institute of CPAs (AICPA), more than 75 percent of today’s professionals will retire by 2020. This ranks among the highest percentages of any field within the same timeframe. This mass exodus of tenured talent has led the sector to increase their young professional recruitment activities.
Driven by recent efforts of schools and accounting firms to market accounting and finance as a career, undergraduate accounting programs are seeing a record level of students. Enrollment recently reached an all-time high, crossing the 250,000 threshold for the first time. Despite the record number of enrollments and graduates year-over-year, the competition for accounting grads is fierce.
Currently, 82 percent of employers are looking to hire graduates with business/accounting degrees. The most recent AICPA statistics showcase a 7 percent increase in accounting graduate hirings, with a record 43,252 hires. In addition, 91 percent of firms are planning to hire at a similar or higher rate in the coming years. As a result of this growing demand, the majority of accounting students have jobs secured before they even reach graduation. Organizations are now looking at two-year accounting graduates and even expanding their outreach to high school students in order to secure talent.
Unfortunately, these new entrants into the profession have a much higher turnover rate than their predecessors. In fact, the average young professional will change jobs four times before the age of 32. Within the accounting and finance sector, the estimated average turnover is 17.2 percent—compared to 12.8 percent in the overall economy.
Further adding to the growing shortage is an emerging skills gap. While companies are able to replace open positions, they are struggling to replace experience. Nearly 80 percent of the workforce is filled by Millennials, many of whom have less than five years of experience. In addition, there is a growing mismatch between the skills students learn in school and the skills CFOs are looking for. According to a recent survey, 48 percent of employers report difficulty finding candidates with the necessary technical competencies and hard skills while 38 percent report a lack of workplace competencies and soft skills. This mismatch is adding to employers’ concerns about finding qualified professionals to meet increasing demands.
In order to combat these growing talent challenges, insurers need to take a look at their current recruitment and development practices. Recruitment should be focused on addressing the key perks and benefits sought by emerging professionals. In a sector with the stereotype of long hours spent number crunching, promoting a culture of work-life balance, cross-department development and innovative project opportunities will help organizations compete for in-demand talent. Additional training and updated development opportunities should be implemented to provide these entry-level professionals with the background and skills necessary to fill the impending gap.
But what if your organization has an accounting/finance position that needs to be filled right now? Many insurers are turning to contract subject matter experts to address immediate needs. Partnering with a staffing firm—particularly one with an insurance industry focus—provides organizations with access to a bench of highly-skilled professionals that can be called upon to provide a stop-gap while a permanent position is filled or to offer hands-on expertise for special projects and assignments. These highly-skilled individuals are a unique solution that allows organizations to bring on experienced accounting and finance professionals who can quickly jump in and get started.
How is your organization addressing the growing shortage of accounting and finance talent?