Addressing the digital skills gap in finance and accounting

The Covid-19 pandemic has seen businesses increasingly use digital services to either work from home or to cater to increasing digital demands from clients. However, this greater need for technology and digital (T&D) skills has lifted the lid on a digital skills gap within the accounting and finance profession.

A recent global survey by BlackLine Inc. revealed that 31% of global CFOs don’t have enough people with software and technology experience within the finance function. It identifies a major skills gap that “threatens” F&A’s ability to provide the consultancy, analysis, planning and due diligence required to support broader business goals, as only 20% of respondents express confidence that F&A currently has the right skillset.

With a rising need to address the skills gap within the accounting profession, some of the UK’s leading accounting firms are taking steps to tackle the issue head-on. In a recent announcement, RSM UK recently launched a digital upskilling programme in partnership with BPP University, in a bid to form a “substantial investment” in data analytics skills to improve digital service delivery for its clients. Similarly, Mazars announced last week the creation of a new T&D centre of excellence in Newcastle to cater for the “talent and energy in the North-East” and to “support a strong national capability across the UK”. 

But why is there a sizable skills gap in the industry? Chris Knowles, chief digital officer at RSM UK, believes the issue is actually broader than the industry, and is something that is UK-wide. He says the issue has been “accelerated” by the demand for digital solutions during the pandemic, but it was already seeping through the industry before Covid struck. “I think the way in which the talent market goes through the educational system doesn’t necessarily prepare it for the demands of data and digital skills that employers have. It’s been a long-standing challenge in the UK, exacerbated by the significant demand for digital skills as a result of Covid,” he says.

He maintains that the accountancy sector hasn’t been transformed by digitalisation in the way other industries have, such as retail, but a change is imminent. “We are still playing catch up to a certain degree. We’ve been guilty as an industry at still focusing too much on the technical skills of audit qualification, tax qualification, and so forth, which are still very relevant and important, but they really need to be supplemented by data and digital skills, and that’s definitely what we’re trying to do here.”

Similarly, Asam Malik, partner and head of Technology and Digital at Mazars, explains that there is a “real war for talent” and a “huge demand” for technology services, which has not only been driven by people increasingly working from home but also because “organisations want to automate and go digital”. Malik says: “This is illustrated by the fact that our Technology and Digital Team has more than doubled in size over the past year. The demand for these services will only increase but finding people with the right skills is challenging.”

The development of digital, data and analytic skills are becoming increasingly important for the industry in response to client demands, Knowles explains. “They want to see automation of the more routine work that we used to do around compliance, and they want to see that made more efficient. There’s also the opportunity for us to help our clients to digitalise themselves, and they’re increasingly turning to their professional services advisor for that.”

Moreover, with the direction of travel around continuous audits and Making Tax Digital (MTD), Knowles describes “a real need for our profession to develop digital, data and analytic skills” as MTD has “put a significant onus” on accounting firms and tax advisers to ensure they have right skills and tools to analyse and process tax data “down to the transaction level”. 

According to BlackLine’s research, 36% of overall respondents note that it is difficult to find candidates with both technology and F&A skills, and 30% of CFOs cite acquiring new talent as their greatest business concern for the next five years. BlackLine asserts this concern is “likely being driven by a skills shortage within F&A”.

By creating regional centres of excellence, Malik says Mazars is “hoping to tap into the great resources we have in the North East that want to live locally and that don’t have to move to the South to progress their careers,” ultimately increasing accessibility to the talent market.

Meanwhile, as part of RSM’s new programme, the firm is attempting to create a “significant uplift” in digital and data skills across the company, starting with data literacy training for all RSM UK staff, including the CEO, all the way down to graduates and school leavers. Knowles shares that the service-specific data literacy includes audit tax, transaction services, and the development and rollout of data visualisation standards “to ensure consistency” for clients, and consistency within the firm itself.

Additionally, RSM has introduced a number of advanced training courses around data, analytics, and machine learning with a series of apprenticeship schemes introduced in numerous parts of the business, and an optional Master’s postgraduate degree in advanced data and data and analytics. Knowles says RSM is bringing in people that don’t already have a relevant degree, and taking them through concepts such as agile software delivery, basic programming, information security, as well as data and analytics.

Meanwhile, Mazars’ new T&D centre is set to train and develop staff, and to collaborate and partner with local technology companies and universities. “We hope this will give our clients a better service but also build and support the technology sector in the region,” says Malik. By harnessing these skills, “clients can expect to see more tailored technology services to each local market. They will also get consultants that really understand the local market that they can build long-term relationships with and can access quickly”. Malik adds that Mazars “expects the centre to raise the profile of the skills we have in our firm not just in technology but across all services that we offer”.

But with all of this in mind, you might be thinking “what is the current state of tech and digital skills in the industry as a whole?” As Knowles explains, the accountancy industry was “somewhat behind” other sectors until fairly recently, in terms of tech and investment in digital skills. Knowles ascribes the delay partly down to risk aversion: “We’ve been an insular industry but there’s a lot more interchange of skills now with other sectors, and we’re certainly benefiting from that. Moving beyond that introversion is extremely important for our profession, and recognising that the digital skills which are important to other industries are equally relevant to us,” he says.

Looking to the future, Knowles forecasts a trend towards increasingly delivering professional services online, with growing demands for working with larger datasets. He says there is a need for firms to interactively present financial results online, “so not just sending reports attached to an email in PDF or in a flat file, but actually presenting interactive, drill down dashboards. And I think that’s where our sector is going and that’s definitely where we’re going as a firm”.

He adds: “We’ve got to make sure we aren’t being too risk averse. We’ve got to experiment, and we’ve got to try things out with regard to digital innovation. We need to be more mindful, perhaps of risk management because of the sector that we operate in, but unless we do that, we’re going to be subject to increasing threats from competition from the software sector, for instance. But more importantly, we just won’t meet the increasing needs of clients.”

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