Accounting’s open secret has several names—the skills gap, the education bubble, the talent shortage. Regardless, the challenge has remained the same for half a century. Employers have a hard time finding the right accounting and finance talent, beginning at the entry level and extending all the way to the CFO. There just aren’t enough qualified candidates to fill new and existing positions.

The expectations of the CFO team in industry have long extended from value stewardship (e.g., auditing, statutory reporting, compliance) to value creation (e.g., financial planning and analysis, mergers and acquisitions), fusing competencies in accounting, finance, technology, operations, and leadership. The rising number of accounting and finance jobs has strained the talent pipeline even further; according to the U.S. Bureau of Labor Statistics, the profession should expect double-digit growth this decade.

These widespread hiring challenges have consequences. Research by the Institute of Management Accountants (IMA) and American Productivity and Quality Center (APQC) has found that hiring managers face increased time and recruiting costs to fill positions (“The Skills Gap in Entry-Level Management Accounting and Finance: The Problem, Its Consequences, and Promising Interventions,” 2015, Thus, they settle for less-qualified talent and overall diminished quality of work output. The talent shortage inhibits innovation and ultimately affects the overall livelihood of society.

Rooted in Education

For decades, the accounting talent issue has concerned industry associations and organizations, who point to a traditional accounting curriculum that has not kept pace with the evolving role of the CFO. The landmark 1986 Bedford Report, “Future Accounting Education: Preparing for the Expanding Profession,” sponsored by the American Accounting Association (AAA), found a “growing gap between what accountants do and what accounting educators teach.” It called for reform in the undergraduate accounting curriculum to keep pace with the changing needs of business.

More-recent research from IMA/APQC has found that, unfortunately, little has changed in the last three decades. In 2015, 90% of CFOs reported having a hard time finding the right talent, with deficiencies existing in both technical and nontechnical skills. Specific technical skills, including planning, budgeting, forecasting, and decision making, may be underrepresented or absent from the outdated undergraduate curriculum. The Pathways Commission, a five-year initiative (2010–2015) sponsored by the AAA and AICPA, identified accounting curriculum reform as part of its strategy to support the next generation of accountants. Following the Pathways Commission’s conclusion, the AAA established the Center for Advancing Accounting Education to further seek reform.

Solutions on Campus

The fundamental challenge with the traditional accounting curriculum is that it is too narrowly focused on financial accounting, particularly in audit, tax, statutory reporting, and compliance. While many new graduates often begin their careers at public accounting firms doing audit and tax work, the IMA estimates that within three years, half of those young professionals will leave public accounting to work in management accounting roles, where the work is more focused on value creation and advisory skillsets. Of the young professionals who remain at public accounting firms, many find themselves shifting to consulting and advisory roles. As a result, the skills learned as an accounting student serve many professionals for only a narrow window in their career.

To reverse this problem, accounting education should be oriented toward long-term career demands. Academic research by the IMA and the AAA MAS (Management Accounting Section) Task Force, including three papers, proposes an integrated framework approach for accounting education, combining accounting competencies with the foundational and broad management competencies needed in business ( Adoption of this framework will enable higher education institutions to best prepare students for long-term, diverse careers in accounting beyond entry-level audit and tax jobs.

In conjunction with curricula reform, students—who largely remain unaware of the opportunities that exist outside of public accounting firms—must be informed of their career options and encouraged to seek out a well-rounded course load and meaningful work experiences. Everyone in the education ecosystem must inform and prepare accounting students for career pathways over the long run, not just one job (e.g., in audit) in the short run.

Universities Partnering with Business

While outdated curricula remain a significant issue, companies must also engage with universities to be equal partners in developing the talent they need. It is incumbent upon finance professors, finance professionals, and industry representatives to come together and agree on what’s needed on the job and how it can be taught. This requires an integrated, long-run approach to careers and enabling competencies. In 2017, the IMA addressed this need by publishing its first-ever textbook, based on an integrated, decision-oriented framework of management accounting concepts and use of real-world scenarios.

Through these partnerships, organizations and education institutions will be able to align on internships for students to cultivate tomorrow’s business leaders. In addition, business leaders will gain a clear understanding of entry-level competencies so they can appropriately and efficiently allocate resources to continue their hires’ professional career development.

Continuing Professional Education

While curriculum reform can better position accountants for their long-term careers, no four-year program could ever teach professionals every skill they will need throughout their careers. Meeting the demand for new skills and closing the skills gap requires that management accounting professionals proactively seek continuous education and relevant professional certifications, including the IMA’s Certified Management Accountant (CMA) credential for accountants working in industry.

As on-the-job demands increase and time for continuing education is squeezed, professional associations are responding by offering options for “nanolearning” (short-form learning in varied formats) and specialized credentials, in part to support the emerging “gig”/freelancer economy. These options allow professionals to develop their skills in more compact increments than traditional credentialing. For example, the IMA has addressed the need for specialized credentials with the recent introduction of the CSCA (Certified in Strategy and Competitive Analysis) credential for CMA-certified professionals.

The Future of the Profession

The skills gap in accounting and finance has limited the potential of the profession for more than three decades, but closing it has never been more critical. Advancements in technology—automation, artificial intelligence, and the preponderance of data—require new skills from accountants. Viable careers in accounting increasingly require higher-level skillsets in areas that aren’t easily automated, such as complex decision support, strategy, and communication. The day will come soon when accountants will need to be competent in data science to leverage and harness the power and potential of artificial intelligence (i.e., robots, cognitive computing, machine learning). Once again, the key is an integrated approach to curricula, competencies, and training that aligns with the way business is actually conducted for sustainable value creation.

If steps are not taken to address the skills gap, the accounting profession could be left behind in the next 10 years. Digital disruption where entire value chains are being digitized (“the Internet of things”) can be transformed into enriched jobs and opportunities for a new breed of accountant. To ensure the future of the profession and give accountants the opportunity to be value-adding business partners, it’s time to finally close the skills gap.

Jeff Thomson, CMA, CAE is president and CEO of the Institute of Management Accountants, Montvale, N.J.