While talent recruiting challenges are visible across all industries, they are particularly significant in the financial services sector.
According to a PwC report on the talent supply in the field, more than 25% of CEOs said they had to abandon or postpone a crucial strategic initiative in the last 12 months because the proper people were not available to execute it. This is not a new issue - businesses around the world have struggled to recruit qualified employees for a long time.
A combination of factors make recruiting for the accounting department difficult but there are several things businesses can do to identify and screen top talent for these critical business roles. Read on to learn how pre-employment accountant applicant screening can help to spot the most suitable candidates for accounting department positions.
In this article, we address:
- Accounting Skill Shortage as An Ever-Growing Issue
- Consequences for Employers
- The Unreliability of Resumes
- Battling Misleading Resumes with Candidate Screenings
- The Era of Pre-Employment Skills Tests
Accounting Skill Shortage as An Ever-Growing Issue
Several years ago the American Productivity & Quality Center and the Institute of Management Accountants surveyed finance and HR/recruiting professionals. The survey asked about the state of entry-level management accounting and finance talent. The findings showed that there was a skills gap in accounting and finance departments, in both large and small companies, regardless of where these companies were located – in the US or other countries.
APQC’s survey also revealed discrepancies between the competencies required by companies and the skills possessed by entry-level employees. Study participants agreed that there was a significant competency gap that needed to be addressed to limit the repercussions on their organizations.
The survey participants suggested that improving coordination between finance professionals, educational institutions, and professional associations would be one solution. These findings suggested a need for stronger, more personal relationships between the university departments that educate finance professionals and the organizations that employ them.
According to the study participants, it was difficult to attract skilled graduates to the management accounting and finance area because of the perceived lack of career paths. As a result, the most promising solution was to create such career paths for these employees. Due to the scarcity of suitable individuals in local labor markets, almost all companies in the survey had trouble finding candidates with entry-level accounting and finance skills.
Skills Shortage: Consequences for Employers
The impact of skills shortage can include increased spending, reduced productivity, and lower work quality.
In the APQC’s survey on the skills gap in entry-level management accounting and finance, almost half of survey participants reported experiencing increased time to fill entry-level positions. Also, nearly 33% were experiencing increased recruiting costs, and just under one-third were hiring under-qualified candidates to fill entry-level positions.
Entry-level hiring issues were found to potentially be harming the morale of mid-career and entry-level finance professionals, in addition to affecting the finance function's performance and budgets. According to the study’s findings, companies with more entry-level hiring problems had lower job satisfaction among entry-level employees than those with fewer challenges.
In addition, half of senior management accounting and finance professionals were content with their positions, compared to less than one-third of mid-career professionals and only one-quarter of entry-level professionals. Skills shortages can contribute to reduced job satisfaction among entry-level and mid-career finance personnel, among other reasons such as a lack of career growth options and unacceptable entry-level wages.
Are Resumes a Trusted Source of Truth?
Resumes are the currency of recruiting, as they are required by job sites, recruiters, and hiring managers. At least initially, resumes can be the sole factor of whether an applicant advances or not in the recruiting process. As a result, it is critical to understand the strengths and shortcomings of resumes.
For several years, many authors have been predicting the downfall of the resume. Still, despite their numerous flaws, resumes remain an important part of the candidate evaluation process.
Resumes are essentially self-reported narrative summaries of the candidates' past work, rather than the objective information that hiring managers need to evaluate someone (examples of a candidate's actual work or a description of what they could perform in your job).
Because of the candidate's bias and selective recollection, he or she may give a less-than-accurate account of what happened. Resumes, being simply job histories, fail to inform hiring managers about the applicant’s personality, how they would perform in the position or their potential.
One major drawback of resumes is that negative information is typically omitted. Regardless of experience and the career path that was chosen by the candidate, people tend to make mistakes, which are never displayed on a resume. For example, if someone received a poor performance evaluation, had been fired, or failed a project, it will rarely be included in their resume. And even if this information is discovered later, many early-stage recruiting decisions will, unfortunately, have been made based on this inadequate data.
Unreliability of Resumes: Lacking Honesty
Regardless of the position, previous experience, or the organization a candidate is applying with, applying for a new job can be stressful. A recent report says that the stress of applying for a job is a factor leading to the majority of applicants lying on their resumes in order to stand out.
According to Checkster, a reference-checking company, 78% of candidates who applied for or received a job offer in the previous six months admit to or would consider lying on their application. Applicants' resumes are frequently deceptive or lack crucial information, posing a substantial problem for hiring managers.
When looking for the most common lies told throughout the recruiting process, Checkster’s survey discovered that applicants are most likely to lie on their resumes in these ways:
- Possessing a skill that they seldom utilize (ex: Excel or a foreign language): 60%
- Working at a company for a longer period of time than they did, in order to omit a previous employer: 50%
- Having a GPA that is more than half a point higher than actual GPA: 49%
- Having a Director title when their actual job title was a Manager or similar: 41%
- Earning a degree from a prestigious university while actually a few credits short: 40%
Applicants presenting themselves as having a skill they do not actually have is the most common resume falsification according to Checkster’s survey. This is a particularly dangerous falsification when it comes to hiring for accounting positions that rely heavily on the usage of Microsoft Office programs and Microsoft Excel in particular.
Going Concern contributor John Prumatico offered his thoughts on how accounting applicants may not be correctly handling their resumes by outright misrepresentation, which again puts both them and the recruiters at a disadvantage in the hiring process. He gives a few key points that accounting applicants should pay close attention to:
- Résumé fundamentals
- Contact information
- Technology skills
According to Prumatico, some accounting applicants' resumes could do with a little more attention to detail. Candidates often use a variety of fonts and font sizes, preferring to use a template rather than creating a resume from scratch, and rarely write down details such as their current address and a current phone number.
These are minor details, but they make a huge difference when skimming through a resume. It's critical to keep things short and to the point. Candidates should not include a list of all college courses they have taken, nor should they highlight their GPA unless it is outstanding.
The experience section should be organized in reverse chronological order, with the most recent experience at the top. Including detailed job descriptions and responsibilities will be valuable. Furthermore, all technology skills should be listed separately, which is where applicants can describe their ability to work in various applications such as Microsoft Office, QuickBooks, Dynamics, PeopleSoft, and others.
Finally, before sending/uploading their resume to a recruiter, applicants should proofread their resume thoroughly. They should double-check that all items are in the correct sections and that there are no overlaps, or that if there are, they have a good explanation for them. Hiring managers will be quick to pick up on overlooked details.
Candidate Screening: How To Battle Misleading Resumes
Yves Lermusi, the CEO of Checkster, claims that candidates may think exaggerating their skills is a simple way of getting away with it during the interview process, as it's difficult to check unless there are skills tests involved. Furthermore, candidates may believe that prospective employers will not verify employment experience with their previous employer.
Hiring managers, on the other hand, appear to be forgiving of candidates who falsify information. Only one-third of hiring managers would never hire a candidate who lied on their resume, leaving 66% of hiring managers eager to hire someone despite exaggerated claims. The majority of hiring managers willing to issue a job offer to a dishonest candidate startled Lermusi, but he blames the tight labor market for hiring managers' drive to fill vacancies, even if they detect an applicant misrepresenting themselves.
Lermusi believes that these outcomes may potentially be discouraging to accounting applicants who are looking to find work. “After all, if the majority of applicants are falsifying their resumes, won't they appear to be more credible than you?”
Employers, on the other hand, will hopefully be able to tell the difference between honest and dishonest candidates based on reference checks, background checks, skills tests, and other methods. Nonetheless, Lermusi says that applicants who are hired based on false information are unlikely to stay in those positions for a long period of time.
The Era of Pre-Employment Skills Tests
While resumes can be ideal for describing skills, they can be ineffective when it comes to actually determining candidates' skills. In addition to that, resumes often do not differentiate between skills, such as knowing how to do something, and competencies, which is doing something well, with mastery.
Over time, more companies started getting on board with the idea that resumes were not sufficient to properly select the best possible candidate and started incorporating different types of applicant screening. Screening would take place prior to the interview itself, to make sure that only skilled candidates had the opportunity to land a job. For accounting roles, accounting skills assessment tests are essential, as accountants cannot provide a work sample like a copywriter, digital marketer, or graphic designer can. Comprehensive skills tests are the best way to understand the skill levels of accounting applicants.
Pre-Employment Tests: The Best Solution to Expedite Accountant Applicants Screening
Pre-employment tests are the logical step when organizations want to improve their hiring processes and reduce the time needed to spot the top talent. In addition, they can eliminate the unconscious bias of recruiters, and analyze actual skills as well as workplace behavioral traits of applicants. Pre-employment testing can give hiring managers standardized feedback so they can make data-driven decisions, rather than rely on the personal impressions of the hiring team.
When pre-employment tests are implemented at the beginning of the hiring process, they can save much time for both hiring managers and applicants. Pre-employment accounting tests, including pre-employment math tests, and screening procedures can be more important than a resume when it comes to finding the top talent accounting candidates - for in-depth information on which tests to apply depending on the position you're hiring for, see "Accounting Assessments: Which Tests to Use for Each Job Role."
Accounting and finance teams play a critical role in every company, which is why team members have to possess the quantifiable and undeniable knowledge needed to perform well. And even though resumes (and interviews) have long been the currency of recruitment, relying solely on them is no longer an option. Resumes tend to overemphasize applicants' positive past experiences while omitting all negative information. As a result, when it comes to accountant applicant screening and hiring, businesses should use pre-employment skills tests, to guarantee a full understanding of the applicants’ skillset.
EmployTest specializes in developing pre-employment tests for different industries and business functions, including accounting and finance.