“It is very exciting to work with the new generation,” says Alex van der Watt, auditing lecturer, Head of the Department of Accountancy at the University of Johannesburg (UJ) and education specialist on the board of the South African Institute of Chartered Accountants (SAICA). “When I studied we more or less just accepted what professors said. There is a new generation now, which is challenging the way things are. They are the CFOs of the future.”
Education institutions like universities have to be quick on their feet to adapt to the changing demands of their talented learners, says Van der Watt. "The world of the post-modern generation is more or less built on IT. The challenge for the academia is to incorporate IT without compromising quality of education. The young people of today don't particularly like paper, but I think we need to be very careful not to run all academic courses on an IT platform only. It is important to acknowledge that nothing can ever replace face-to-face contact."
Van der Watt finds the new generation - often dubbed Generation Y - less money driven than his own age group and the preceding Generation X. "Money surely still is a motivation, but for generation Y it is not necessarily that important. It is not necessarily about money or prestige, but more about the difference people can make. Sustainability is an important issue." Although becoming a Chartered Accountant is still a sure route to a successful career, Van der Watt has noticed that the youth have other things on their minds. "They are more interested in work-life-balance. Already at a young age people start saying 'it is not all about work, family and friends are important too'."
At the same time - simultaneous to the Generation Y development - Van der Watt finds some students less patient. "These days, people are looking for quick wins all the time. Students also live in a consumer-orientated world where much is often treated as consumables. So, in the academic environment they also want instantaneous results and the motivation to work hard for it is sometimes lacking."
"Another characteristic of Generation Y is that they do not just accept the current system and way of doing things. There is sometimes a lot of distrust in the system. They demand transparency and accountability." says Van der Watt. "Off course all of this is very positive and impacts on how universities operate in terms of for instance the fairness of assessments and results".
A few years ago SAICA research estimated a shortage of 22.000 skilled high, middle and lower financial professionals, ranging from CFOs to Financial Managers and bookkeepers. One could argue on whether that is still the most accurate representation of the job market, Van der Watt says. "I sometimes hear contradictory views regarding what is referred to as the skills shortage. In the past South African companies maybe got spoiled with CAs in all their accounts positions and whilst it would be difficult to argue that a skills shortage does not exist, the debate must maybe move to the level of accountants required and how the specific shortage can be solved."
In May Van der Watt was appointed by Finance minister Pravin Gordhan to the eight-member Independent Regulatory Board for Auditors (IRBA). According to the lecturer, auditing firms - the biggest employers of CA trainees, are becoming more effective in how they perform audits which might impact on the number of spaces available for people to do their articles. That doesn't mean prospects are becoming dire. "As a prospective CA you are still almost guaranteed to get a training contract and a job after qualification as a CA, although it might not immediately be what you are looking for."
The biggest challenge for SAICA and universities is transformation, delivering more black chartered accountants and finance experts to the job market. "It is an area where we cannot fail. Of 13 universities accredited by SAICA, UJ currently produces a quarter of black prospective CA's who have passed their first qualifying examination. We have to get it right and it is crucial that CFOs understand their role in grooming black talent. Hopefully we'll have more black CFOs soon."
For CFOs to be business leaders, skills other than hard, technical accounting ability are needed, says Van der Watt. "Technically South African CA's are of the strongest in the world. That may be one of the reasons we were spared the corporate collapses we saw elsewhere in the world, but being a CFO requires certain skills not necessarily developed through education in the past, soft skills like leadership and communication." SAICA recognized this and changed focus a few years ago. "There is now a lot of focus on softer - or what SAICA calls pervasive - skills. More attention is also given to other elements like strategy, risk management and governance. The final qualifying examination for prospective CA's is also changed to an assessment of professional competence, which takes place for the first time in November 2014. These are exciting changes."
According to Van der Watt it is crucial for CFOs to understand how their role keeps changing. "There are drivers of change that potentially could affect the ability of CFOs to add value to the organisation. The challenge for any CFO is to balance an increased focus on corporate governance, IFRS compliance, and what can generally be referred to as a legislative onslaught with entrepreneurial and innovative thinking. A culture of governance and compliance should be developed rather than CFO's just following a tick box approach."
"The difference between average and high performing CFOs is that average CFOs just fulfil the traditional role, concerning themselves with numbers, annual reports and auditors. They do not support the business and the CEO as would a high performance CFO, whose first priority is planning and strategy. An average CFO cannot get the balance right, while high performance CFOs understand the role of corporate governance and compliance, but don't let it hamper the business - it almost stimulates the business. You need to be able to work with people, influence people, show persuasion and be confident."
If you also would like to share your ideas with the CFO community, please get in touch with us to arrange an interview with you.Please contact Jurriën Morsch on [email protected].