A hard look at soft skills

Is the quantity or quality of human resources scarce? Recruitment agencies, today, have a more tedious task when it comes to filtering through applicants’ CVs. They simply cannot put forward to their clients, accountants with just a degree and solid technical knowledge. Rather, companies look for soft skills such as the ability to persuade and influence, and the talent to demonstrate non-technical attributes in their everyday work with their clients and their teams.

“Soft skills are no longer just an add on or a nice to have”

Firms are on the lookout for professionals who not only have the ability to perform well but who, more importantly, have the leadership potential and the ability to work well in a variety of different environments with a diverse range of colleagues and clients world-wide. In a nutshell, professionals need to be able not only to contribute to their specific role but also to participate actively in seeing the business strategy coming to life.

Soft skills are no longer just an add on or a nice to have. Professionals who lack these skills may not be able to climb the corporate ladder. In a recent survey conducted by Accountemps (a Robert Half Company), chief financial officers were asked to identify the most common reason their employees failed to advance and poor interpersonal skills was the top reason cited.

Why is such a premium being placed on soft skills? What has driven this change?

The business world has been putting enormous pressure on the employee market to develop their interpersonal skills and the accounting professional cannot escape this reality. With the evolution of the role of the accountant and its many facets, the portfolio of skills and attributes that determine professional success has transformed too.

Today’s complex business environment has placed much greater demands on financial professionals to both complete their work and provide guidance to non-finance colleagues based on their analysis. Several factors are driving this trend. To begin with, companies are generating unprecedented amounts of data and must rely on their finance teams to analyse it and then tell an easy-to-comprehend story behind the numbers to colleagues and executives. As a result accountants are broadening their employability to diverse roles requiring a portfolio of skills which can be broadly split into 4 categories: data gathering, data analysis, decision support and decision-making. It is within the latter three categories that it is particularly crucial for a company to identify accountants with strong interpersonal and communication skills. An accountant has to live up to the expectation of a trusted business advisor – a consultant who can interpret numbers and influence strategic moves e.g. from identifying ways to manage costs and grow profits to assisting human resources, to drive operational decisions, to influencing marketing initiatives etc.

“With the evolution of the role of the accountant and its many facets, the portfolio of skills and attributes that determine professional success has transformed too”

The annual departmental strategies and plans also offer a glimpse into the pace and magnitude of change enacting on the finance functions. Not long ago, the budgets, plans and strategies submitted annually to management would guide the company’s activities during the subsequent 12 months. Today this does not happen – plans change in the middle of the first quarter or even on a day-to-day bases. Although these changes rarely qualify as complete overhauls, they still require sudden shifts and a high degree of flexibility. The drivers of this volatility are well-known. The pace of global regulatory changes has remained swift since the passage of Sarbanes-Oxley and similar legislation and regulations around the world more than a decade ago. The Dodd-Frank Act in the United States, Solvency II in Europe (and possibly in China, which is considering a similar framework) the European Union (EU) Data Protection Directive, among many other new and emerging rules changes, represent only the latest compliance challenges. More rules changes are inevitable.

“Professionals are expected to operate with the same agility that their companies need to operate with.”

The pace of change also has intensified as the business world has grown more global and more interdependent. If what happened in Greece occurred 15 years ago, it would not have the impact on the emotional mindset of the EU consumer that it exerts today. Regulatory changes, economic headwinds and the interconnectivity of business require most companies to operate in a more agile manner so they can quickly elicit threats and exploit opportunities. This dynamic forces the financial professional to remain vigilantly informed of the latest global developments affecting the company and of how the company intends to respond to external drivers of change. Professionals are expected to operate with the same agility that their companies need to operate with.

Emotional Intelligence

Which soft skills are the new hard skills?

Dennis Nally, the US Chairman and Senior Partner at PricewaterhouseCoopers, admitted that whereas in his early days in his career he only thought success was attributed to undertaking challenging work, he concluded that there are 4 Q’s of Career Success: IQ, CQ, PQ and EQ. Whereas IQ does not require much explanation, CQ refers to cultural intelligence and this is obvious when one continues reflecting on the global world we are living in. PQ refers to an innate feeling which one demonstrates and which is one trait perhaps that you can’t cultivate – it’s passion! The last and perhaps the one which can help us pin down the meaning of soft skills is EQ – Emotional Intelligence. Daniel Goleman, co-director of the Consortium for Research on Emotional Intelligence in Organizations, popularized this concept in the 1990s. There’s been a lot written on this topic, and the focus is about the importance of self-awareness and taking control of one’s emotions. The good news about EQ is that it can be practiced and learned.

Individuals who have a high EQ listen and are open to feedback, have both intra and inter personal abilities. This means they can influence both themselves and others. They can be very self-critical and more importantly, they apply that feedback and focus on continuous improvement. They can admit when they’re wrong. They willingly step out of their comfort zones, take risks and are quick to adapt to change. They are people we like to work with, because their quiet confidence is stabilizing and promotes teamwork. They’re not threatened by the success of others. In fact, they’re great mentors and coaches. They know that success is not a zero sum game. People want to be on a team that has leaders with high EQ.

Daniel Goleman’s work surely gives us insight on the term soft skills. However it still remains not easy to define soft skills since the definition of the concept differs from discipline to discipline, from context to context and possibly also from nation to nation. So, which sets of soft skills apply to the accountancy profession today? There have been and will continue to be a number of studies which continue shedding light on the soft skills competencies required by the profession – which inevitably will keep on changing depending on the changes of the profession and the current market environment. Reference below is being made to two of these studies, however it is important to note from the outset that the following categories are more illustrative rather than comprehensive.

A study outlining the 5 competency categories for soft skills in professionals, business and accounting graduates at all levels are those of Goleman (1998), Goleman et al(2002) and Weber et al.(2009). Based on the broad literature review, the following 5 main categories of soft skills which are pretty much self explanatory are suggested in this illustration.

5 Soft Skills

Attribute Examples

Similar results came out from a recent paper published by the Institute of Internal Auditors, ‘Succeeding as a 21st centruy internal auditor – 7 Attributes of highly effective Internal Auditors’. In this paper there is reference to the top attribute areas (listed in the table) that Chief Audit Executives look out for but which could be very nicely extended across the profession.

“Employers need to first and foremost appreciate the difference between skills and attributes that truly differentiate their staff. They can strive to attract and develop the non-technical attributes”

How can we achieve a well versed group of financial professionals?

Employers need to first and foremost appreciate the difference between skills and attributes that truly differentiate their staff. They can strive to attract and develop the non-technical attributes described in this article in numerous ways, for instance:

  • Rigorous selection processes that identify a candidate’s propensity to develop these valuable attributes: HR departments will be better placed to achieve successful results if they look into recruitment processes that go beyond the conventional interview process to a more robust recruitment process that includes psychometric testing and group interviews which are more fit to assess the candidate’s propensity to be an all-rounder.

  • Training programmes that target the skills within these attribute areas: A focus on soft skills should not be a yearly seminar, these attributes should be an integral part of your training objectives and learning outcomes. Soft skills training should be given equal weighting to technical skills. Soft skills training may require a heavier investment when you think that a technical skill can be learnt in a classroom whilst a soft skill requires a personal transformation or a cultural change sometimes in the company. New learning styles offer better chances to achieve softs skills learning objectives such as coaching, action learning groups etc.

  • Innovative development activities: Its no news for employers that one of the top motivator for millennials is the possibility to proceed along their career paths. Employers should embrace the concept of succession planning and ensure development programmes are in place to provide the necessary space for employees to grow. Development activities go beyond classroom training and focus more on shadow coaching and learning by doing.

  • Performance review programs that reward proficiency in specific non-technical attributes: Today’s performance review programmes should represent an equal assessment of the demonstration of hard skills and soft skills. This differentiation is further enhanced by integrating a two-dimension process in your performance review structures – performance and potential through which an employee is assessed in terms of not only their past performance but also value drivers such as business impact and personal agility which demonstrate their potential in the business.

For finance professionals to continue establishing themselves, they need to understand the attributes and skills that the employers’ market values. They need to seek assignments, projects and development opportunities that are valued both within their employment and on a personal level and which will enable them to cultivate these qualities. In summary, finance professionals need to equally embrace both hard skills and soft skills to continue to establish a compelling finance professional ‘brand’, a brand that ensures employers continue earmarking them as top talent and the trusted business advisors they want to have by their side.

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