Companies risk a CFO talent crisis by automating junior finance roles |
Companies risk a CFO talent crisis by automating junior finance roles
The work AI does best is the work nobody wants to do. In finance, that is precisely the problem.
For decades, junior accountants learned their trade by reconciling accounts, manually entering data, and grinding through the month-end close. The tasks were tedious, but they built an understanding of the mechanics of finance. It’s now possible to automate much of that work, but doing so removes a crucial stage of training for future finance chiefs.
“I really do worry how the next generation of controllers, finance directors and, eventually, CFOs will learn when those entry-level jobs are not the same as what they used to be,” says Catherine Birkett, CFO of London-based payments company GoCardless. An understanding of the data can help finance professionals get more out of AI tools, she argues, and this is often developed in junior finance roles.
“A year ago finance chiefs were unsure what difference AI would make. Now every single one of them is using it,” says Mark Freebairn, head of the board and CFO practice at executive search firm Odgers. He predicts that AI could eventually automate much of the accounting function, adding: “If it’s not replacing all of it yet, it will do.”
A diamond-shaped function
As the use of automation increases, the number of entry-level finance roles is shrinking. PwC took on 200 fewer entry-level staff in the U.K. last year, and nearly two-thirds of CFOs surveyed by the Oliver Wyman Forum and the New York Stock Exchange expect junior roles to make up a smaller share of their finance teams over the next three years.
“There are absolutely going to be fewer entry-level finance jobs,” Birkett says. “Those that remain will go to capable candidates who look little like the accountant of 30 years ago,” she adds.
With companies seeking to cut the number of junior hires in the finance function, the traditional pyramid-shape of the function is changing. Many companies are moving to a “diamond-shaped” structure, with more mid-level finance professionals and fewer trainees, according to Freebairn. But this presents new problems for the........