fund accounting woman giving presentationIt’s 2018, and the regulatory hell-hounds are chomping at the bit. Are fund accountants the answer?  Thanks to the growing complexity of financial reporting rules, even the Big Four accounting firms are rethinking previously laissez-faire attitudes about turnover.

No one can blame them. According to the Bureau of Labor Statistics, there will be a 10% rise in demand for accountants and auditors from 2016-2026. Current unemployment rates for the industry are at historic lows, so the challenge of recruiting top talent remains. The new reporting rules are fueling a surge in demand for accountants who are part regulatory expert and part investment trend guru.

What Firms Are Looking For

Here are a few qualifications private equity and fund accounting firms are looking for:

•  A Bachelor’s in Accounting.

•  A minimum of 2 to 3 years in public accounting experience – familiarity with the audit process is crucial.

•  A CPA certification or working towards CPA certification.

•  Candidates with SEC reporting experience – this encompasses familiarity with 10-K, 10-Q, and 8-K regulatory reporting.

The 3 Hiring Trends in Fund Accounting

Trend #1The Rise In Private Equity And Hedge Fund Hiring

The fund industry continues to face substantial challenges in light of tax and accounting updates. Of primary interest is the ASU 2016-19 Technical Corrections and Improvements to Accounting Standards Codification (ASC) Topic 820. It specifies 6 new amendments that clarify guidance in the ASC. The Amendment to Subtopic 820-10 is particularly crucial. It requires organizations to clarify changes in valuation approaches and techniques.

Essentially, private equity and hedge fund entities need to recalibrate their valuation infrastructures to comply with ASU 2016-19. This need has fueled the rising demand for fund accountants with regulatory experience. A new study by the recruitment firm Context Jensen substantiates the rise in fund hiring. In 2017, private equity firms made almost 250 hires, a 27% increase from 2016.

Trend #2The Rise Of Lean Investment Teams And How It Impacts Hiring

Question: what do Industry 4.0 and lean investment teams have in common? If you answered “increased productivity or operational excellence,” you deserve a pat on the back.

Experts contend that we’re on the verge of the fourth Industrial Revolution. Industry 4.0 is a shift towards connected, cyber-physical entities that run “smart” organizations. The “lean” philosophy, an integral part of Industry 4.0, began in the manufacturing industry. Today, big data analytics and AI-fueled automation have redefined the old decision-making hierarchies. With automation, you get consistent outputs and reduced waste. This, in turn, facilitates operational efficiency.

The “lean” philosophy has extended to the finance industry. In lean finance, standard cost accounting takes a back seat to value stream costing. A value stream is defined as any activity within the manufacturing process that translates into value for the customer.

In a lean operation, production levels are calibrated to keep pace with demand and technological change. This eliminates overstock and translates into shorter lead times and increased ROI. An accountant with a lean mindset uses unique inventory valuation techniques to facilitate such an operation.

Nowhere are the skills of such an accountant more in demand than in the securities and commodities industries. Fund accountants with regulatory experience and a CPA certification may fetch enviable six-figure salaries. And no surprise: New Jersey is one of 5 top paying states for such accountants, with salaries between US$80,000 to US$100,000.

Trend #3: The Surprising Jobs Skills Employers Seek In Fund Accountants

Employers are increasingly focused on real-world experience, in light of the transformations preceding Industry 4.0.

A recent Ernst & Young study points to how Industry 4.0 will dominate much of the conversation about future finance hiring. The 2016 study is based on responses from 769 finance leaders across the Americas, Europe, the Middle East, and Asia-Pacific. 65% of the respondents agree that automated processes will build agility into the accounting infrastructure in ensuing decades. Meanwhile, 57% contend that accountants with predictive and prescriptive analytics skills will see rising demand for their expertise in the future.

The shift to RPA (robotic process automation) and AI-based technologies continues unabated. This phenomenon is almost certainly precipitated by the advent of more stringent regulatory requirements. The figures support this theory. Almost 60% of the CFOs contend that regulatory experience and risk management capabilities will figure into their future hiring decisions.

What Vitalis Consulting Can Do For You

So, it begins. The race to merge technology and people to drive efficiency. At Vitalis, we understand the challenges of hiring fund accountants with the right skills. Contact us, and learn how you can benefit from our Recruiting Process Outsourcing (RPO) solutions today!