Having trouble finding talented individuals to fill internal audit roles? Maybe you’re looking in the wrong places.
Several studies have pointed recently to a shortage of skilled internal auditors. Some commentators have even referred to the difficulty organizations are having filling job openings and the competition for capable internal auditors as a “war for talent.”
Hyperbole aside, they aren’t much off the mark. A survey of 444 chief audit executives published last year by The Institute of Internal Auditors (IIA) found that companies are having trouble filling internal audit job openings. More than half of the respondents (54 percent) cited increased competition for a limited pool of candidates as a major concern.
The reasons for the talent shortage are varied. New regulatory demands, such as those contained in the Dodd-Frank Act, are increasing the workload, especially in the financial services sector. Meanwhile, the audit function is being asked to do more, including auditing cyber-security and operational controls. Staffing firm Robert Half contends that the unemployment rate for accountants and auditors stands at 2.4 percent, well below that of other professions.
As the scope of internal audit continues to widen beyond the traditional skill sets of finance and accounting, companies need to look beyond the usual suspects for good candidates. Sure, financial control, general IT, and compliance skills are important, but how about looking for individuals with deep industry knowledge, data analyzation expertise, specialized IT skills, engineering, and even sales and marketing skills. Not only does this widen the pool of available candidates, it fits into internal audit’s mandate to address risks throughout the organization, well beyond the finance department.
An important consideration is that candidates can learn technical skills, but other skills like critical thinking, industry specific knowledge, and experience in varied disciplines is much harder to attain.
One of the challenges to this strategy of attracting more dynamic individuals with a diverse set of skills is repositioning the internal audit profession to them. Lots of folks, unfamiliar with what the modern internal auditor actually does, will likely be leery of moving into the role. Many think of Generally Accepted Accounting Principles (GAAP) and Sarbanes-Oxley compliance when they hear the words “internal audit.” Companies need to do a better job of conveying the varied job functions that the role now entails. One possibility is positioning the job as a way to learn the business better and to gain important exposure to many facets of the organization.
Changing the Perception
Getting the word out that internal audit is evolving into a more strategic role, dealing with risk management, cybersecurity, and operations is essential to raising its profile and attracting a candidate pool with diverse skills and interests. Another challenge is making internal auditors feel valued and that there is room to grow in the organization. Companies should do more to position internal audit roles as valued positions with great potential and provide the necessary recognition to accomplish that goal.
Some other problems with attracting talent go beyond the shortage of qualified individuals with traditional internal audit backgrounds and can’t be addressed by widening the search criteria. In its report noting the shortage of internal audit talent, the IIA cited the perception that internal auditors aren’t paid enough and that organizations don’t do enough to provide training and continued education. That will need to change, especially the training part. Attracting talent from other disciplines only works if they are then provided the technical training they need to excel in internal audit roles.
Widening the search for internal audit professionals beyond the traditional accounting and finance is certainly a strategy worth exploring. Not only is it a potential solution to the shortage of internal audit talent, it can help companies meet the new demands of the function and make internal audit a more valued partner with the business.