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Finance chiefs try to cope with a new cadre of finance and accounting employees who just can't sit still.
David M. Katz, CFO.com | US
October 29, 2007
Enter the "millennium generation" of finance and accounting professionals. Born in 1982 and later, they're high-maintenance types, requiring a great deal of hand-holding, mentoring, and immediate attention. Even after all that parental supervision, they can be incredibly fickle, choosing to stay at your company just until a better-paying, faster-growing offer comes along. Some may throw a tantrum if they feel like it.
Well, maybe not throw a tantrum. But many senior finance executives complain loudly that the millennials and their slightly older peers are a willful, pampered bunch with scant loyalty to their employers. Other top executives find them rigid and rules-based in their thinking, lacking the proper creativity to move beyond pre-set tasks.
Yet despite such liabilities, many CFOs seem happy to sign on more talented beginners because the competition for employees with finance or accounting smarts is fierce, especially in mature public companies, privately held outfits, and audit firms. In the current recruiting frenzy, students showing accounting aptitude are wined and dined by audit firms when they're as young as sophomores, professors say.
Given the huge demand for talent and what many see as the short supply of maturity, senior finance executives often find themselves working overtime on staff development. To be sure, Melissa Morales seems young for a curmudgeon. But after two years of constant interviewing to fill her frequently churning 15-person accounting and finance staff at The MC Companies, a Scottsdale, Ariz.-based real estate developer, the 36-year-old CFO sounds like the vestige of a prior generation.
Of course, she acknowledges, there are some strong self-starters. But much of the new crop of hirees "definitely need 'thatta boys' and 'thatta girls,'" she says, adding with some exasperation that "you don't need to be recognized for everything you do."
Morales also cites a lack of fortitude in the work habits of a few recent recruits. "Some people I've worked with, in trying to think something through, get to a point and just throw their hands up," she says.
By early October, Morales was actually breathing a sigh of relief because her staff had finally reached full strength. But she still regards the current crop as a "picky" one, for whom there constantly "must be something better. They're always looking for the next thing. There's no investment of time or commitment" to the employer.
Most rankling was the case of a recent youthful hire who had worked for a small company and a larger, publicly traded one before Morales hired her at privately held MC Cos. After 60 days there, she left for another publicly traded company. Such jumping around was "not the way I was brought up," the finance chief adds.
True, a fair amount of the wanderlust is likely being generated by recent shifts in the economy. William Kurtz, CFO of Novellus Systems, a semiconductor maker based in San Jose, California, says that he saw a 20 percent turnover in his 100-person finance department in both 2005 and 2006. That upheaval roughly tracks the resurgence of startups and initial public offerings in Silicon Valley after years of slow post-tech-bubble growth. Promising growth rates of 50 percent or more, such companies have been snatching accountants and future controllers from Novellus, which is shooting for growth rates of 15 percent. "These people were high potential people for further growth and development," he says. "We didn't expect them to leave."
On campuses, the top students can hardly mistake the strong message that their services are greatly in demand. At the University of Alabama, recruiters at the top audit firms take an intense interest in "who went where," treating the competition for talent "almost like a fantasy baseball draft," according to Richard Houston, a professor of accounting and director of the university's master of accountancy program. As part of their recruitment efforts, the firms are prominent caterers of tailgate parties for potential accounting hirees at Crimson Tide football games. While university-related events must be alcohol-free, "at restaurants and bars, all bets are off," says Houston. "I don't know what's going on there."
The need for auditors driven by the immense compliance requirements created under the Sarbanes-Oxley Act over the last five years may also be driving the current seller's market for corporate finance talent. "What's happened is that SOX hasn't been bad for the accounting industry. We need a lot more accountants," says John Brausch, controller of Edens and Avant, an owner of retail shopping centers. However, he adds, "more hiring shrinks the available pool" for corporate accounting and finance.
But sea-changes in the way young accountants and finance folks feel about such things as commitment to a single employer and the need for job security seem to be playing an equal role in current turnover. "If the environment turns down, they're less apt to stick it out today than [we were] 20 years ago when I was in their shoes," says the 50-year-old Kurtz.
While they grant that stereotyping by age can obscure key differences among individuals, finance executives from their late 30s to their mid-50s agree that the new crop of hirees share certain characteristics that mark them as a distinct breed. To their older supervisors, "they seem like a different species," says Jay Jamrog, senior vice president of research for the Institute for Corporate Productivity, a firm that tracks workplace trends. (For a discussion of the attitudes of the new generation of finance professionals, tune into CFO.com's video interview with Jamrog.)
Although they resemble Generation X — the cohort just preceding them — in their cravings for interaction with their bosses, the new millennials' traits are "magnified" in comparison to Gen Xers, according to Jamrog. "They want feedback at the touch of a button today," he adds. "If you don't answer their e-mails and give them some positive reinforcement, you just dissed them."
And if they feel dissed, they're likely to walk. Houston says that he often hears from former students, toiling away during the first weeks of their first audit jobs in small hotels in remote outposts like Dothan, Ala. Based on the experience of a single grim week, they might well declare their desire to change jobs. "People nowadays are just more likely to focus on 'I hate this, if I go across the street things will be better' without really focusing on what's wrong about it in the first place," he says.
Following similar short-term thinking, many would-be corporate finance executives may mistakenly be shrugging off the hard slog of acquiring basic accounting skills because they see accounting as boring and lacking in glamour. Of the 140 or so accounting majors that graduate from Villanova University each year, 95 percent to 100 percent are sure to have jobs immediately, notes Michael Peters, an assistant professor of accounting and information systems.
Yet many seek to become finance majors and enter a much more competitive job market on Wall Street, where firms end up hiring only a handful of graduates. "It's like a high school basketball star who's got his eyes on the NBA," he says. "It's the money that attracts them."
Next time: how some senior finance executives are bridging the generation gap.