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Hard demand for soft skills

Accountants facing digital disruption should be brushing up on their “soft skills” to raise their job market appeal.

By Ben Power

Search
giant Google was founded by two computer scientists, Sergey Brin and Larry
Page, and algorithms drive its search business.

But in 2013
Google decided to analyse its hiring practices. As reported by the Washington Post, the company’s “Project
Oxygen” crunched data on all its hiring, firing and promotion practices.

The
findings, partially released to the public at the end of 2017, shocked the tech
giant’s leadership. The seven top characteristics of Google’s successful employees
were all “soft skills”, and included empathy, critical thinking, connecting
complex ideas, coaching and communicating. The set of skills collectively known
as STEM – science, technology, engineering and mathematics – came dead last.

Google’s
research is a timely reminder that, for professions like accounting, technical
skills are not enough to compete in the digital era. A key edge will be the
ability to build and develop softer skills like empathy and creativity.

The soft surge

“The
accountant of 2030 is likely to be highly creative, very digitally savvy, but
bring high degrees of empathy and creativity to what they do,” says Aaron
McEwan, Gartner’s HR practice leader for Australia and New Zealand.

That
creates new challenges: how best to develop soft skills, which ones to focus
on, and, importantly, how to measure success in skills that involve nuance and
human interaction and emotions.

Google’s
findings are not entirely new. For some time there has been a growing
recognition that “soft” non-technical skills such as communication, emotional
intelligence and creativity help talent and organisations outperform.

Academics,
including David J. Deming, a Harvard professor and co-editor of the Journal of Human Resources, are
highlighting the importance of soft skills. Deming says in a 2017 paper for the
National Bureau of Economic Research (NBER), The Value of Soft Skills in the Labor Market, that the evidence is
overwhelming that soft skills “are important drivers of success in school and
in adult life”.

A 2017
report by Deloitte Access Economics, Soft
skills for business success
, noted that having staff with more soft skills
boosts productivity and could increase revenue for the average Australian
business by more than A$90,000.

One of the
report’s co-authors, Jessica Mizrahi, says demand for soft skills is surging.
She notes that 10 of the 16 “crucial proficiencies for education in the 21st
century” identified by the World Economic Forum are non-technical.

The
Deloitte report forecasts that soft skill-intensive occupations will account
for two-thirds of all jobs by 2030, compared to half of all jobs in 2000. The
number of jobs in soft skill-intensive occupations is also expected to grow at
2.5 times the rate of jobs in other occupations.

The trend
towards soft skills is already happening. Though
successive US administrations have urged youngsters into science and
tech-focussed careers, Deming notes that STEM’s share of US occupations fell between
2000 and 2012, while social skill-intensive jobs grew some
12 percentage points as a share of all US jobs between 1980 and 2012.

Don’t be a machine

The central
impetus for the rise of soft skills, as Deming highlights, is that as routine
tasks become automated, skills and tasks that can’t be done by machines
increase in value. The likes of empathy and insight, particularly, become vital
to maintain a competitive edge.

“Businesses
increasingly rely on critical thinking, emotional judgement, and
problem-solving skills in their staff to not just understand what technology is
saying, but analyse why it is saying it, and what ought to be done,” the
Deloitte report says.

Gartner’s
McEwan says that data is becoming the lifeblood of organisations. “But that
data on its own isn’t particularly helpful,” he says. “People don’t need more
data, they need more insight.”

“What the
organisation is really looking for from accountants or finance staff is to give
insights into the business that can help improve decisions about how to run the
business more effectively.”

McEwan says
that more organisations in a low-growth economy are also turning to innovation
and creativity to drive growth. He notes that research shows that changes in
customer expectations are driving volatility and disruption, not technology. “As
we try to better understand customers and what they care about, that requires
empathy,” he says.

Matt
Graham, PwC’s managing partner for assurance, agrees that data isn’t enough,
and a true edge is the ability “to put yourself in somebody else’s shoes and
understand issues on their mind”.

Training for soft skills

Based on
hiring practices, accountants seem to be recognising the importance of soft
skills. US-based Recruiter Robert Half Finance
& Accounting surveyed more than 2200 CFOs in 2017 and found that 54% of
them valued hard and soft skills equally when filling open positions. And 10%
actually gave more weight
to soft skills.

There are
myriad soft skills like communication skills, critical thinking and problem
solving. But Mizrahi says there are others, including ethics, that also need to
be developed.

“Accountants
are trusted advisors to so many businesses – both big and small – and they have
access to mission critical information,” she says. “Having the courage to talk
about the problems and solutions and even sometimes having the courage to say
‘I think you’re doing the wrong thing’ is really critical for the profession.”

McEwan
defines digital skills as “soft” and argues that accountants should also focus
on developing them. He says they need to become increasingly comfortable with
using technology – machine learning and AI – to provide insights. 

But how can
organisations, people and accountants get better at soft skills? Can you train
for soft skills? “You can,” McEwan says. “You can learn those capabilities.”

PwC’s
Graham says the key, at the individual level, is practice (see breakout).

But most
agree that improving soft skills begins with organisational culture.

Just
learning behaviour isn’t going to help, McEwan says. CFOs and heads of finance
must create cultures where soft skills are empowered, encouraged and rewarded.
He says there is no point sending staff to a six-month innovation course “if
when they come back the CFO knocks every idea back”.

Graham
agrees that organisational culture is vital. He says that soft skills are at
the heart of PwC’s core set of five values – act with integrity, make a
difference, care, work together, and reimagine the possible.

“They are
at the centre of every interaction we have with our clients and our people. They
are our true north when we have got difficult decisions to make, and it creates
an environment where everybody recognises how we treat each other and clients.”

Graham says
that learning soft skills at PwC typically fits the 70/20/10 ratio. Around 70%
is learnt on the job, watching role models; 20% is developed from direct
feedback; and 10% is formal training. PwC includes soft skills in its Vantage
bespoke learning application.

The measurement challenge

But Mizrahi
says one of the biggest challenges for organisations is to become better at
measuring soft skills. How will they know that they are improving their
talent’s soft skills? Harvard’s Deming notes that the study of soft skills is
“hamstrung by poor measurement and lack of definitional clarity”.

Organisations
are bringing in external consultants to help. But “we haven’t quite come up
with full objective measurement [of soft skills],” Mizrahi says. “That will be
an important consideration for a lot of employers going forward.”

“As we
learn to value the critical importance of human capital, in most organisations
I think we’ll start moving away from people as a cost, to people as an asset,
and there is a whole bunch of measurement frameworks we will need to consider,”
she says.

After
Project Oxygen, the original study that highlighted the importance of soft
skills, Google started another study, Project Aristotle, which analysed data on
how inventive and productive teams were. It found that the company’s most
important and productive ideas didn’t come from its A-teams of top scientists,
but from the B-teams of less “smart” staff.

The best
teams boasted a range of soft skills: generosity, curiosity, empathy, emotional
intelligence and above all emotional safety: the confidence to speak up and
make mistakes. Google is now hiring staff from MBA programs, but also artists
and humanities majors.

Accounting
firms may not yet hire English literature grads for their audit department, but
if they – and their employees – want to thrive in the future, they will need to
build their soft skills. That challenge is far from soft.


Heading The best skills

arly in his career, Matt Graham, PwC’s managing partner for Assurance, faced a difficult situation. A client whose career was under threat became volatile and angry. But Graham remained calm, settling the client down and walking them through various scenarios. It was then that Graham realised he was developing his soft skills – in this case emotional intelligence.

Graham says
soft skills have played a key role in his career success, both in dealing with
clients but also leading more than 2000 people in his division at PwC.

He believes
the core of soft skills is “the ability to be with other people and focus on
their needs and interests and prioritise them over yours”.

Graham
advises accountants to focus on three main soft skills:

  1. Emotional intelligence: Understand the impact of your
    behaviour on other people. That requires you to sit on the “balcony of the dance”
    – to step outside yourself and watch how you behave and talk with people.
  2. Communication skills: Become articulate and insightful, and
    don’t overdo the technical competence or get locked into minutiae. Rise above,
    and connect the dots and themes.
  3. Selflessness: Graham says he believes he is
    doing his role well when he consistently focuses on the needs of others – his
    clients, their stakeholders, his partners, and the team he leads.

“But soft
skills are really hard skills to master,” he says.

How do accountants
improve their soft skills? Graham suggests three steps:

  1. Understand what your values are. “Be confident and articulate in
    what those values are for you and use them as a compass to guide your behaviour
    in all situations, the tough ones and the easy ones,” Graham says.
  2. Be vulnerable. Being excellent at soft skills
    means being willing to learn and adapt and understand how you’re impacting
    other people. “You can only do that if you’re willing to listen to how you’re
    impacting other people, then act on that feedback and alter your behaviour. You
    can’t do that if you have got a mask up.”
  3. Practice. “Every important communication,
    every difficult discussion you’re about to walk into, you practice that just
    like you would practice for any other harder skills you’ve got in your
    toolkit,” Graham says. “The preparation, the training of the muscle is just as
    critical in these areas. Practice listening; practice asking extra questions;
    practice public speaking, which are all critical.”

Ben Power is a Sydney-based business and finance writer.

This article was originally published in the October 2018 issue of Acuity.