By Nicolaas van Wyk and Ciaran Ryan
There is a perception that South Africa suffers a critical shortage of skilled accountants, and that we should make up for this deficit by importing these skills from abroad.
While the skills deficit may be true in certain specific cases, such as corporate treasurers and CFOs, there is far more evidence that South Africa has a relative sufficiency of accountants – more than 200 000 – that need to be more efficiently deployed to advance the goal of promoting sustained economic growth.
The Department of Higher Education and Training (DHET) through its Labour Market Intelligence Research Programme issued a Critical Skills List (CSL) earlier this year and has asked for public comment.
Saiba has submitted its comments on the draft CSL, which is intended to fill positions from abroad (through the issue of work permits or visas) in cases where the job applicant has “exceptional skills or qualification.”
We believe that the current draft CSL will have the unintended consequence of taking away employment opportunities from South African professionals. The Department of Home Affairs (DHA), which is ultimately responsible for the issue of work permits or visas, defines critical skills as: “…skills that are regarded, through labour market availability and analysis, to be critical for improvement in economic growth and without which certain projects and work could not be undertaken, as well as high-level skills that will enhance the skills pool in the economy which in turn will encourage and potentially accelerate growth in the economy.”
For occupations to be included in the CSL, they must meet all of the following criteria:
- Currently be in acute shortage or likely to be in the future, due to its importance for South African strategic priorities, and
- Require a high-level skill or advanced qualification, and
- Require a long lead-time to develop a domestic supply pipeline.
According to the University of California’s Office of Diversity and Outreach, “Unconscious Bias” (UB) is a social stereotype about certain groups of people that individuals form outside their own conscious awareness”.
Various articles demonstrate that UB is also present within the accounting profession with regards to racial and gender diversity.
It has been further demonstrated that “…UB can have a big impact on people-related decisions at work, especially when it comes to recruitment, promotion, performance management and idea generation. When bias is prevalent, your organisation will struggle to hire diverse teams, and efforts to improve workplace inclusion will be of limited success”.
UB is not only limited to race and gender, other types of UB include:
- Affinity bias – preference to people similar to us,
- Attribution bias – underrating the achievement of others,
- Confirmation bias – looking for evidence that supports our views,
- Conformity bias – group driven decision making,
- Contrast effect – failure to assess individuals on their own merit.
We believe that UB may be present in the sources used to determine the acute shortage of accounting-related occupations as listed in the draft CSL.
This is due in large part to the “imperfect proxy indictors” used in establishing critical skills in the accounting profession, and the monopolistic nature of the accounting profession itself.
The centralised nature of the accounting profession
South Africa is blessed with more than 10 professional bodies for accountants. However, there is clear market dominance. The largest body within the sector has close to R1 billion in total revenue and other income. This is estimated to be more than double the revenue of all the other professional bodies combined.
There are many reasons for this including, in our view, a private law and a historic Charter that allocates unfair advantage. Other reasons include many Universities establishing Schools of Accountancy that although funded by the public purse and with a mandate of being open, accessible, and representative strongly align with only a few professional accountancy bodies and with a focus on the education of chartered accountants.
We believe the profession needs to be more inclusive and to remove this bias. Special relationships based on affinity, attribution and contrast is the problem and needs to be addressed. Limiting access to South African accountants based on which professional body they belong to, does show an unconscious bias that has a negative economic impact. Qualified accountants with the necessary experience are excluded from opportunities due to their membership of professional bodies not part of the dominant group.
It is not hard to understand why employers and employment agencies are subject to significant unconscious bias when seeking to fill vacancies for the accounting occupations listed under acute shortages. In our view it is these unconscious biases that skew the data and give the impression of acute shortages. The effect is unemployment, jobs not being filled, and a delay in economic development.
We do not believe that acute shortages exist within the accountancy related occupations currently listed in the draft CSL, and allowing foreigners to take jobs for which many accounting professionals within South Africa are qualified to perform will be contravening the Immigration Act and could cause social unrest.
How this bias has bled into the CSL
The use of imperfect indicators may have skewed the final CSL by restricting analysis to job adverts placed in newspapers and other online portals, when it is well known that employers frequently search for senior finance executives and CFOs – a notable absence from the draft CSL – through platforms such as LinkedIn, by personal head hunting, and via employment agencies.
The draft CSL allocated occupations to professional bodies on a basis which is not explained within the Report. The allocation of occupations to professional bodies or associations seems arbitrary and does not reveal a deep knowledge of the sector.
While the DHA recommends minimum qualifications for different accounting roles, and membership of specific professional bodies, Saiba recommends throwing open the draft CSL to all professional accounting bodies in only those specialised areas of accountancy where an acute shortage is prevalent. We should avoid the establishment of a professional aristocracy favouring one group of accountants over others and should not be putting taxpayer money into universities and colleges that perpetuate this bias. It has very real negative economic effects. South Africa’s critical skills lists should be an unbiased list in respect of all the underlying skills requirements related to all areas in the profession including:
- company secretaries,
- management consultants,
- accountants in practice,
- forensic examiners,
- business administrators,
- fraud examiners and even auditors
Each of these posts can be filled by members from any of the accounting bodies as long as these bodies are compliant with relevant laws and regulations related to quality, education, CPD, ethics, disciplinary mechanisms and performance monitoring
If we look beyond the blinkered bias that has infested the accountancy profession in SA, we will see that the skills deficit is less alarming than it first appears and that thousands of qualified, experienced, and vetted accountants are locally available. We just need to be willing to change and accept those that are different but equally competent.