International Hire
Stay competitive in today’s increasingly global marketplace.
By Christine Bockelman
THESE DAYS, that over-achiever gunning for your job might not be in your office, or even in the same state. No, the biggest threat to your job security might be someone living in a different country altogether.
The effects of globalization have long been felt in the world of accounting and finance. But this small-andrapidly-getting-smaller world might be about to really shake things up in American accounting.
In early March 2007, the SEC held a roundtable discussion to weigh the pros and cons of allowing listed companies to adopt the International Financial Reporting Standards (IFRS) that many countries—including Russia, South Africa, Hong Kong and the European Union—are already using. Adopting these universal financial reporting rules would present an enormous change for American finance professionals, whose training is firmly rooted in US Generally Accepted Accounting Principles (GAAP).
“International financial reporting standards are well used and known quite well in other countries, but it’s relatively recent that they’ve become more of a focus within the United States,” says Ian Ball, CEO of the International Federation of Accountants. The change has been in the works since 1973, when the London-based International Accounting Standards Board (back then the group was known as the International Accounting Standards Committee) first started working to achieve convergence among the world’s accounting standards.
While the move may seem unnecessary at first glance, its benefits are many. For one, it could greatly reduce accounting costs for US businesses with offices overseas. Instead of having to file US-GAAP to meet American standards, and
then other forms to meet the standards of other countries, businesses would be able to file once, using the same set of numbers to meet each nation’s requirements. At the very least, it’s a much more efficient system for corporations.
Furthermore, having one version of the financial paperwork would make things much easier for investors, who wouldn’t have to translate financial reports from one country’s standards to another to come up with an acceptable data set. And, if less financial translation is needed between forms, then, presumably, there would be less opportunity for error. Also, transactions would be quicker, reducing the cost of capital around the world.
Right now, the change is in the initial stages of discussion. It’s a hotly debated topic, even though experts don’t really know when the United States would adopt the international standards (some say it’s at least 10 years away for both listed and non-listed companies). Nevertheless, there’s no denying that globalization is digging its claws deeper into the world of finance.
“Globalization is becoming more and more important every day and it will continue to be,” says Manny Fernandez, national managing partner for campus recruiting at KPMG. “Emerging markets such as China, India, Brazil and Russia are growing at a faster pace than the United States. It’s a global environment.”
With so much overseas work going on, and more expected in the future, many US accountants are already using the IFRS on assignments. But here’s the thing—so are just as many, if not more, international accountants. And if financial professionals worldwide are all learning the same skills and, presumably, passing the same certification exams, then the playing field is being rapidly leveled. The only difference is, those offshore company accountants are cheaper to hire.
“It could end up commoditizing talent,” warns Bruce Pounder, CMA, CFM and president of Leveraged Logic, a training company based in Asheville, NC. “Instead of each country having specialists in that country’s accounting standards, everyone in the world would be focused on the same standards. Accounting talent is becoming more interchangeable and less country-specific.”
Currently, American accountants have two big advantages—their US citizenship (international accountants have to grapple with time-consuming visa issues) and their knowledge of American reporting regulations. Their US-GAAP expertise is very valuable not only here, but also on overseas projects as companies seek to reconcile international filings with US filings. Knowledge of US financial reporting standards is crucial for accountants working for clients with US offices. Unless international accountants have passed US CPA exams, which an increasing number are doing, they have to take on limited roles in international projects, since they can’t sign off on any work.
But again, if the IFRS eliminates this competitive edge—even if it’s 10 years down the road—more and more work could go to your cheaper counterparts overseas. Goodbye tight US job market!
What can you do to protect your job against this potential international competition? The best advice is to make like a Boy Scout and prepare. Here are three ways how.
ONE: Go Abroad This year, for the first time ever, KPMG will take 100 of its recently graduated new hires and about 200 other new hires from its international offices, and send them overseas to work. The company is also launching a pilot program in which a handful of its college-aged US interns will be sent to an international office, instead of working domestically. “We’re trying to accelerate our global capabilities and present the options employees have in their careers,” Fernandez explains. Many of the firm’s senior managers and partners go abroad as well, although those assignments typically last about three years and have a very strategic focus.
“Even a month or two living abroad is useful to someone during their career. We’re increasingly looking for people who have experience with other cultures and languages,” says Fernandez.
As a Big Four firm, it’s not surprising that KPMG’s clients have global offices. But even if you’re not at a firm that large, you should still search out opportunities to work overseas—even on a project basis.
“It’s so valuable to take an international assignment. It’s hard to develop the necessary skills sitting in the United States. You can’t learn in a classroom what you would learn on an international assignment,” explains Kevin Ford, Midwest leader of Korn/Ferry International’s financial services practice.
Working abroad offers more than a topic of conversation in a job interview; it reveals an ability to look at issues and problems from a different perspective. “You’ll be working somewhere where you, as an American, are in the minority. It takes you out of your comfort zone, which is always a valuable experience,” says Ford.
“My organization hires people from all over the world,” adds Ball. “Some of them settle into a new environment and others don’t do so well. Being able to prove that you can adapt quickly to new offices and cultures is increasingly important these days.”
Where should you go? “Anywhere that’s using international reporting standards,” Pounder advises. “The EU, for example, or soon Canada. An English-speaking professional could easily fit in there.” If you’re feeling adventurous, Brazil, China and India have rapidly developing economies that would provide invaluable work experience.
TWO: Develop Cross-cultural Communication Skills While becoming proficient in a new language or two is incredibly helpful (insiders say Mandarin, Spanish and German are all good to learn), what’s equally important is learning how to communicate cross-culturally. “Communication skills are critical if you’re working across cultures and borders,” says Fernandez.
“A financial executive has to have the social skills to manage the kind of multicultural challenges that arise,” Ford adds. If you’re always in the same corporate office, it’s much harder to understand how accountants in, say, China would attack a problem.
“Different cultures operate in different ways, and it’s good for accountants to understand that firsthand as the business world becomes more global,” says Steve Ferrara, assurance business line leader in the Chicago office of BDO Seidman.
If family or other commitments prevent you from spending a few months abroad, chances are you won’t even have to leave the office to interact with international accountants. At BDO Seidman, the office is a “melting pot,” according to Ferrara. “We have people from Australia, the United Kingdom, China and Israel here right now. They come here for one or two years to learn US-GAAP and SEC reporting standards, and then take that knowledge back to their home offices.”
It’s the same at KPMG. Fernandez explains that there are accountants from Malaysia, South Africa and The Netherlands in the Denver office alone. “Global mobility is multidirectional,” he says. “Foreign accountants are coming to the United States to build their skills, just as much as US accountants are going international.” And with rapid globalization, accountants are increasingly in demand, which means talent from overseas is being harnessed to meet global challenges.
“I think the key is that people bring different perspectives to the table, and people need to learn to work well with these different perspectives. Communication skills are hugely important,” says Pounder.
THREE: Keep Learning As things stand right now, learning IFRS is a good way to set yourself apart. Even if the reporting standards were to never take hold in the United States, understanding them would make you more rounded professionally, and more globally competitive.
“There’s a need for employees who know international standards,” Ferrara states. “We see it all the time that smaller and smaller companies are opening international operations.” These companies, he says, need experts in both US-GAAP and IFRS to correctly report their financial statements.
Currently, most companies seeking employees with experience in international financial reporting don’t look for them within the United States, Pounder explains. “Other countries are more actively training people, since they’ve already adopted the standards,” he says.
Given this, make yourself more attractive for international assignments by looking for training opportunities within your company. BDO Seidman, for example, offers courses in international accounting about once a year, although they are primarily available to employees with an immediate need for the training.
“If your firm doesn’t offer training in this area, there are conferences in this subject and courses you can take,” says Ball.
Remember, though, that what’s cutting edge now might not be cutting edge in a few years. For instance, if the SEC adopts the IFRS, then every accountant out there is going to have to learn IFRS. In other words, your “specialty” isn’t going to be so special anymore.
Rather than focusing on one thing and sitting back, it’s a better idea to stand out from the crowd by constantly fine-tuning your expertise. Stay on the forefront of the industry by attending courses and conferences, earning additional certifications, and otherwise proving that you’re actively invested in your career.
“There are lots of credentials that complement the CPA designation and help to distinguish a CPA from everyone else,” says Pounder. Certified Management Accountant and Certified Internal Auditor are two strong differentiators, he says. “People sometimes think that specializing will tie them down and limit opportunity, but companies want to hire experts. If they have a problem that needs to be fixed, they want to hire the best possible person for that problem.”
As borders merge on a global scale, make sure that you’re positioned as the expert of choice.