Some may think the word crisis a tad strong, but it’s not far off. For those charged with recruiting talented finance and accounting staff in today’s competitive labour market, their job can often feel something like crisis management. Certainly, few could argue with the assertion that companies around the world are facing some severe challenges in this endeavour.

Recent research underlines the problem. The International Global Financial Employment Monitor by recruitment firm Robert Half revealed that 56% of around 5,000 finance and human resources managers surveyed reported difficulty finding skilled candidates, and indicated that every labour market across the world was affected by these shortages.

Companies are responding in various ways, but all are uniformly having to shell out more time and money on locating suitable candidates, taking an average five weeks to fill staff-level accounting and finance positions, and two months for management roles. For UK companies, this has meant that recruiting from overseas is becoming more popular. Yet, while this has proved a successful solution for some companies, for others it is creating more challenges.

Firms that want to hire the best talent do well by spreading their nets outside their own jurisdiction, and successful overseas recruitment is a crucial issue for UK companies. Additionally, finance teams have to find even more people than a few years ago to cope with the heavier legislation landscape.

“Recruitment of finance professionals in dramatic numbers started with the introduction of the Sarbanes-Oxley Act in 2002 and the huge pressure it placed on the finance market,” says Max Williamson, director for recruitment website www.careersinaudit.com. “Finance teams have had to grow by at least 25% to implement the changes, and there simply haven’t been enough UK candidates available.”

Spreading the net
It is not just in the UK that finance staff recruiters have thrown open the doors to international applicants. The same is happening in the US. “There is a shortage of talent in this market [the States] because of insufficient graduate hiring, gaps in training of qualified CPAs and brain drain as professional services firms fail to stop their top players moving to rival banks and corporates,” says Laurence Pengelly, director of Michael Page’s US finance division. “As a result, many firms are looking overseas.”

Overseas recruitment is also important for the growing number of firms that have moved their finance and accounting functions offshore. A study of North American and European firms undertaken in 2006 by Duke University’s Off-shoring Research Network showed that around 30% have chosen to offshore their finance and accounting departments. That’s up from about 20% in 2004, and just 10% in 2002. This growth curve is expected to continue its upward trajectory increasing to as much as 50% of firms in those jurisdictions taking their accounting and finance teams offshore over the next three years.

By the end of 2010, more than half of large US and European companies will have offshored at least a portion of their finance and accounting function. As David Angel, director of offshore services at Michael Page, says, “Most of my clients based offshore look outside that country when staffing their finance departments because the local workforce in most countries does not always possess the qualifications required by [local] employers. Now, there is endless demand for qualified accountants, company secretaries, fund accountants and trust professionals in all offshore markets.”

The greatest challenge with overseas recruitment is no different to looking at home ­ finding candidates with sufficient qualifications, skills and experience. Importing talent can throw up issues around those individuals being acquainted with the relevant legislation in that jurisdiction. Nick Parry, director of executive search and selection at recruitment consultancy Harvey Nash, says, “Most finance professionals from overseas generally have sound accountancy skills, but can lack the necessary experience and knowledge to ensure compliance with IFRS, US GAAP or Sarbanes Oxley.” That is obviously paramount and, in itself, implies further expenditure.

However, lack of technical skills is rarely the main problem. The internationalisation of accounting standards and of professional qualifications means that candidates in ‘New’ Europe are more likely to take the ACCA or the Institute of Internal Auditors’ Certified Internal Auditor qualifications than their local qualification, so employers are fortunate to have access to a growing global pool of talent all trained to the same technical standards.

In fact, the greatest training needs tend to be cultural rather than technical. “There is a general misconception that accountants coming from outside the EU or North America are not qualified to work in those jurisdictions,” says Jon Inches at Search Consultancy. “But a management accountant that has worked for a £100m turnover company in India will, in essence, have done the same job as a management accountant in a £100m turnover company in France or the US.

The difference will be the language, the currency and other cultural issues, none of which should be serious barriers to potential employers looking to widen their labour pool.

“Software is generally internationally transferable, and the process involved will be the same. Numbers are numbers.”

Cultural differences
Conversely, Williamson, of www.careersinaudit.com, flags other cultural concerns that business should be aware of. “Attitudes towards risk differ enormously between finance teams in the UK and most parts of ‘New Europe’, and many UK heads of department find they need to invest time in narrowing this gap,” he says. “Also, UK finance leaders are expected to partner business leaders, while those from overseas can come with a more rigid and confrontational style.”

These obstacles are far from insurmountable. A growing number of companies are finding that, by establishing a good source of well-qualified staff, operating a rigorous selection process and then providing high-quality, individually-tailored training they are able to find and recruit the right people for essential finance roles. Recruitment firms such as Badenoch & Clark that provide contract accounting professionals to UK firms, report that demand for staff has outstripped supply for the past 18 months and that almost 25% of contract staff working for the firm in accounting and finance now come from overseas ­ that figure rises to 60% in central London, where applicants are mostly from Australasia. “Focus on the cultural differences and ironing those out by having your own employees train new staff,” says Badenoch & Clarke consultant Simon Moore. “Create an environment where your staff are measured not only by their own performance, but also on how they are developing and up-skilling others.”

As more companies succeed in finding and training overseas finance staff, the greatest challenge becomes the restrictive visa system operated by the US and EU. However, Paul Bibby, chief exec of financial recruiters Elements Group, reports that even this is likely to become easier in the distant future. Under the current Resident Labour Market Test, companies have to advertise all of their jobs within the EU for a set period before offering them to people from outside the EU.

But Elements Group’s Bibby says there are plans to relax rules on how white-collar jobs in Britain are filled. “From this July, employers will no longer have to advertise in the UK for posts offering salaries over £40k per year before they make those posts available to workers outside the EU,” he reveals.

Few expect the talent shortage in the EU and US to end soon. Most expect overseas recruitment to become more common. Bob Cecil, executive director for global operations at IT consultancy Equaterra, believes that it will become the primary offshore issue for FDs within 15 years. “We are not graduating enough certified accountants in either market to meet demand.

Furthermore, as more higher-end finance and accounting work is sent overseas, the issue will become even more crucial,” he says.

While there are naysayers on hiring finance staff from abroad, most see it as a positive development. “Many finance teams have benefited enormously from the recruitment of overseas staff. It has added to the cultural mix of their team and the skill-set it can offer the company through additional language ability,” says Williamson. “As long as it is properly managed and a good balance is maintained between numbers of UK and non-UK staff, it is worth consideration by every finance team.”

Transnational action
KPMG UK has recently hired 19 new members of staff from the Philippines and Singapore, following recruitment drives in those countries, driven by a dearth of qualified candidates since the global markets slowdown of 2001 affecting manager and senior manager levels, according to KPMG’s UK head of recruitment, Lesley Winterflood.

“It is an increasingly attractive option to look overseas for finance staff given the skills shortage for strong candidates with specialist skill-sets in the UK,” says Winterflood. “The key areas where finance staff lack skills is in transaction services.” KPMG ran targeted campaigns last year to recruit from countries such as Malaysia, the Philippines and Singapore, by placing branded online adverts in relevant places to handle what was a heavy response rate. The key issue for KPMG was processing work permits and problems associated with securing them. The firm’s Australian and New Zealand offices are now considering campaigns in Namibia and the US.

Targeting your search for skilled overseas staff is important. “Understand which of your competitors has recently targeted a particular country and consider whether it is worth targeting for pools of talent at this time, or waiting until the holiday season, for example,” says Winterflood. “It’s usually worthwhile placing a small advert and gauging response quality and quantity before putting any longer-term strategies in place.”

Training is paramount in dovetailing foreign staff into the finance function. “Individuals may be required to top-up their qualifications so that they are of an equivalent level to the job they are undertaking,” she adds. “Often this training is provided through mentoring.”