Accounting Income vs Economic Income
Accounting Fraud Prevention using Quickbooks
Accrual based Accounting
American Institute of Certified Public Accountants
The Future of the Accounting Workforce
Firms who are hiring new accountants or accounting majors have to understand where the newer generations are “coming from,” as a Boomer (born 1946-1964) might say, to target a style that will bring out the next generation’s (the Millennial Generation’s) strengths and maximize their effectiveness. This involves discarding biases and preconceived notions and enjoying our generational differences—and similarities! The future of the accounting workforce is dramatically shifting as we learn more about the different generational preferences and work ethics. The rapid spread of information, more technology, and a culture that is changing faster than ever before will continue to shape the future of the accounting workforce.
A Shift in the Accounting Workforce
There is a shift in the accounting workforce occurring as Baby Boomers continue to retire and Millennials take over management roles in companies. Millennial workers grew up in a technology-driven world. The way we do business has changed dramatically over the last 2-3 decades. As a result, they often operate under different perspectives than older workers do. Companies across North America that recognize that the differentiator is their people will emerge as winners in the battle for talent; therefore, they’ll design specific techniques for recruiting, managing, motivating, and retaining them.
Another thing we are seeing in this accounting workforce shift is outsourcing the bookkeeping of the accounting department.
Retirement of Baby Boomers
A notable demographic shift began in 2011 when the oldest Baby Boomers (b. 1946) hit the United States’ legal retirement age of 65. As Boomers continue to retire members, Generation X will take roles in middle and upper management, and, Millennials will take management positions in the workforce. That process has already begun since some members of Millennials in their mid 30s (if we use 1982 as the beginning of the Millennial generation).
Convergence of 3 Generations in 1 Workplace
Other scenarios that will become commonplace will include experienced Boomers reporting to Millennials, members of all 3 generations working side-by-side on teams, and, Millennials calling on Gen X clients. And, all this is going to happen while 3 generations (the Boomers, Gen Xers, and Millennials) continue the process of finding a way to get along in an uncertain workplace.
This has made all the more interesting given the gap between these two generations. For example, Gen Xers complain that the Millennials are indulged, self-absorbed, and overly optimistic, while Millennials charge that Gen Xers are cynical, aloof and don’t appreciate fresh ideas and idealism.
The Generational Gaps
A survey of 2,546 HR professionals (mostly Gen Xers with all 3 generations represented) across all industries (“Millennials at Work”) was conducted between June 1 and June 13, 2007. The results indicated that there were pronounced generational gaps in communications styles and job expectations in the workplace:
- 49% of employers surveyed said the biggest gap in communication styles between Millennials workers and other workers is that Millennials communicate more through technology than in person
- 25% said they have a different frame of reference
- 87% said that Millennials feel more entitled in terms of compensation, benefits and career advancement than past generations
- 73% of hiring managers and HR professionals ages 25 to 29 (Millennials) share this sentiment
Some of the examples of this behavior provided by the employers taking the survey included the following:
- 74% said Millennials expected to be paid more
- 61% said Millennials expected to have flexible work schedules
- 56% said Millennials expected to be promoted within a year
- 50% said Millennials expected to have more vacation or personal time
- 37% said Millennials expected to have access to state-of-the-art technology
- 55% said that Millennials have a more difficult time taking direction or responding to authority than older generations of workers did/do
Generational Preferences: Generation X and the Millennials
So, what is the answer to this frustration? Simply that the 3 generations, especially the Gen Xers and the Millennials, begin to understand and respect each other….
There are 51 million members of the Generation X (also known as the “latch-key kids”). These Gen Xers:
- Were born between 1965 and 1976
- Accept diversity
- Are pragmatic/practical
- Are self-reliant/individualistic
- Reject rules
- Mistrust institutions
- Are politically correct
- Use technology
- Are able to multitask
- Are friend-not family oriented
Gen Xers want a casual/fun/friendly work environment that allows them to be involved, offers flexibility and freedom. They also want an environment where they can continue to learn.
It is important to remember that Generation X grew up in a very different world than previous generations. Divorce and two income families created “latch-key” kids out of many in this generation – which led to traits of independence, resilience, and adaptability.
As a result, it is commonplace to meet Gen Xers who don’t want “someone looking over their shoulder” in a work (or social) environment. They want and are comfortable giving immediate and ongoing feedback, work well in multicultural settings, and take a pragmatic approach to getting things done.
Work Ethic of Gen X
Gen Xers have redefined loyalty after seeing their parents face layoffs and experiencing the recessionary period in the early 1980s when jobs were scarce and job security was poor. As a result, they are committed to their work, to the team they work with, and to their boss, but not necessarily the company they work for. Unlike the Baby Boomer generation which would complain about their job but accept it, Gen Xers send their resume out and accept the best offer they can find.
But that does not mean that Gen Xers do not take their employability seriously. Their career choices are flexible, and they are willing to move laterally, stop and/or start over in their careers. Instead of a career ladder, they have more of a career lattice.
Since Gen Xers dislike authority and rigid work requirements, a hands-off relationship is necessary, coupled with giving ongoing feedback on their performance (it is best to keep them informed of your expectations and the measures you will be using to evaluate their progress) and encouragement to be creative and show initiative in finding new ways to get the job done (in fact, Gen Xers work best when they’re told what the desired outcome is and then told to achieve it). They prefer to work “with” you, not “for” you, and are eager to learn new skills because they want to stay employable.
This is really different from the way to treat Millennials…
The Millennial Generation
Millennials (there are 75 million of them!) are also known as the “Internet Generation.” They:
- Were born between 1977 and 1998
- Celebrate diversity
- Are optimistic/realistic
- Are self-inventive/individualistic
- Like to rewrite the rules
- Want a killer lifestyle
- Have an irreverence for institutions
- Are able to multi-task at a rate faster than any prior generation
- Are nurtured/nurturing
- Treat friends as family/love family
Unlike Gen Xers, Millennials want a structured, supportive work environment, personalized work, and an interactive relationship with their bosses. This group is technically literate like no one else since technology has always been part of their lives. They are typically team-oriented, work well in groups, are accomplished multi-taskers, and are willing to work hard with structure in the workplace.
They acknowledge and respect positions and titles, and want a relationship with their boss. But this is something that many Gen Xers are not comfortable with, given their desire for independence and their preference for a hands-off style.
Millennials believe that their success will be linked to their ability to acquire as wide a variety of marketable skills as they can, and are looking for mentoring, structure and stability in the firm they work in. Thus, they like to be managed and coached in a very formal process. For example, they like set meetings and a boss who acts like their boss. They also like lots of challenges. Effective management of Millennials requires that you break down their goals into steps and give them the necessary resources and information they’ll need to meet the challenge. In fact, successful managers often mentor Millennials in groups since they work so well in team situations. They use the opportunity to act as each other’s resources or peer mentors.
Understand the Trends that Molded Millennials
To understand the Millennials, it is important to understand the trends of the 1990s and 2000s that molded their behavior:
- Focus on children and family in the early 90s
- Scheduled, structured lives as a result of parents and teachers micromanaging their schedules and planning things out for them
- Multiculturalism – kids growing up in the 1990s and 2000s had more daily interaction with other ethnicities and cultures than ever before
- Terrorism, Heroism and Patriotism – The bombing Federal Building in Oklahoma City the Columbine High School killings and, the terrorist attacks on September 11, 2001, and the heroes who emerged from these dark days, all affected them and galvanized their sense of patriotism
- Parent Advocacy – the Millennials were raised by involved parents who did, and often still do, intercede on their behalf
These trends coupled with the consistent messages their parents gave and the school system reinforced had a profound effect on the generation as a whole. Messages they received included:
- Be smart—you are special
- Be inclusive and tolerant of other races, religions, and sexual orientations
- Connect 24/7
- Be interdependent—on family, friends, and teachers
- Achieve now
- Serve your community
Work Ethic of Millennials
All of this has translated into a generation of employees with a different work ethic that is different from their Gen X colleagues/bosses.
From a work ethic standpoint, Millennials:
- Are confident and have a “can-do” attitude
- Are optimistic and hopeful, yet practical
- Believe in the future and their role in it
- Expect a workplace that is challenging, collaborative, creative, fun, and financially rewarding
- Are goal and achievement oriented
- Think in terms of the greater good and have a high rate of volunteerism
- Are inclusive
Millennial Liabilities and Assets
Millennials’ liabilities include a distaste for menial work, poor people skills when dealing with difficult individuals, a tendency to be impatient, a lack of experience, and over-confidence.
Include in their assets the following facts:
- Multi-task effectively
- Goal orientated
- A positive attitude
- Work well with others
In fact, they work and learn best in teams. They also thrive in a structured environment that offers experiential learning.
What do Millennials Want from Employers?
So, what do Millennials want from their employers? Millennial want their bosses to:
- Be the leader – specifically to behave with honesty and integrity and to be good role models
- Challenge them and to offer them challenging, learning opportunities with growth opportunities
- Let them work with friends and positive people in a friendly environment
- Respect them
- Be flexible
- Pay them well
So, what do we do with all this information? Well, we have been giving lip service to the concept of internal customer service, specifically treating employees with the same respect and attitude we do customers. Thanks to the new generation, that is about to change – at least in successful firms.
This meansmeetings needs to learn to meet their high expectations, listen to their ideas despite their lack of experience, learn to respond in a positive/respectable manner than a negative one, and embrace their knowledge of technology (and not feel threatened by it). Learn from them.
Ideas for Managing Millennials
Companies such as Procter and Gamble, Siemens and General Electric have set up tutoring for middle-aged executives and or reverse mentoring programs so their executives can better understand new technologies.
Other changes companies are making include offering:
- Flexible work schedules
- More recognition programs
- More access to state-of-the-art technology
- Ongoing education programs
http://www.abanet.org/lpm/lpt/articles/mgt08044.html Generation X and The Millennials: What You Need to Know About Mentoring the New Generations by Diane Thielfoldt and Devon Scheef, August 2004
http://en.wikipedia.org/wiki/Generation_Y Generation Y
http://www.brandchannel.com/start1.asp?id=156 Who’s filling Gen Y’s shoe’s? by Dr. Pete Markiewicz, May 5, 2003 issue
http://www.usatoday.com/life/lifestyle/2006-06-28-generation-next_x.htm The ‘millennials’ come of age, 6/29/2006
http://www.cbsnews.com/stories/2007/11/08/60minutes/main3475200.shtmlThe “Millennials” Are Coming, Morley Safer On The New Generation Of American Workers, Nov. 11, 2007
http://humanresources.about.com/od/managementtips/a/millenials.htm Managing Millennials: Eleven Tips for Managing Millennials, by Susan M. Heathfield,
http://top7business.com/?id=3023 Top 7 Keys to Managing Millennials in the Workplace by Gretchen Neels.
http://www.abc.net.au/news/stories/2007/07/13/1978431.htm Generation Y disappoints employers by Liv Casben
Connecting Generations: The Sourcebook by Claire Raines, published 2003.
Managing Generation Y by Carolyn A. Martin, Ph.D. and Bruce Tulgan, published 2001.
Generation X by Charles Hamblett and Jane Deverson, published 1965
Originally posted by Jim Wilkinson on July 23, 2013.
Be prepared for how the changes expected in the accounting workplace. But there are a few recruiting strategies that are tried and true – through all generations. Learn what they are in our 5 Guiding Principles For Recruiting a Star-Quality Team whitepaper.