With IFRS skills in high demand, organisations face a tough challenge ensuring they have enough informed people to make a smooth switch to international financial reporting standards.
Link: Opportunities in IFRS
And with a financial skills shortage biting nationwide, according to recent research by Accountancy Age, calling in flexible resources and investing in training are two practical solutions.
Recruiting people with IFRS experience is difficult. ‘There isn’t a large pool of experienced IFRS talent because it’s still very fresh,’ says Chris McCann, manager at recruiter Michael Page. ‘Anyone who does have that experience can command a premium in the market.’
While temporary staff and contractors can help, supplies of such people are limited, even though their ranks have been swelled by qualified accountants from other parts of the world, such as South Africa.
One source of flexible personnel, Resources Global Professionals (formerly known as Resources Connection), has been supplying professional staff to work on IFRS projects for clients.
‘We trained all our staff in IFRS, the standards and the implications (ie, what needs to be done to meet them), and we have staff with IFRS experience,’ says Ruth Hughes, client service director, and a former Big Four partner. Requests for people to work on IFRS-related projects represent an ‘increasing area of demand’.
‘The demand is there across the patch, though it’s heightened from a systems perspective in the financial community. And it’s not just about accounting systems, or restating accounting information, but also about change management.’
Resources people can also help to spread IFRS knowledge through the organisations they work with.
‘Training can be part of what they do,’ says John Bronjewski, client service director, ‘including train-the-trainer activities’.
PricewaterhouseCoopers is among the many firms that have also been helping organisations train their employees on IFRSs.
‘That’s going to be a better long-term solution than going and paying ludicrous premiums to recruit people,’ says Stephen Anderson, head of finacial services IFRS training at PwC.
‘We help clients develop their training themselves. We tend to run the first five or six training courses, because clients are so busy they don’t have the internal capacity. Then we pick out the expert users, the people who will be there for the long term, and we run train-the-trainer courses. Then the client becomes self-reliant.’
David Cairns, a renowned IFRS expert and adviser, has himself been in demand to provide training, most of which so far has, understandably, been provided for finance function personnel.
‘I have done in-house and public courses and virtually all the people on them have been from finance and accounting functions,’ Cairns says.
‘Some people have clearly already put in a lot of time and effort into understanding the implications of the changes. Others haven’t thought about basic accounting for a long time.’
While finance staff are obviously a priority group for IFRS training, other staff can also be affected. One bank with which PricewaterhouseCoopers has worked has trained around 1,500 of its staff on the implications of IFRS. Corporate finance specialists and tax departments are also among those that will be affected.
‘There’s a huge demand from relationship managers within banks who are responsible for looking at loan covenants,’ Anderson says. Credit and equity analysts, M&A teams, traders who buy and sell derivatives, tax and regulatory teams and even people at the retail end selling mortgages are all being trained. In corporates too the training demand is wider than purely from finance functions.
‘Investor relations is a big area,’ says Anderson. ‘One client will not allow anyone to go and talk to the City about its results until they have been through our IFRS training and understand the numbers.’
The Financial Training Company (FTC) runs both in-house and public courses on IFRS, including half-day awareness sessions and events lasting two to three days. It has been helping some medium-sized accountancy firms to train their staff.
‘We have also run some huge projects lasting 50 or 60 days at a time for some of the large FTSE 100 companies,’ says Jon Graham, head of corporate training at FTC. ‘We have been going in, working with them to understand the issues that particularly affect them and then doing in-house tailored courses for them.
‘We have also done smaller groups, where there is the finance director and a small team of half a dozen people. We have also had demand for training for non-financial managers, who need to be aware there are changes taking place.’
Classroom-based sessions have proved popular, Graham feels, perhaps because people are so anxious about IFRS. ‘They have been so concerned they have wanted to feel, touch, smell the trainer,’ he says.
The trouble with IFRS training is that unless people use their new knowledge quickly, the newly-acquired expertise can all too quickly be lost again.
‘Until you do it for real, with a client that’s making demands on you or in your own company, you don’t really learn it,’ says Ken Wild, head of technical at Deloitte. ‘So there is a huge training need out there, but you have to do it just in time, and it needs to be on-the-job type of stuff.’
Technology is proving of great use in this context and, like others, Deloitte is making extensive use of e-learning resources for its people. The firm has also made IAS Plus, its extensive IFRS e-learning resource, available via the internet for free. ‘We have had hundreds and thousands of hits,’ says Wild.
E-learning has held the key to success for GlaxoSmithKline, which has successfully completed IFRS training for around 1,100 finance staff spread across many international locations.
GSK identified the key areas of change that adopting IFRSs would cause and turned those into 29 e-learning modules – one for each topic, such as stock-based payments or pensions.
‘The training was quite simple,’ says Paul Blackburn, corporate controller at GlaxoSmithKline. ‘We stated what was UK GAAP and IFRS, and the differences between them, and then what it meant for GSK. We created it in PowerPoint and then gave it to an e-learning provider to create the modules.’
The end of each module contained question and answer sessions, enabling course users to test understanding.
‘There was also a big overview module that was more targeted to executives,’ says Blackburn. ‘If they completed the overview module and the Q&As, they would get a good grasp of the changes. It included systems and coding changes and the approach we were going to take. The more detailed modules were designed for the people that keep our books and have to submit figures to the UK.’
The e-learning modules were rolled out in January 2004 and soon after, to embed the learning, finance teams overseas began submitting IFRS numbers to the UK. ‘We reinforced the training by doing it,’ says Blackburn.
‘Doing it’ is without doubt the best way to really understand IFRS – as many people in many organisations are undoubtedly now discovering.