The COVID-19 pandemic has caused unprecedented hiring freezes, job losses, or furloughs in 2020. While the outlook on hiring remains somewhat unsteady, there are reasons for optimism, according to Paul McDonald, the senior executive director at staffing firm Robert Half.
In this episode, McDonald discusses the roles and certifications that are in demand, how remote work’s rapid rise has affected organizations’ approach to recruiting and hiring, and why the broad unemployment rate is not one that McDonald pays attention to the most. McDonald is the guest on the Journal of Accountancy podcast for the first of a two-part conversation. The second part, focusing on company culture and retention concerns, will be posted in early 2021.
What you’ll learn from this episode:
- The types of jobs that continue to be in high demand in the United States.
- How organizations are rethinking geographic obstacles to hiring.
- Why McDonald says that a preliminary discussion about salary is not a negotiation.
- The specific unemployment statistic that McDonald tracks.
- The ways organizations are adapting their pursuit of talent.
Play the episode below or read the edited transcript:
To comment on this podcast or to suggest an idea for another podcast, contact Neil Amato, a JofA senior editor, at Neil.Amato@aicpa-cima.com.
Neil Amato: This is the first of a two-part conversation with Paul McDonald. The second part will focus on retention and the role that organizational culture plays in staffing. That episode will be released early in 2021. Here’s part one of the conversation. Paul, thank you for being on the podcast.
Paul McDonald: Thank you. It’s a pleasure to be here.
Amato: Overall in 2020, you can say that news about job losses is jarring, and likely we haven’t seen the last headline or video crawl about a company needing to cut staff. But amid the pandemic, what’s the bright side for job seekers right now?
McDonald: Well, first and foremost, I’d like to acknowledge that it’s been a very tough time for a lot of workers, a lot of companies, through this pandemic. The impact on existing staff watching colleagues get furloughed, watching colleagues get laid off, has been unprecedented, at least in my work history, which is 40 years.
The bright spot is this: Unemployment rates are coming down. Rates of hiring are starting to pick up. We’re finding there are certain segments of the economy here in the United States, and worldwide I might add, that are thriving, and those are bright spots. Being a finance, accounting, information technology professional is still a great place to be. Remote work, the pivot to remote work, the forced pivot to remote work by employers and for employees has been extremely tough, but also, we’re seeing a number of companies that have gone and thrived in this.
Those who invested in technology prior to the pandemic had an easier time moving into remote work, and those that didn’t have the investment prior to the pandemic were forced [to], and there’s a lot of cloud computing companies that supported that effort. So there are some bright spots here, but I did want to acknowledge, Neil, that it’s been tough on many employers, on many workers.
Amato: Indeed, and that is a good point. It’s maybe tough to talk about the bright side amid that news, but there are kind of some signs that maybe things are on the upswing.
McDonald: Yes, and critical hiring is still happening. Here’s a bright spot. That employers that had openings going into the pandemic, so we’re looking at the first, second, or third week of March and everything shuts down. For instance, say that a company was looking for a controller with specific skill sets and specific industry experience. What we found is that with geographic boundaries dropping, people were hiring remotely. For instance, a company could be based in North Carolina and they were unable to find that skill set in North Carolina for a few months, maybe six or seven months, and immediately, they were able to fill the role because someone in, for instance, Kansas fit the role, didn’t have to relocate, and was able to do the job remotely.
So that’s a bright spot. We are finding geographic boundaries dropping and companies being willing to hire individuals, onboard them throughout the whole process — application, interviews, hiring, onboarding — and those people are now working remotely.
Amato: I’ll come back to that geographic boundary topic, or the lack-of-boundary topic, in a bit. First, I want to check on hard-to-find people are still in demand. I think that’s one of the themes that’s emerging right now. So what are some of those high-demand positions?
McDonald: What we’re finding, and Robert Half covers a multitude of positions on the professional end of things, so finance, accounting, technology, creative marketing individuals, legal, and high-end administrative. If I had to select a few of the hard-to-fill positions, anything to do with information technology security, help desk support. Those individuals were in high demand prior to the pandemic, and what we saw is with this pivot to remote work, security individuals of all levels were highly valued and being hired in. We saw, and continue to see, certified public accountants definitely have always been in demand, low unemployment for the past number of years — I mean, since we came out of the last recession. They were still in high demand, so reporting specialists.
Financial planning and analysis, budgeting individuals, people with strong project management. Because can you imagine this project that we’ve been undertaking now for seven, going on eight months, this has been we’ve been thrust into rebudgeting, reforecasting, replanning, projecting for next year.
All wrapped in with that, the demand has been for experienced professionals that have strong soft skills. You think about individuals. It’s one thing to be in a meeting room. It’s one thing to be where you’re all called in to a general meeting with your department or a town hall within your division, so forth. Now, you’re being asked to communicate through the computer, through the phone, and be effective. And if you’re new to that, say you were hired during the pandemic, those soft skills are being tested like never before and are highly prized and valued.
Amato: Getting back to that topic of geography, you used the example of a North Carolina company maybe previously not looking at someone far away because they thought they’d have to pay moving expenses. Now they can have that person from Kansas. How else is that changing the hiring process, and how does it affect the job seeker as far as their demand?
McDonald: The lack of geographical boundaries has opened up the aperture for companies and for the job seeker. There’s a number of things. We’re seeing individual job seekers move out of a major city, for instance, New York, San Francisco. We’re seeing them go to more areas where they can afford a larger living space. Because there is work from home, and if they had a smaller apartment, they’re now being forced to live and work in the same place. Since they are working remotely, it allows them to have maybe a different quality of life that they desired, but they were tied to that employer in whatever city that was in.
So we’re seeing a flight to the rural, a flight to the suburbs. For the employers and the employees alike, since there is remote, it’s giving them the opportunity to seek out positions maybe they hadn’t sought before. If they were impacted negatively by being furloughed or reduced in staff from their old employers, that’s given them an opportunity to open up the aperture and find more opportunities from around the United States that they’re qualified for. So if they have these in-demand skills that I mentioned earlier, they have strong soft skills, they’ve been up to date with technology, which is highly prized, technology tools, then, yes, it’s been a negative impact, but they are opening doors to new opportunities.
And there’s a statistic that I’ve been following now for over a decade, and that is someone who’s 25 years of age and older and has a four-year college degree. That unemployment rate, historically, is about half of the national unemployment rate. I believe the unemployment rate is, as we record this, Neil, is 7.9% broadly across the United States. If you have a degree and you’re 25 years of age and older, the unemployment rate is 4.5% today. That should create some hope.
Amato: So for those job seekers in demand, if they’re looking at going to a new company, they have options. I have read, I don’t know if it’s actually happened or it’s just been talked about, that some companies have talked of reducing pay for existing employees who do this. If you work in the Bay Area or you work in New York City and you decide you want to move to Grand Rapids, Mich., or Little Rock, Ark., is there a chance you’re going to be paid less simply because cost of living is lower?
McDonald: If you look at our salary guide that we just released, Robert Half’s been putting out this salary guide since 1950, and we’ve always had geographic differences in salaries. And not only do we have some 330 different positions in finance and accounting that we publish in our salary guide, we also have many cities and many geographic areas which have various levels. So yes, they’re impacted by cost of living.
There’s been news that some employers, in the public communication arena, they’re saying that there’s going to be some changes for those people that move from city to city or city to rural. And I just think as a job seeker, you need to consider that prior to not only moving, if you’re employed. If you’re unemployed, you have to be prepared for that discussion, doing your research, and I think that’s where tools like the salary guide from Robert Half or other tools that are online can certainly help you.
What is the cost of living in that area in which you’re moving to or have moved to? What is the going rate for a person that lives in that area with skill sets like mine? Do I have a certification? Do I have an MBA, a graduate degree? Am I up to date with my technology? Then match that up with what you’re seeing in the public domain for job opportunities that are being advertised.
That’ll give you a good indication because many times there is a salary or compensation attached to that job opening. All the research in advance is going to help you when you get into the job interview process and the topic of compensation comes up.
Amato: You’ve led nicely into my next two questions, which involve the word “salary” and then the words “compensation” and “negotiation.” So when someone applies for a job, I guess your studies are showing salary now being discussed earlier in the process. What’s the takeaway from that?
McDonald: Well, I would say that you have to be prepared going into the first interview to talk about compensation and salary. We recommend, again, the research in advance, knowing what your worth is, knowing what the company is potentially offering or what their financial position is. You can find out a lot through the research aspect prior to the interview. But, no. We’ve been seeing studies.
We’ve been seeing where it’s more companies are talking about compensation earlier on in the interview process, one, because prior to the pandemic, unemployment was so low that they didn’t want to waste your time and you didn’t want to waste your time, so it came up more times than not. Again, it’s not a negotiation. It’s just a broad conversation about what are your wants, what are your desires. Are you all in the same lane, so to speak, with the understanding that this is going to be a position for you?
Amato: You did say just now, and also in an earlier podcast, “A conversation about compensation is not a negotiation.” So tell me what you mean by that and how maybe a job seeker can make sure they’re not getting too much into the nitty gritty of pay on a first or second interview.
McDonald: Yeah, I’ve been saying this for many, many years, having started as a recruiter with Robert Half after my public accounting career. I was taught really early that when you get an offer, that’s when the negotiation starts. A lot of candidates for jobs start too early, and you can’t negotiate something unless you have an offer. So broad-brush approach, know the range that you’re looking for. Don’t tie yourself in with too much hard numbers prior to an offer. And that’s where the research comes in, geographic research for positions like that, company research, looking at people that have gone before you and is there some intel you can gather from people that have gone before you with like positions? And know going in that this is the range that you’re looking for.
Again, you know your own cost-of-living needs, and you also know what the position offers. You also note not only compensation and salary, but you also have an idea of what your nonmonetary needs are. What are the benefits that are being offered, training benefits that you have with your current employer? Is there going to be a permanent work-from-home remote opportunity in this new position? All those factors come into play.
But back to your question, don’t negotiate until you have an offer, because I’ve seen many candidates for jobs get taken out of consideration when they come in too hard, too quickly, and start to negotiate before they even have an offer, and it turns off those hiring managers.
Amato: For finance jobs in particular, what’s the outlook for 2021?
McDonald: From a salary perspective, we’re seeing it pretty much flat from 2020 to 2021. It’s been a very, very difficult year with the pandemic. Some companies are struggling to match expenses with revenue. They’re unable to offer raises to the existing employees due to budget cuts or freezes. We have seen, for some of those critical needs that have been open for a while, we have seen compensation packages slightly above where they were in order to attract that talent. But for the most part, we’re seeing flat to 1% increases across the board for finance and accounting professionals for 2021.
Amato: How can accountants then continue to make themselves valuable in the eyes of employers? They obviously are in high demand, but how can that continue? What’s on them to do?
McDonald: Well, there are some things that we’ve really, really looked at hard and some advice that we’ve been giving to job seekers, to individuals that may be in the job market. And that is, one, continue to invest in yourself. This time, we’ve been forced to work remotely, work from home in many instances.
If you have the time in your day due to a no-commute situation, you may have just found yourself two hours. What are you doing with those two hours? Are you investing in yourself to learn a new skill? Are you upskilling yourself? Have you found yourself not getting a job or you’ve found yourself with the same feedback repeatedly: You don’t have the appropriate technology skills. Find a way to upskill yourself with that technology gap that you have.
If you’re getting feedback from a mentor or from a trusted adviser that your soft skills might need some honing. By the way, my soft skills, and probably yours, and everybody’s soft skills always need honing. You’ve got to practice. It’s a muscle that needs to be flexed. Even the best people I know are practicing their soft skills on a repeated basis. That’s a place for you to invest in an online course, or a community chat, or volunteering for public speaking through the video channel that you use, either Teams, Zoom, or what have you.
There’s a ton of things you can do with that free time, if you have the free time. Now, I’m going to speak to the individuals that don’t have the free time. Those are the individuals that, yes, with no commute, they now have responsibilities at home because their children or other people in their house are forced home and they’re caretaking them. Those are the individuals I feel the most sorry for during the pandemic. If you can find time to upskill yourself, do it.
Amato: So on the other side, the employer side, are there any new tactics that they’re employing, for lack of a better word, to attract accounting and finance talent in this environment?
McDonald: Well, recruiting still remains difficult. And I don’t think anybody that I know of and I haven’t found anyone yet in the past eight months — no one had a playbook for a pandemic. The recruiting remains difficult even despite high unemployment. Employers are struggling to find people with these in-demand roles. So they’ve rewritten the book in terms of recruiting remotely. It’s 100% online. It’s 100% video. It really is an interesting time.
They have found that the individuals that they’re recruiting for, some of them are making choices to stay out of the workforce because they do have these new responsibilities at home that they didn’t have before. So attracting some of the most in-demand skills and recruits into their organization — yes, unemployment’s higher, but they’re finding that they’re looking for individuals that may be out of the workforce today. And until things change, they may not be able to attract them in. So that’s been a new challenge.
I think, also, the technology needs, as I mentioned before. Companies have found that they really had to invest hard into this what looks like the new normal remote work. It used to be a benefit that was offered. You could work one day a week from home. You could work for a week remotely and come into the office for three weeks, things like that. Those were benefits from some companies. Today, it’s most everybody is working from home, so the technology investment has been high.
And then how to get those people onboarded and inculcated to what your company offers from an employee perspective. How to assign a mentor or a work buddy, if you will, to help you navigate a new employer workplace remotely. Those are all things that we’ve seen from an employer’s perspective that have been a challenge.
And then how to match, as we talked about before, how to match compensation expectations with where that person lives and what the responsibilities are. If they have moved from, for instance, the Bay Area to Boise, Idaho, what’s the change in pay? What are your policies as an employer around that? Because we have seen divergent policies from company to company on what’s being offered as a result of the pandemic and the remote work and where that person’s working.
So just a few considerations for employers.