This year’s holidays
have proven to be an excellent reading opportunity, and one of the highlights
was Robert Peston’s WTF? (Hodder & Stoughton, 2017). It included the remarkable statistic, as reported by the Bank of England's chief economist Andrew Haldane, that
accountants had a 95% probability of vocational extinction. This was after I had read that accounting was
one of the most in-demand vocations around.
So, to quote Robert Peston, wtf?
We can start with
acknowledging that there is currently a very high level of demand for
accountants, and this is a recurring headline within the profession. But what of the future? That is where the uncertainty lies. In 2013, a US study categorised jobs by the
risk of automation, i.e. the extent to which the types of processes involved in
particular occupations could be carried out by robots. The US study is based on a categorisation of
job tasks, known as O*NET. This is a
database of over 900 occupations, which lists the nature of the role by tasks,
technology skills, knowledge, skills, abilities, work activities and work
context. The current list of occupations
dates from 2010. The US study used the
detailed information in O*NET to assess the likelihood of these roles being
automated at some point in the future.
The results, as the statistic
quoted by Peston shows, are quite startling.
As a result, I tried to grasp some comfort by questioning the basis of
the research. Had O*NET correctly understood
the role of an accountant? Is the role
of an accountant in the UK different to that in the USA? Is the US employment context different to the
UK? Had the study correctly picked up
the elevated role of a qualified accountant, as opposed to a finance clerk, or
part-qualified accountant?
Tragically, there is no
comfort in the answers to any of these questions. The role description seems about right for
most accountants and resembles what a UK accountant (as well as a US
accountant) would do. Nor can we take
much comfort from the different labour market characteristics in the USA
compared to the UK: the BBC helpfully converted the US study’s findings for a
UK context, so that you could input your job title to understand your risk of
occupational obsolescence (thanks, BBC!).
The overall result remains true: UK accountants have a 95% risk of
obsolescence. Hairdressers, it should be
noted, are about 33%. Finally, the US
study has taken into account professional status, and while things are worse
for less qualified accountants (book-keepers, who tend not to be fully
qualified, are a 98% risk), they are not good for the rest: tax inspectors at
93%, accountants and auditors at 94%.
Peston also talks about
the need for educational curricula to match future economic needs – so, we
should avoid training people to do tasks at high risk of automation and focus
on those areas where robots are least likely to take advantage (creative industries,
media etc). This seems a rational
approach, but poses two questions relating to accounting:
·
First, why are students
opting to study accounting in such large numbers when it is at such risk of automation?
·
Second, why are
accounting courses so focussed on precisely those numeric tasks that are most
likely to be automated first, rather than the judgemental tasks that might hold
out for a bit longer?
The marketing of
accounting degrees tends to emphasise the higher wages, potentially more
exciting lifestyle (in terms of international work opportunities), and career
trajectory, to encourage students onto courses.
And all of these factors seem to be borne out by current data – but not,
it would seem, the future. The risk is
that we encourage students onto a ‘shooting star’ degree: bright for a short
while, but then fizzling out into nothing.
So the question is: when will these future predictions of automation
start to impact on the current jobs market?
The answer to that seems fairly unclear, but if the predictions are
correct, we should start to see the market for accountants beginning to shrink.
The lesson from both
the US study, and the account in Peston’s book, is that accountants need to
focus on areas where their human skills are most required. Granted, the US data does not suggest a
substantial improvement in work prospects by so doing, but I would take a 94% risk
of automation over a 98% risk. So, how
could accountants achieve this? The
obvious risk within accounting is the focus on numeric calculations – surely one
area that could be automated, indeed has already been through significant
processes of automation with the advent of accounting software. Gone are the days of writing journals out by
hand, or maintaining actual written ledgers, even though the terminology of
accounting still refers to them. Yet
many people enter accounting precisely because they like numbers and
calculations. How do you tell students
that the thing they most like about accounting is, in fact, its weakest link?
So, what should
accountants focus on instead? Following
Peston’s analysis human skills in accountancy all relate to things like client
management (in multiple settings), interpretation of the more judgemental
aspects of financial reporting, or auditing assessments, and so on. Even here, there is a risk that many
judgements will be removed from human assessment purely because they are within
a tolerable threshold of an industry average, and therefore require no further
analysis. But this sort of skill-set is
still more useful for the managerial work contexts to which accountants aspire:
even if you start by number-crunching, by the time you reach middle or senior
management, it is how you relate to people that really matters.
Most debates about
automation tend to focus on the general truth that technology benefits society,
that although there are losers there are more winners. The US study would suggest that accounting will
be a loser in the current process of technological change. So how has it been received within the
profession? Debate within accounting
circles has tended to focus on how, if true, this outcome would end the
characterisation of accountants as ‘bean-counters’, and how it is the strategic
insight of accountants that will save them.
Both of these things are probably true; yet it will not save accountants
in the numbers that are currently employed.
And that 95% risk looks threateningly high to me – either we will not
need accountants in such numbers in future, or something is very wrong in the
data somewhere. I’m not sure which is
true, but the response within the profession seems remarkably cool.
References
BBC News, Will A Robot
Take Your Job? 11 September 2015 (webpage available at: https://www.bbc.co.uk/news/technology-34066941)
Becani, C., Future of
Work: Death of the Accountant and Auditor, 8 May 2014 (webpage available at: https://www.cfoinnovation.com/accounting-compliance/future-work-death-accountant-and-auditor)
Frey, C. B., and
Osborne, M. A., The Future of Employment: How Susceptible are Jobs to
Computerisation? 2013 (academic paper available at https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf)
Haldane, A., Labour’s
Share, 2015 (speech to the Trades Union Congress, available at: https://www.bis.org/review/r151203a.pdf
Nagarajah, E., Hi,
Robot. What Does Automation Mean For The
Accounting Profession? Accountants Today, July/August 2016 (webpage available
at: https://www.pwc.com/my/en/assets/press/1608-accountants-today-automation-impact-on-accounting-profession.pdf)
O*NET Online, a
database of US occupation characteristics (webpage available at: https://www.onetonline.org/link/summary/13-2011.01)
Peston, R., WTF? Hodder
& Stoughton, 1997 (paperback, 1998)
Pettigrew, J., Why CAs
Will Never Be Replaced By Robots, 16 November 2015 (webpage available at: https://www.icas.com/ca-today-news/presidents-column-why-cas-will-never-be-replaced-by-robots)
