It’s no secret that there is a large employee shortage in many industries. Finance and accounting is no exception, and is actually one of the hardest hit fields. A Deloitte survey finds that 82% of big firms are struggling to hire or retain finance professionals.
With the new Artificial Intelligence hype, many companies are relying on the future of AI to help solve their employee shortage concerns. The percentage of financial services executives who said their executive leadership teams value and believe in AI has more than doubled to 64% from 36% of those polled last year, Nvidia reported. In addition, 58% of respondents endorsed the sentiment that AI is important to their company’s success, up from 39% last year.
While AI might improve efficiency in a lot of areas, it is not a good idea to rely on it to completely solve the finance employee shortage. Let’s take a look at why.
1) AI won’t replace everyone
Even in the best possible scenario, where AI becomes incredibly advanced and can do plenty of finance tasks, organizations will always need some finance employees, even if that number is less than before.
Let’s take the case of a stock market algorithm as an example. Many people question why with all of the technology and predictive analytics available today, there isn’t an algorithm that can predict the stock market. The answer is quite simple: If there was a program with the capabilities to predict the markets, then whatever it would predict would end up being irrelevant because too many people will influence it and cause the predictions to change.
In a similar scenario, there will always be a human element of predictive financial analytics that AI can’t replace (at least not in the near future). Human sentiment, market influences, and other human decisions will need to stay in the hands of people. That is in addition to the finance professionals needed to run the AI and communicate the reports.
2) Attracting talent will still be difficult
Rising wages is a big concern among companies. Jobs with employee shortages, such as finance, probably won’t get any better as the employees are in the driver’s seat in terms of salaries. In addition, employees are looking more at the company culture and benefits than ever before.
Working from home or hybrid work models, vacation days, company culture, and the ability to be a strategic partner, are all hot topics for finance professionals. If companies don’t cater to that, then the high level finance employees with experience may find another place that does.
In a recent survey, 36% of the CAEs and directors of auditing cited the rising cost of wages as a top concern today, and 34% noted the challenges of building and maintaining a culture focused on delivering relevance and value amid hybrid and remote working models.
3) There will still be a shortage of employees with the necessary AI skills
AI has the potential to upgrade or replace a lot of the manual work in finance, but someone still needs to run it. The more trimmed down the finance team is, the more that management will expect from those few workers – and that includes a high level of knowledge in machine learning and AI.
But reality shows that even now there is a shortage of finance employees that know AI and machine learning at a high level. As the technology advances and becomes more mainstream, finding employees who have a high level of knowledge in both finance and AI might become harder and harder.
In fact, only 31% of respondents in a Protiviti survey are confident that incoming workers have the machine learning and AI knowledge skills that are necessary to evolve the internal audit function.
Additional AI Challenges
While many CFOs and finance professionals are hoping AI can solve the problems involved in today’s finance team (namely manual work and employee shortages), generative AI comes with some other difficulties that need to be paid attention to:
- Data privacy concerns – Open AI comes with plenty of data privacy, compliance, and legal concerns. This is a big problem that needs to be sorted out before it can become a mainstream tool in finance.
- Cyberattacks – The data is also not secure against cyberattacks and makes for an easier point of entry for hackers. Some IT professionals predict that ChatGPT will be used in a successful cyberattack within the year, according to CIO Dive.
- Auditing – The finance employee shortage hasn’t spared the auditing aspects of finance either. Finding ways to integrate AI and machine learning into internal auditing finance functions is critical in having more complete AI tools that can help all aspects of the finance department.
A lot of hope in the finance department is being placed on AI. In fact many finance and FP&A companies are already investing in developing generative AI functions for their software. But there are still many challenges that need to be overcome before AI can really make a difference and help with the employee shortage. Until then, companies should continue to invest in their employees and filling the shortages.