International financial services provider Allianz has published its global risk barometer for 2022, surveying 2,650 risk experts in 89 countries and territories about the biggest risks facing their businesses in the coming year.
While ongoing issues such as ransomware attacks, data breaches or major IT outages continue to threaten businesses, for the first time since the survey started, the shortage of a skilled workforce has been ranked a key risk globally.
South Africa is experiencing a critical skills shortage across almost all sectors, according to jobs portal CareerJunction, with a specific need for skills in the IT and finance sector.
According to the group’s employment review for 2022, recruiters and HR specialists in South Africa and the world are facing difficulties filling vacancies in skilled positions, which leads to staff shortages, and ultimately impacts business growth and affects a country’s GDP.
“Currently, some European countries like Germany are experiencing severe staff shortages resulting in strained public transport due to a shortage in drivers; patients being unable to be admitted to hospital due to shortages of medical staff, and restaurants having to close early or close their doors entirely due to staff shortages,” the group said.
Although the South African recruitment landscape is vastly different from that of Europe, skills shortages in the local economy are amplified by the ‘brain drain’ phenomenon, which has created a major bottleneck for South African businesses.
Audit and Assurance Leaders face challenging questions: where to secure the skills to support the business and will the brain drain & international remote work impact talent? How to increase business resilience through diversity? This is where DIGGER can support : innovative solutions delivered today to secure leaders of tomorrow.
– Lindi Engelbrecht / CEO – DIGGER Talent
Seven challenges employers in AUDIT face in the next 10 years
With AUDIT roles becoming ever more crucial to the global economy, what are the key issues facing companies operating in that environment?
1. Talent shortage and AUDIT education
One that is no surprise yet remains high on the list to address is the talent shortage from universities and colleges. Higher education institutions still aren’t producing enough qualified graduates in AUDIT fields to meet current or future demands.
2. The rapid pace of technological advancement
The pace of technological change remains exponential as extraordinary improvements in REAL-TIME AUDIT development continue to push the boundaries of companies.
These advancements require new training, skills, tools and approaches for today’s AUDIT workers exacerbating shortages, and they’ll require constant upskilling to stay on top of the game. Cyber security, will play an especially important role in everything from finance to medicine to ID security . And that’s just scratching the surface.
3. Retention
The past two years have demonstrated a remote workforce is viable, productive, and sustainable – but comes at a cost. Remote and hybrid work environments enable low-friction transitions from one role to another, and from one company to another. This, coupled with the high demand for AUDIT skills, means we have the potential for massive movement of talent within and across industries creating organisational instability and loss of core knowledge.
To address this, companies need to improve onboarding and offboarding processes, documentation, and employee and leadership succession planning, and related AUDIT management tools.
Another point to raise is the post-covid-borderless-world, whereby International organisations are utilising exceptional audit professionals from South Africa to work remotely into various regions, such as the UK, Netherlands and Ireland. These opportunities makes it difficult for local employers to stay competitive and thus decrease retention rates.
4. Globalisation
IT is an essential skill needed by many companies but, increasingly, a strategy of setting the bar high and ’following the sun’ is necessary for Audit and support.
Why? Because the Large listed giants have set high expectations around availability and service; always-on and ready with real-time responsiveness. This requires the employment of many skilled audit teams around the globe, raising a challenge around their ability to manage them across multiple time zones, to provide tools and training that support asynchronous work, and dramatically reduce reliance on same-place, same-time meetings to make decisions or plan roadmaps.
5. Data and AI regulation
The past 12 years have seen an enormous data explosion. According to Statistica, in that period the world utilised over 300 trillion gigabytes of data in one way or another. That growth isn’t slowing down and because we have to store, access, manage, use and protect all this data, is actually driving demand for AUDIT skills and roles
Governments are increasingly developing policies and laws that determine how the data must be managed, stored, shared, accessed and used. The sheer magnitude of data, the increasingly diverse uses for data and the complexity of the laws and regulations surrounding it require an extraordinary effort to manage. Going forward, large AUDIT-skilled & DATA-skilled hybrid teams will be required just to ensure the appropriate tagging, tracking, processing, protection, and management of data, requiring skills in data management, data analysis, machine learning, AI, data security, data encryption, and more.
6. The rise of IT Audit
Technology is at the heart of many emerging risks. Whether it’s Cyber Security, remote working cultures or maintaining Operational Resilience, businesses are increasingly reliant on the IT systems that keep many of their processes running.
Demand for IT Auditors has soared as a result. For example, smaller businesses that have never hired an IT Auditor before recruiting people into these roles for the first time, as many of the new and emerging risks they face are technology focused.
Larger organisations, meanwhile, are performing an increasing number of ‘integrated’ Audits, which involve both business and IT Auditors working together. This is because many workflows are now so intertwined with technology platforms that IT Auditors are becoming essential for providing assurance that processes and controls are functioning correctly.
There are no signs these trends are abating. We believe technical skills will continue to be sought-after among candidates, with demand for skilled IT Auditors already outstripping supply.
To fill these gaps, firms should consider upskilling their technologically savvy Auditors, or encouraging them to earn the Certified Information Systems Auditor (CISA) qualification.
Looking further into the future, it’s likely the distinction between ‘business’ and ‘IT’ Auditors will become increasingly blurred, possibly disappearing altogether. This is because technology will be so embedded throughout organisational processes that IT Audit skills could become essential, rather than just desirable, for most Internal Auditor roles.
7. Co-sourcing to fill skills gaps
In an active and competitive recruitment market, finding the right people is always difficult. Even some of the world’s largest companies can struggle to attract and recruit skilled Internal Auditors.
One Head of Audit, who works for a company with over 100,000 staff worldwide, admitted financial pressures continue to be the main challenge when hiring. “While our salary ranges are competitive within the market, there are of course certain industries and locations that pay more. As a result, we can lose talent, as we simply can’t match other offers.”
Even within an organisation itself, there is competition for Internal Auditors. IT Auditors, for example, are often poached into first or second line of defence roles, such as Cyber Security or Technology Risk positions. This only exacerbates the IT Audit skills shortages that we mentioned earlier.
Expectations of the Audit profession is rising. Technology is evolving, workplaces are transforming, and new regulations are always around the corner.
But as Internal Audit evolves into a more forward-looking function, demand for certain skillsets is already outpacing supply. Businesses must therefore successfully navigate a highly competitive recruitment market to secure the right staff and future-proof the Internal Audit function.