Skills Shortage in the Shared Services Center: Is Automation an Antidote?

05.04.2019

Topic: AP Automation | Skills Shortage

I recently heard a presentation held by a key account manager working in a shared services center. It serves around 40 clients, most of whom use services in the area of financial processes. The topic was "Automation in the shared services center."

The lecture was quite good, and one description really stuck with me: "Ten to fifteen years ago, automation was not an issue. If a customer came to us with complex processes or if the document volume increased, we'd just go and hire a few more people. We were able to charge for the additional services, and everyone was happy. Today, in times of full employment and a shortage of skilled workers, this is no longer possible. We just can't get any people to do that classic typing stuff anymore. Automation is our only chance!“

Today automation is a must

This quote gives us a rock-solid perspective on why process automation is no longer simply "nice to have" in day-to-day business; it's not just the voluntary part after duty has been done. Much to the contrary, today the automation of work steps can be absolutely necessary, if not indispensable. But what is it that's actually different now? Why is it that automation today has such a completely different level of urgency and importance than it had just a few years ago?

Demographic developments fuel skills shortage

The reason for this finds its origin in a number of developments. Germany, with its discrepancy between high growth in industry and a lack of highly skilled manpower, is a good example of an economy where this trend dominates. These conditions are also to be found in other countries with economic profiles like Germany's. Thanks to current economic conditions, Germany has almost full employment. This creates competition for qualified employees. No change in this situation is forecast for the coming years. Quite the opposite: the baby boomers (born between 1955 and -65) will gradually be retiring over the next few years, which will exacerbate the shortage of skilled workers.

Demographic change has already begun to make itself felt in the profession of "accountant." Overall, the number of accountants in Germany declined significantly, between 1993 and 2011, falling from 237,295 to 177,057, which corresponds to a minus of 25%. In particular, the proportion of accountants among young employees has more than halved: in 1993, 0.28% of 25-year-olds were employed as accountants; in 2011 the figure was only 0.13%.¹

The "digital natives" come into the accounting department

Also, the qualified, young employees who are now entering working life have very different expectations. On the one hand, these "digital natives" have a significantly higher acceptance of digital assistants and apps. On the other, they are not willing to accept performing repetitive, monotonous tasks as a core part of their daily work. Data input such as typing invoice content into an ERP system is a typical example.

Demand first becomes visible in the Shared Services Center

Different influences thus coalesce: Qualified employees are becoming increasingly difficult to find (especially in accounting); young employees are usually more open-minded about new technologies and have little interest in this "typing stuff". As a result, the acceptance of and demand for automation solutions for accounting processes has risen significantly.

With its specialization in personnel-intensive services such as operational financial processes, the shared services center is the first type of place to be affected by these labor-market developments. But companies with their own accounting department are also facing these new challenges in a similar way.

 ¹Source: "Berufe im Demografischen Wandel", Publisher: Bundesanstalt für Arbeitsschutz und Arbeitsmedizin, Dortmund, 2013