Skills for the future: Your company needs who?

Does your organisation need you? This isn’t a question most of us want to face in early January, but internal auditors need to focus on it with every analytical tool they possess. The world is changing rapidly and providing value this year will not mean repeating what you did last year.

Big-name organisations have failed to survive the Covid onslaught – Arcadia and Debenhams will leave huge gaps in our high streets. Yet, behind the headlines, there is a clear message. These businesses were struggling to keep up before the pandemic. Critics have pointed out that Philip Green failed to invest in Arcadia and his main brands couldn’t match their competitors’ technology and social media presence. Debenhams was burdened with long leases on department stores that prevented it from adapting when footfall changed.

There is a lesson here. The skills that served adequately last year may no longer be enough in 2021, 2022 and beyond. You need to build on what you have, look hard at what you will need in future and work out the best way of getting it.

The issue is far wider than internal audit. A lack of skills to meet future needs is a major risk for businesses. In November, the Chancellor announced a £375m “skills package” to ensure “jobs remain a priority” in 2021. Meanwhile, the World Economic Forum’s Future of Jobs Report recently declared that the increasing adoption of new technology will mean that half of all employees will need “reskilling” by 2025. However, respondents to its survey also estimated that around 40 per cent of workers would require only six months or less to “reskill”, suggesting that this may not involve insurmountable challenges.

Of the ten top skills that employers believe will become more important by 2025 (see list below), critical thinking and problem-solving were the most important – good news for internal auditors, who should be strong in these areas. Emerging skills highlighted in the WEF’s list include “self-management” – which includes active learning, resilience, stress tolerance and flexibility.

More worryingly, a global survey of professionals in the financial services sector by “upskilling platform” Degreed, found that a quarter of respondents believed their skills would be obsolete in the next 12 months and more than half found their job more stressful because they were not confident about their skills. The most sought-after skills for 2021 in this sector were advanced IT and programming, leadership and managing others, and critical thinking and decision-making.

Where are you going?

Internal auditors are highly skilled and well placed to analyse their own capabilities. So, treat yourself as a work project, identify improvements and risks and write yourself a report – with deadlines. Ask also where you want to get to. Where should internal audit aspire to be in your organisation? What tools do you need to get there?

At last year’s Internal Audit conference, Carolyn Clarke, non-executive director at Starling Bank and former head of internal audit, risk and control at Centrica, was asked where she saw internal audit in five years’ time. “I’ve heard people talk about an Utopian ideal that internal audit will be in board-level leadership positions in all organisations by then,” she said. “I’m not so optimistic, but we should certainly be more visible at board level by then. We should have the vision and the abilities to add value at this level and be less process-driven.”

She pointed to the Chartered IIA’s two internal audit codes of practice as an important guide to help teams that were not yet aspirational enough or equipped to take on a leadership role. “Internal auditors can help organisations to understand risks and what executives can do in response to them and this is more understood and important than ever before.”

She added that all internal auditors need to be more “disruptive” – equipped to ask more constructive questions about what the organisation is doing, and why. Most importantly, auditors should be asking what the internal audit function is doing, and why. And they need the confidence to stop doing things that no longer add value.

COVID-19 has accelerated existing shifts. Mark Peters, managing director of consultancy Protiviti, is concerned that the pandemic has widened the gap between internal audit’s current competencies in core areas of governance, methodology and technology and those needed to meet future demands. His organisation’s recent Internal Audit Capabilities and Needs Survey highlighted that even those that have made rapid improvements this year may not have moved fast enough to keep pace.

“We’ve been talking about ‘next generation’ internal audit for a while, but the time for these capabilities is now,” he says. “The pandemic raised questions for heads of audit about how they could best help their organisations to navigate change and accelerated a number of requirements for the function itself to change.” He cites areas such as auditing capabilities, processing tools and enabling technologies.

“Next generation capabilities must now be prioritised, especially when it comes to technology,” he says. “The skills in these areas are currently low at the very time when they are key for development and growth.”

Despite recent advances, more needs to be done. “Audit committees and boards are saying they want assurance activity across the whole organisation and the three lines so they can get greater insight into activity and faster responses to the changing profile of the organisation,”Peters says.

“This is an opportunity to rethink how we do things and how we can make a real difference to decision-making.”

He suggests auditors could help to “reskill” the second line and implement dynamic risk assessment to re-evaluate risks on a rolling basis. “Be aware of the curse of incumbency and keep looking for ways to do things differently,” he warns. “Focus on value – what value are you bringing to the organisation?” Are you showcasing best practice and new ideas? Do you invite guests into the team to present different ideas?

The key is to “reimagine to remain relevant,” he stresses. “Above all, cultivate a solution mindset – if you see a gap and outcomes that are not working, ask what you can bring to the table, don’t highlight it and wait for others to solve it. If you don’t do this, you’ll sleepwalk back into old ways.”

What do you need?

Many of the “new” skills will not be wholly unfamiliar, but require a refresh or upgrade. The first, often hardest, part is to identify what you need. Some practical skills (for example, competency with IT solutions) may take a few weeks or months to develop to the next level, some can be improved via a mixture of practice, repetition and exposure, while others will require a more fundamental reassessment of processes and tools. Even these, however, can be broken down into incremental “chunks”.

“It’s about being braver moving forward,” Peters says. “Pick up the bits you can do something about and look at what you’re currently doing for inspiration.” This may mean looking for different industry experience, qualifications and backgrounds when you recruit new team members as well as training the current team. Networking is vital – take advantage of the fact that the pandemic has made people keen to share ideas, solutions and experiences.

Start new conversations. “If you need investment, don’t start by talking about the technology you need, or the assurance gaps, start with governance and methodology and explain what you would do differently if you had the resources,” Peters advises.

Look to the networks of people you know and use them. Talk to people across the business in a personal capacity as well as a professional one and work out who might be able to offer support or advice. Who can you learn from? Business acuity and communication skills are both key to the continued relevance of internal audit, and expanding your networks across the organisation, sector and profession will help you to practise and develop these further.

As Liz Sandwith, professional practices adviser at the Chartered IIA, points out, the past year has given auditors in all sectors unprecedented opportunities to demonstrate their skills and to get to know new groups of people. There’s nothing like “mucking in” in a crisis to create fellow feeling and build up rapport. Auditors need to hang on to these contacts and experiences and take them further.

While some development and skills needs will be personal, there are common themes. All internal auditors should be thinking about their ability to utilise technology, to identify the most useful solutions and the best ways to use these to facilitate audit processes. Commercial acuity is essential and there is an increasing need for auditors to be more flexible, quick to react and adapt in every part of their work from planning to audits and reporting.

“Soft” skills – including, but not limited to, communication, listening, empathy and imagination – are vital. Leadership and the ability to inspire, influence and negotiate are increasingly important for anyone aspiring to a head of audit role. Courage, self-confidence and assertiveness are essential at all levels.

Teresa Mortimer, former head of internal audit at ARA Gloucestershire, highlights negotiation skills and “courageous conversation skills” as abilities that she looks for in trainees. She wants her team to be able to give robust feedback, to look continuously for opportunities for improvements and to be “inspiring”.

Professional and technical skills remain important, but these are a base line for competent auditors, rather than a development aspiration. Some may become less vital as technology takes on process work. There are many cross-over points where developing one skill promotes another or develops new skills in more than one person (for example, interactions between a mentor and a mentee).

The WEF found that most employers now expect their employees to pick up skills “on the job” and increasingly require skills to be gained or improved via online learning platforms. It also reported a four-fold increase in the number of people seeking online training independently, without support from their employers.

This shows that many people are seeing developing their skills and capabilities as vital for their own futures. Internal auditors cannot fall behind. There are many ways to develop skills on the job via, for example, formal mentors, organisation-based workshops, sectoral or professional forums, free guidance, webinars and apps, and supportive managers should be happy to give proactive team members experience in new areas or different challenges. However, it may be worth funding formal training yourself if necessary.

Fundamental to spotting and developing any opportunity is curiosity and a “can-do” attitude. Practical skills can be taught, but these have to be nurtured and encouraged to bloom – and auditors at all levels must be responsible for this if teams are to meet the challenges of 2021 and beyond.

 The World Economic Forum’s top ten skills that will increase in importance by 2025

1 Analytical thinking and innovation

2 Active learning and learning strategies

3 Complex problem-solving

4 Critical thinking and analysis

5 Creativity, originality & initiative

6 Leadership and social influence

7 Technology use, monitoring and control

8 Technology design and programming

9 Resilience, stress tolerance and flexibility

10 Reasoning, problem-solving and ideation

This article was first published in January 2021.