New skills are required to stay in the game
Stefan Grunwald-Delitz - June 23, 2021
Digitization is occupying the minds of many managers at major German companies. In controlling, too, companies are trying new ways to exploit the possibilities brought by digitization. The focus is often on efforts to further automate and standardize processes and to increase quality through the (supporting) use of artificialintelligence.
However, controllers who are very familiar with investmentcalculations naturally also know that they must keep a close eye on the costs of every investment. Digitization must be financially worthwhile for the company, i.e., the expenses for expanding the IT infrastructure to harness the potential of digitization should be offset by savings elsewhere. Only when the savings outweigh the necessary expenses is there a payback.
Since people are the most significant cost factor in the field of controlling, the desired increase in digitization of processes brings with it an inherent danger for controllers. This is because, at least in the medium-term, digitization activities could have the effect of reducing staffing levels in controlling departments. In the long-term, these could even mean the end of the controller profession.
This gloomy scenario is by no means set in stone. After all, the range of controlling tasks will continue to change in the future, as it has in the past. Even now, tasks for pure number generation and unpleasant transactional activities are gradually being replaced by more complex and higher-value tasks. And even when controlling capacities are freed up by digitization, there is often a new use for them immediately, such as new, more demanding tasks to support management.
The financial benefit that companies generate from the shift in controlling activities is not always easy to quantify. With regard to a calculated payback period, it is sometimes difficult to decide whether savings in controlling headcounts should counter-finance the costs of digitization or whether the resources freed up in controlling will bring greater benefits in the long-term because they can be used for higher-value tasks. A large proportion of the employment relationships in controlling get caught up in precisely this difficulty.
The evaluation of current labor market data from the German Federal Employment Agency now provides initial indications of how the situation for controllers might further develop. Previous analyses have shown that the number of employees in controlling moved continuously upwards until 2016. Compared with the development of employment figures overall and those in other financial professions (such as accounting or tax consulting), employment figures even grew disproportionately high.
A look at the latest figures from the German Federal Employment Agency makes it clear that the development continues to be very encouraging for controllers. The trend of previous years has continued in 2017, 2018, and 2019. During this period, approximately 10,000 additional positions in controlling have been created. This means that at the end of 2019, there were just under 120,000 people employed in positions that correspond to the role profile of the controller. What’s more, the rate of increase during this period was once again well above that of employment figures overall as well as those of other financial professions.
The efforts of companies to harness digitization therefore do not yet appear to be having negative consequences for the employment figures of controllers. This may be due to the fact that the potential of digitization in controlling is only being partially exploited so far in many firms, or to the fact that the shift in controller tasks to higher-value activities is of sufficiently high value to companies that they are not forcing a noticeable reduction in controller positions.
Surely, it is a mixture of both. However, the result for controllers is clear: First, the prospects for controllers are still growing. So far, there is no empirical evidence of any decline in the profession. Second, the transformational pressure that digitization is exerting on controlling remains and will intensify in the future. The threats to the profession, therefore, continue to exist. It will, however, be several years before this might actually be noticeably reflected in the data.
Tips for practitioners
- As an employer, you should constantly develop the role of your controllers! Try to benefit from the skills they have in areas other than their traditional areas of responsibility.
- Controlling continues to promise good career and development opportunities. As a controller, take advantage of them by expanding your potential range of tasks and being open to new developments.
- Do not underestimate the impact of digitalization on controlling and, as an employer, support your controllers in acquiring new skills and adapting to new areas of responsibility.
Literature reference
- Grunwald-Delitz, S./Schäffer, U./Weber, J. (2021): Controller: Does the success story continue?, in: Controller Magazin 45 (2), pp. 6-10.
Co-author of the study
Dr. Stefan Grunwald-Delitz
Dr. Stefan Grunwald-Delitz is Head of Cash Management Group and Division Wiring & Cable Solutions at LEONI in Nuremberg. He has many years of broad experience in controlling at leading German industrial companies. He completed his PhD at the Institute of Management & Controlling at WHU with summa cum laude in 2018. In his research, he addresses in particular the development of the controller profession as well as management controls and dynamics in organizational routines.