How Freelancing Will Affect the Financial Teams of Tomorrow
by Michelle Wang, on Oct 31, 2018
Imagine a world where you can hire the exact person with expertise, industry knowledge and technology experience you need for a project precisely when you need it.
That world is here, now. In just 10 years, 50% of the U.S. workforce — including finance and accounting professionals —will be freelancers. Join Michael Burdick, the co-founder and CEO at Paro, where he and his team empower finance and accounting professionals to embrace the future of work.
Alan: Good afternoon. And welcome to the webcast How Freelancing Will Affect the Financial Teams of Tomorrow. This webcast is sponsored by the Association of International Certified Professional Accountants and the Chartered Global Management Accountant Finance Leadership Program. My name is Alan Crockett and I'm the Director of Sales for CGMA FLP team. And we are thankful that you could join us today.
This webcast kicks off a four-part series for the finance department in transition, a path to success. The genesis for this series came about during discussions with prospects about deploying the financial leadership program as part of their learning management curriculum. We were finding that many leaders were keenly interested in preparing their financial teams for the changes ahead, particularly around technology and the evolving workforce. And how equipping their teams with operational, management and a strategic level skills was critical to their success.
These four webcasts are about building relevant competencies. Competencies that each of us will need as these changes significantly impact the finance function. We're providing participants the learning around those competencies, and for those of you that are CPAs, this session does not qualify for CPE. As we are focused on competency development outside of your state licensing requirements. As a reminder, a chat feature has been enabled allowing you to post questions. And time permitting we’ll address those questions at the end. If we run out of time, we'll send a complete Q and A and a follow up email to all participants. And this email will also contain a link to the recording of the webcast for future use.
So, with that, let's get started. I would like to introduce Michael Burdick, co-founder and CEO of Paro, where he and his team empower finance and accounting professionals to embrace the future of finance. During this presentation, Michael will share recommendations and considerations to help financial leaders discover the best talent for their company. Michael will also introduce a panel for these discussions.
Now as a UNC grad, it pains me to say this, but Michael is a graduate of Duke University, although he did receive his MBA from Northwestern’s Kellogg School of Management. Mike over to you.
Michael: Great. Appreciate the kind introduction. Hi everyone. Really quick, just wanted to give you some background information on what the future of work and the gig economy is looking like specifically as it relates to the finance function. While doing that, I wanted to provide this contextual clues and the data points. And then we'll launch right into our webinar and a lively discussion with a couple of awesome panelists.
The first stat that I wanted to show you all to set the stage really quick, is that it's projected by 2027 that the majority of the US workforce will be freelancing by that date. I mean, this is a pretty big change in the way we do work. And I think of it as a mass migration towards the freelance economy. And really an unstoppable force. And you think about it in a world in which 50% of workforce is not employed but freelancing. We're talking just about a generational shift in the way work is done, especially with the rise of millennials and them wanting to work from beaches in Thailand and things of that nature.
Next up is – not only is this change occurring and projections are by 2027 that 50% of workforce will be freelancing, but it's also accelerating at a rapid pace. That's what this slide shows. So, today's panel is going to address a lot of these impacts on the way in which your finance functions and teams are built. And help prepare you for that future of work. So, just a couple of stats to set the stage.
On top of that, see what we have next: four in five hiring managers are reporting that they're getting more out of freelancers and flexible labor. So, not only are more workers migrating and freelancing but the hiring managers are also reaping the qualitative benefits that it provides. And they're seeing a lot of positive outcomes from doing this.
Last but not least, again trying to rush through these so we can get right into the webinar and a lot of the fun conversation is – let's see what we got here. Organizations and the workforce is evolving. So, I think what this slide is really showing is that leadership knows that change is coming but only a select few have done anything about it. And know how to tackle what that future of work looks like.
So, I think we're going to talk about today some of those tactical ways in which you can adopt futuristic mindsets around freelancing and adopting a lot of the change that is occurring, especially with machine learning and AI really paving the way towards rapid technological advancement. And we'll dive into that a little bit more detail here.
So, first off our belief around the future of work. Just setting a stage around what Paro is and what we believe in. The future work that we're moving towards is one in which we believe it's a boundaryless workforce. Where I call it as labor is the analog. And the future of work will be, in my opinion, optimized at the task and skill level. And that's what I'm talking about this optimization of tasks. For example, it's really hard to project out what an FTE is meant to do. Statistically speaking, 2000 hours of work is really hard to project. However, if you break down things from the FTE level from that individual basis into atoms—is my analogy I'm using here—into projects, tasks and skills. And you can more efficiently connect talent in this case, freelancers with companies and their very specific needs.
So, that's the future of work vision that we have. And for a quick plug on Paro, our mission is empowering finance and accounting freelancers to embrace and succeed in the future of work. And we do this by providing freelancers with a platform for freelancers to grow and manage their book of business. Along with ways to predict how much they're going to make in the future. And our machine-learning algorithms create custom matches between freelancers and the businesses who need their help and support. So, in theory what we do is we help growing companies gain confidence in their finances. And we match businesses with highly vetted –anything finance and accounting related: financial analysts, CFOs, accountants, bookkeepers, etcetera. Who provide remote on demand hourly support when those clients need it. Our acceptance rate is less than 2% and we're here to talk more about how that future of work is impacting the way in which people manage their team’s work and find talent.
So, I'd like to next introduce the panel. You heard a little bit about myself. I also wanted to introduce first off, Chris Downing, who is the Director of Product Management for Accountants and Bookkeepers at Sage. Sage is a market leader for business management technology and online accounting software. That they help companies of all sizes manage everything from money to people. And Chris has recently joined Sage, having been a partner at an accounting firm, a top 100 accounting firm. He brings nearly 20 years of hands on experience from a strategic standpoint coupled with what he calls an infectious enthusiasm in the adoption of technology and business intelligence. I think he has an interesting perspective on how some of these tectonic shifts in cloud accounting are impacting the way in which people do work. So, I'm looking forward to infusing his perspectives into this conversation.
And last but not least, is Ken Fick. He's the Senior Manager in MorganFranklin's Accounting and Transaction practice. He is a CPA and MBA and a seasoned finance professional with over 20 years of experience in industry finance. As well as management consulting with demonstrated expertise in financial planning, FP&A, financial modeling, budgeting, forecasting, technical accounting. And he actually hires freelancers and freelancers on the side. So, I think he can truly empathize with the pain points and benefits of the freelance economy.
So, I think we've pulled together a number of different angles and views on this panel. They're all great thought leaders and I look forward to hearing some of the questions and lively discussion that comes out of this. So, with that I'd like to launch into our first question. Sorry for rushing through all those early slides but I truly believe a lot of the fun stuff is to come. First question is directed at Ken. You've had the interesting experience of both hiring freelancers and being hired as a part time CFO. Can you talk about your experience with both and how have you seen finance teams evolve in the past five years? And then whenever you can get to it how do you see them evolving even further?
Ken: Thank you Michael. I appreciate that. You know, it's different between hiring a freelancer and also being a freelancer. And that's a very vague term, different. Well, how is it different, right? Well, when you hire a freelancer, one thing that I found in any type of specialty, whether it be design, finance, accounting, legal, it doesn't matter, is you have to be more keen. You're aware in regards to what work or tasks need to be performed. So, it actually forces you to be a better manager. The ones that I've seen that try to do freelancing, let’s say at an FP&A function or another function and they don't like their experience or it fails, is typically because they lack the management skills or knowledge or ability to manage their remote workforce effectively. And to create a culture internally. And it's a different skill set, it's hard. And internally, you know, I think externally as a freelancer, I think it actually more valued for my specialty and for my knowledge than when I am internal to a company.
There is unfortunately a bias. They think for many managers that if you're already on payroll, you know, you're doing a series of tasks or operational activities and to a certain extent your advice is discounted as opposed to when you actually physically have to write a check to somebody externally, you feel the knowledge is more valuable. It is a pure perception it is an incorrect perception. But it's a perception that still exists today regardless. And I think that's a challenge for anybody that works internally to ensure to work to get over that. And I'm actually a big proponent of making the FP&A function act like a professional services firm. And that provide services at a certain rate, market rates to the other service lines. And then therefore makes a phantom profit or at least show the advantage of not outsourcing these types of activities. To show the management that the value that an FP&A function on a tangible just pure hourly basis, not talking about efficiency or planning or forecasting or anything like that just pure hour basis of tasks would be able to attain.
And then how have I seen finance teams evolve in the past five years? Well, I may have a different view than the many others but I believe accounting as we know it specifically the accounting close is going away. We are getting closer and closer toward continuous accounting. And that revolves, you know, that you can basically be closing the books all the time. And there is no, you know, five-day or three-day or whatever day close, it's continuous. That increases the volume of data dramatically and the speed of data within any organization small or large. And then we have a skills gap in our economies. And it's all economies it's not just the US economy, it's all economies. Because they have both –we need more less operational accountants and more technical accountants. So, people that can interpret the guidance which has gotten much more sophisticated. As well as a lot more financial analysts. So, people that can have a natural curiosity and are willing to dig into and explore and explain and enhance things. And those are the things unfortunately I don't think we're taking an up end value in our educational system or within our careers. You know, luckily I'm also a CPA and a CGMA so I’m very fortunate to continue evolving. You know, my education since I’ve graduated and do it every year. And I think it's hugely important. So, those are really the key areas I think I've seen change.
Michael: Awesome. Really appreciate you sharing that Ken. Chris, I think you have probably a similar yet a little bit more progressive view on this world. So, coming from the accounting space and someone who's a product manager for a product used by a lot of accountants and bookkeepers. What changes have you seen in the way people work? And how are products used differently today than just a few years ago?
Chris: Yeah, so as you might tell from my accent I’m not from the US, I'm from the UK. But I think what's happening in the UK with technology, how accounting and advisory service is changing is no different to what's happening in the US. So, yes as you explained at the beginning of the call, my background is I'm an accountant. I still feel I'm an accountant. I've only been at Sage for five months now. And I always felt that technology was a way of actually bringing people together. Not because of actually trying to make things easier but actually a discussion point.
So, back in practice, I basically create [Inaudible 0:14:15] business intelligence well over 10 years ago. And that was all about bringing data together to create the discussion point and the advisory point when working with clients. So, in that time, technology or accounting software has just got better. And certainly in the last 18 months the drive for cloud and the drive for let's say real time information has never been so much in demand. But this will bring sort of some of the challenges which show it was Ken who was speaking about in terms of how does the relationship fit with the clients either the person paying the bill? But also what type of skill set are we looking for from the people who are delivering the services?
And I think this is where software and product is there to facilitate. But it's not just all about sort of AI and Artificial Intelligence and blockchain i.e. basically creating a seamless connection between transaction A and transaction B. Doing the processing of the account information automatically. But the end of the day you still need a human touch, the interpretation of that information. And I see where products are changing and evolving whether that's accounting, whether that's payroll and HR or bank payments there are different roles which products can play. And I can see that accounting products will be part and parcel of everyday life and business. But the way they get consumed by the business owner as well as the accountant will differ depending on its business use.
So, I’d like to sort of partition it in terms of let's say when you're looking at the reporting side of accounting i.e. dashboards, analysis, alerts, I can imagine there are going to be three stages. One being passive i.e. the accounting software is working in the background basically doing the checks and balances. The business owner, the accountant doesn't need to get involved.
Then you've got the proactive side whereby the accountant has real time access to the financial information. But is alerted and prompted when they are needed to get involved and have a discussion with the business owner.
And then the reactive side where those software might play a part, no one’s monitoring anything but that's where the real value kicks in. And that is actually where the differential between let's say the continuous supply of workforce i.e. have your accountant involved on a monthly, a quarterly, maybe weekly basis. To let's say the extreme side of where business uncertainty or business risk kicks in. And therefore you need to get your expert to call in.
And that's where the freelance economy kicks in quite nicely. Because when there's uncertainty, when there's risk to play you need your expert. And that is not someone who will be there day in and day out that's when you need to get them involved. Hence why the software needs to be working in the background to support that model. But what we're seeing in terms of how products are changing facilitating the change in the workforce it's the whole ability to work anytime, anywhere, anyplace. And this is now driving the change in terms of maybe how UK accountancy services have been delivered. Plus also the nature of the workforce. Because there has never been such a greater demand for that sole practitioner, that expert, the person who knows pretty much everything about the business.
And this is where the relationship with the trusted advisor has never been so important. But also we're seeing from the statistics because I think the US and the UK profile of a typical accountant is about the same. Basically between 70% and 80% of all practitioners are either training by themselves or only one or two employees. So, naturally a majority of the workforce are quite small in unit. And this is where one of the challenges of these small accounting unit is bringing in the expertise. And this is where the ability to actually call upon the expert almost through that sort of virtual LinkedIn approach. I need an expert to discuss some tax legislation. Or alternatively when we're looking at the growth of the economy and the needs it's all about data analytics trying to get that expert involved. That is certainly where there's going to be more of a need for let's say engaging the right people for a task which is going to have to happen like tomorrow. But also getting the right value for that. Because this is where the notion of time and the notion of value of the service being delivered is becoming even more important. Because one of the challenges of being an expert in your field is how do you leverage value when actually the solution you may provide may only take you half an hour to deliver? But actually the value to the recipient is immense. So, one of the challenges clearly going forward is the amount of time people spend on tasks compared to the value offering and how they actually charge their fee.
So, how are products changing? Well, products predominantly were let's say desktop based now they are becoming more cloud or actually, I like to say, more connected. But it’s not just about having technology available in the cloud it's about having the right technology available to you but connected to additional services. But this is where –.
Michael: It appears that we had a little bit of a technical difficulty in that Chris dropped off. So, we'll get him back in here pretty shortly. Back to you Ken real quick can you help us define the freelance economy a little bit? Because I think that's one thing that I glossed over really quickly. I can fill in any gaps that you might have. Since we're talking about flexible labor and freelancing and the rise of the gig economy and a little bit of context may be helpful for the rest of the audience.
Ken: So, absolutely, when you talk and when people talk about the freelance economy, it's not people that are solely independent. I'd say and you can correct me if I'm wrong Mike, but I'm pretty sure right now at least a majority or 50% use this as a side business or a side hustle. Is that generally correct? Am I off by the statistics?
Michael: Actually you’re correct.
Ken: Okay. So, you know that's a great way and this is how we're seeing the growth of the freelance economy and the growth of really that the millennial cohort drive the growth of the entire population of freelancers and the way we work going forward. So, instead of fighting it let's go with it. You know, and that's – you'll have – we’re not scared of freelancing, is that you have people in all spectrums of the career path from the low level financial analyst up to CFO of Fortune 500 companies. And they're all within the spectrum. So, they can all be pulled and bolted into an organization based on the need and timing. And the best timing for the organization, the person to fulfill those needs which is huge.
As I see work continuing, I actually envision more of a – for lack of a better term, a cooperative or freelancer unions that evolve from the we work environment and from all of these coworking spaces that have evolved through many metropolitan areas. Where, you know, employers can tap into this resource have local, ready available resources at these coworking locations. To help fulfill them and achieve their business goals. And actually eventually and possibly even bringing them on full time as needed. So, and then actually having them roll back into the freelance cooperative or that type of environment again. And this is easy flowing, right? I think it's less risky for firms, it's a high value for individuals in regards to getting the experience they need. They're going to build their resumes through a whole bunch of different experiences faster than if they necessarily would work in a large let’s say a large Fortune 500 organization. And diversify their networks to expand their careers professionally in the future.
Michael: Yeah, I think that's spot on. You're thinking about it from a diversification of skills and responsibilities. I also think about it from just the pure qualitative benefits of freelancing. So, there are a number of different ways that humans can feel fulfilled. And with the rise of millennials being one of the age brackets that's becoming a larger, larger component of the workforce in the US. Like millennials 72% of them say they want to be their own boss. That's a pretty astonishing statistic.
So, even though a lot of us may be like, “Well, I'm not sure if this trend is actually going to occur.” The qualitative benefits are real because it provides choice and flexibility and autonomy and freedom. And if you think about the stay at home dad or mom who only wants to work 20 hours a week. And make it feel as though their voice is valued and as if they're truly heard, that's where they can realize those benefits in the freelance economy. So, for us it's a movement towards a boundaryless workforce, because labor today – the labor workforce itself is imbalanced. Especially at the geographical boundary location. And so, what the freelance economy provides for companies is access to these high caliber or high quality talent that they never had access to before.
So, if you're based in New York for example, and you’re a high caliber finance professional, you can work with a company that's in Utah and provide them with your expertise. That's the beauty of this boundaryless workforce. And if you think about the costs to companies of hiring full time employees it's a pretty high threshold. And so, they're just a lot of benefits on both sides. And I believe that with the migration towards the freelance economy that companies are going to be forced and really almost like have their head against the fire in terms of looking to online labor marketplace solutions to find that caliber of talent. Because freelancing is a lifestyle choice and just a completely different demographic than what a full time employee usually brings to the table. Looks like we have Chris back online. So, Chris if you wanted to add any contextual information around what I just said and would love to hear you as well.
Chris: Yeah, I think something unfortunately happened to the long line between me and the US. Yeah, sort of falling back on what you are talking about is because what I found personally over the last 12 months is a lot of practitioners who maybe – recently working in a larger accountancy firm are now going out doing their own thing. One, because of the aspiration to basically control how they want to run their own business. But also the barriers to actually set up have never been so small. Because once upon a time, whether it was actually setting up your office or the technology or the infrastructure of the business would have been challenging.
But these days if you're an expert, whether you're in accountancy or any other professional services it’s never been so easy to actually start up your own business. It’s basically because the access to information and also the ability to share information has never been so easy. So, what we're finding is a greater draw and also the aspiration of actually working as an expert in their own time. Also controlling how you want to work. Because I think one of the challenges with maybe some of the UK accountancy firms is the fact that unless you're a firm which has been created in the last 5 or 10 years is trying to break down the historical barriers in terms of your ethos and philosophy and where you want to go. But it’s also changing in terms of how people are wanting to engage and they’re professional. You're no longer a professional which you work with once a year or your accounts on tax. But it's that trusted advisor who's available on a monthly basis or weekly basis. And you're no longer working on the books but within the books. So, it’s a change of relationship which is going forward, which is also driving a change in how professionals are engaged.
Michael: Thank you for filling the details Chris, really appreciate it. We had a question come in just asking how to define freelancing. And in essence using today's terminology and language I would just say they're the equivalent of an independent contractor. But freelancers don't necessarily like to be thought of that way. Because it is essentially objectifying their skill sets. Versus they are super highly qualified, very highly talented folks who want to have that that choice and flexibility of freelancing working i.e. on an hourly basis or on a project basis. Versus having the confines of a full time, full day job. So, hope that answered that question a little bit. Shifting gears a little bit here, Ken if you could help shed a little bit of light on how the finance teams of the future are changing in terms of their structure and how companies and enterprises are having to shift their hiring processes because of those changes.
Ken: Yeah, thanks Mike. And it goes back to what I said in my previous answer of the question is the dawn of continuous accounting. The advent of machine learning and robotic process automation within the transaction focused areas of accounting. So, order to cash – I’m sorry, record to report, you know, procure to pay, order to cash those types of three buckets are getting more and more operationalized within the technical side or the robotic side. That frees up a lot of time to focus on the just fire hose of information coming at you from the operations on both the financial as well as operation side.
So, what I'm seeing inside a company is the need to tap into skill sets that they didn't have before that their current people need. There's a lot of accountants but not as many financial analysts that can work in these types of environments. They have to have the technological skills, the statistical skills, the knowledge in order to do that. Statistics is a part of this, coding as well too, as well as finance and operations. It's a basically almost independent freelance renaissance person that can be good at all those. Oh, yeah and he has to be able to tell a story and communicate it effectively via a narrative as well as presentations and orally. That's not an easy combination to find. Not a lot of people have that.
So, inside an organization finds that need. They find they gravitate toward those people that can manage that. And they can deal with that type of information flow. And manage it and communicate it to the people that need it to make the decisions. And they look both internally and externally and whereas they look internally, they're finding it harder and harder to hire those as a purely retained individual and more likely finding it externally through these independent sources that can provide this knowledge as well as providing to multiple other companies.
So, they're getting it cheaper, when they need it at a better time and with more knowledge through multiple enterprises that this person is going to provide to them as opposed to just hiring internally. Is it going completely their way? Absolutely not. There will always be people internally for accounting and finance and I think it's critical that they exist. I'm just saying that there's more and more flexibility in the need to leverage outside resources in order to get those skill sets that are needed to drive a business forward.
Michael: Without a doubt. Just shedding a little bit of light for the audience on some of those specific projects. And Ken you could probably fill in some gaps here as well. I think a specific project based expertise as things like government regulation changes where revenue recognition issues pop up and internal staff can’t handle those. Or implementing new zero based budgeting processes or going through a silent M&A process. I think all of these things are just niche project requirements that an internal staff may not have the expertise to necessarily tackle on a fluid fashion. I don't know if you have any other ideas Ken or Chris about those specific types of projects.
Ken: Yeah, I’ll just jump in really quick.
Chris: I’ll just – you go ahead.
Ken: Go ahead Chris. Okay, I’ll go first Chris then you.
Chris: I’ll take this one. Yeah, all right I've seen this in real life as of today. I went to see a customer, an accountancy firm and they’ve had that situation whereby they're trying– going through this huge change management and there's been a project which needs to get done. And they haven't got the internal skill set and what they've actually – really nice to see they've gone out of scope, they've engaged an accountant who has a specific type of skill set. In terms not only project management but some of the technical skills of manipulating Excel. And they've brought their skill set in for a short period of time to deliver a project in a timely manner.
So, that is where that sort of experience is happening. And also what they're realizing is the fact that there's a skill shortage within the firm as well. And this is one of the challenges we’re discussing earlier in terms of the changing characteristics of the profession in an accountancy firm. It's more than just somebody who can crunch the numbers it's the interpreter, but also someone who can think outside the box and bring solutions. Which comes down to the next problem as an organization grows. Is how do you actually internally train that? And you don't do so overnight it’s a really long journey, long approach. When actually when you've got clients who are demanding a solution now, the only way to service that solution is to go externally and seek help.
Ken: I just wanted to tap on that a little bit more. Chris, I think is spot on but Michael what you had mentioned before a lot of the examples you gave are event driven. And like Chris was mentioning as well too, tapping external resources because of some event. Whether it be a technical accounting change, M&A process. Right now that is a huge opportunity that the independent consultant or external resource and the accountancy firms and consulting firms are able to help companies with. With my work with Paro, you know, very similar that they focus on high growth companies than in the small businesses. They need that – they can't afford to necessarily hire a full time CFO. But yet they need that knowledge base to guide them on financial decisions that they don't necessarily have the competency themselves. And it's just a huge opportunity to help people which is something I love doing.
Michael: Yeah, I love that and I can echo both of those sentiments. My belief is that the future of work is all about the people. And I think Chris kind of said this a little bit. There's a lot of talk about AI and machine learning. And that is a rapid acceleration in the way in which the process – processes are – and taken internally. But AI is a tool, it's not a solution. So, if you think about AI itself, it is something that is a digestible task that can be refutable. And you can train a computer to do that specifically.
So, in the future I think of people as having augmented intelligence. And AI is where tasks can be done better, faster and cheaper. But AI still needs direction. you need people to understand what the fringe cases are. And so, that's why I truly believe that the people that are going to succeed in the future and especially freelancers are going to be problem solvers. I think of people as craftsmen not the tools themselves. And I think that employers and the freelance economy need to build better people for the unknown. Build them for the unknown versus upscaling them.
What I mean by building them for the unknown is making them more resilient, making them more growth minded. These are all things that are incredibly important. What I mean by growth minded are being creative, being adaptive, and being problem explorers. I had a specific example of a thought leader within the AI community I talked to and she was like, “You know what I did? I just went and took apart a toilet the other day because I was curious as to why?” That's the type of like problem explorer that I'm talking about. Where I think employers and managers and leaders need to train people to go out and fail. Train them to be more resilient. So, failure has to be something that is accepted and encouraged. Because failure builds that resilience and if people go out and seek those growth opportunities, then they will succeed within this rapidly evolving environment that is the future of work.
Ken: Fail often and fail fast, right Mike?
Ken: Can I ask you guys a question?
Chris: And I was going to sort of build upon that. Because when we're talking about the change of the compliance to advisory model, and you're trying to get people who can actually advise and help businesses, sometimes the advisors need to experience but also you need experience a failure. They need to be in a situation where what they’ve tried as a solution hasn't worked. And when you're in an employed situation applying that element of risk and be seen to fail is never actually seen to be as a good thing. However, as a freelancer, somebody who's controlling their own destiny, they can play and babble and experiment which actually creates an element of innovation. Which actually is one of the challenges in terms of the next stages of let's say a more collegiate workforce. Is in terms of how do you encourage that ethos that you’re allowed to fail. Because actually out of three or four projects one of them is going to be successful, isn't it?
Michael: Yeah, the way I think about that Chris is, as the employer or the manager, you have to encourage failure and think about on an individual basis what that failure means. You don't want it to be a project or a task or something where it could lead to systemic risk, where you're simply making the company go under if that initiative fails. But you're encouraging projects and tasks for the individual to fail, that can be a key learning opportunity for them specifically. So, I think it's up to the employer and the manager to be thoughtful about what those opportunities are. Where you can encourage a freelancer or a full time employer to fail – full time employee to fail and be thoughtful about which ones are not appropriate.
Ken: Well, I kind of agree with you guys. But, you know, I guess I want to pose a question in regards to both of you. Is that the world doesn’t not reward failure it just doesn't. I mean unfortunately we have – we're dealing with a generation that have got participation trophies. I’m sorry they just don't – they don't work in the real life. You don't get a trophy for showing up to work. So, risk – they have to take on the risk and they do have to fail. But how do we as more senior professionals provide the support and guidance that they need in order to become a freelancer take on a stretch project potentially fail and actually make a mistake? And it would hurt them financially, it would hurt their client. It's not a fun feeling, okay? To do that, but still pick themselves up from that point and go on and get the grit to continue on working and building their relationships and building their knowledge base and building their careers.
Chris: Does it not suggest that in a freelance economy you need to ensure that you work in the right network? i.e. the ability to actually share ideas before you go too far down the line to the point of failure?
Ken: Great point.
Chris: Which I think – which is actually – it's the environment whereby a business can engage a freelancer but their understanding is actually behind them they have a really good working network to share ideas. Because I think this is where it's so important. The fact that with change, with technology and with the inevitable uncertainty of trying something new is that you understand actually what are the possibilities. And I think this is where the possibilities of actually going down the wrong route but actually be able to back – rewind quickly is by sharing what you're about to be doing. And it's the whole team effort sharing ideas and the collaborative nature. Which actually goes back to almost like the whole employed workforce situation. But actually in a way whereas actually you’ve got constant contact, isn't it? It's a hybrid situation.
Ken: I love that idea. I love that teeming idea, Chris. That’s a really – that's important. And that's a great idea. Mike, do you have any thoughts?
Michael: Yeah, I think what you both are saying is that the idea of building resilience and a growth mindset that encourages failure on an individual basis comes from two different angles. It comes from the leadership and the managers. But it also comes from the freelance marketplaces where all these freelancers are finding and sourcing their work. And it's something that we at Paro take pretty seriously. Sure, we're satisfying the primary needs of freelancers by helping them with income predictability. But we're early in the process of trying to solve secondary and tertiary needs of freelancers as well. And one of those is a community. Freelancing can be lonely and I think there needs to be an environment a lot of these freelance marketplaces where freelancers can share in those failures, they can share in those learnings and feed off of each other. So, that's where you can have rapid movement in succession I think.
Chris: And also I think the hope – opportunities with the community side is the challenge with the freelancer not only is it lonely but also managing your own workflow. Because if you're really good at your task you could be absolutely overwhelmed. But if you're working the right community where you're not only sharing ideas, but actually possibly resharing tasks and be able to delegate jobs. Which basically means that actually you've got a stronger network and also by promoting your own services, you're able to deliver on a timely basis as well, isn't it? Because I recognize that back in the UK because with bookkeepers that's an extremely lonely environment. Apart from working with let's say the end business owner as a bookkeeping network, you may not get chance to actually share ideas. But actually where it's worked really well is where you've got bookkeeping clubs. So, the freelancers get together once a month, once a quarter, and not only are they sharing ideas, but also there’s the ability to actually share work. Because sometimes they get too busy. So, maybe that's one of the advantages of actually this whole community network as well.
Ken: I love that idea, it's a cooperative idea I talked about before. And like – freelancers, you know, they probably need to go on vacation and to share that work in these bookkeeping clubs. And this more of a cooperative or union based environment. I think it's a great opportunity to grow that idea to expand the freelancer economy. And also provide stability for a lot of people.
Michael: Great, really appreciate those thoughtful additions there. I want to make sure we leave enough time for Q and A. So, Alan, did you have any questions you wanted to ask or should we just wrap up and to a few final words of wisdom and thoughts?
Alan: Well, we've been getting lots of questions in and answering some of them that were really point specific. But, you know, Mike, I actually have a couple. And I'm going to get to some that are also posted as well. But the shifting hiring process was, you know, particularly interesting because, you know, on the one hand you have a group that says they want to be project based employment and they won't join the company no matter how much money you pay them. And on the other hand, you have a group of employees that would stay at a company longer if senior management and executives would actually invest in their career development. Where does that leave employers that need a higher skilled designation like a CPA or our own solution like CGMA? And should companies continue to invest in those employees? Or are contractors going to do their own self education or is it really both?
Michael: Definitely both. As I mentioned earlier, it's – the future of work is all about the people. So, in today's hiring environment it’s really hard to find great talent. But here's the fact is it's always hard to find great talent. So, enterprises that are – and companies that are much more progressive in the way they think about their talent. And the folks that they have internally are moving towards something that's called Total Talent Management. And the HR is focusing on strategies for both full time employees as well as contingent labor which is the equivalent of freelancing as we're discussing today. And my opinion is these hiring managers and enterprises and companies should go where the talent is and don't force any strategy.
As I mentioned earlier, freelancing is a lifestyle choice in most cases and therefore it's a completely different breed of talent. It's a completely different sub segment of the talent pool. And a lot of these progressive companies are realizing that. And so, they're going to the locations where that top talent exists. So, my answer really is both, you know, invest internally in employees but also invest in what the future trends are looking like. And go where that great talent exists.
Alan: And that’s interesting because one of the questions... Go ahead.
Chris: Sorry. I was going to say following on from that is a case of where you've got employers concerned they won't be able to recruit a workforce. You've got to sort of take some – the reassurance that human beings are tribal by very nature. We like to work together, we all like to work in groups. And therefore naturally there's going to be always be a bit of both. And even where you've got freelancers, the freelancers will be wanting to work in some sort of team environment. So, it's a case of there's always going to be an element of both parts of working systems. Thirdly, employers want a consistency in terms of resource availability as and when they need to do it to deliver the core of their offering. But clearly when there's a requirement for additional resource that's when they will reach out and get that support. But still, it's going to be of a collaborative nature.
Alan: So, it’s interesting because Mike one of the questions that came up at you is where, you know, how do you connect these two together? Is it traditional job boards? Like Indeed or Monster on the specialized sites? I mean, how does the employer go find a freelancer? And how does the freelancer hangout where an employer can find them? Is there going to be a rise of specialized connection sites or are traditional sites going to adapt?
Michael: Yeah. So, appreciate the layup there on Paro. I’ll just segue really quickly into a couple words of wisdom and thoughts that I have. And then Chris, if you'd like to share a couple of them and Ken might actually relate specifically to that. I think my challenge for all the audience members here today is to have an open mind and go and test online labor marketplaces. So, whenever I talked earlier about having a growth mindset and building resilience and thinking about being a problem explorer, part of that is going out and experimenting and imploring the people around you to do the same. So, test platforms out like Paro we’re a verticalized, very focused managed marketplace on finance and accounting talent. But there are other platforms out there that exist today for design and development, for marketing, for consulting in general. And I think those are the platforms that are going to flourish. Because wherever the top talent in this case, freelancers wherever those freelancers exist those are the platforms that are going to succeed. And we're definitely the leader within the finance and accounting arena. Chris, do you mind sharing a couple final words and thoughts for the audience?
Chris: Yeah, I think we've discussed some of the important factors already. But I think the key thing is that actually technology is going to continually play a part in this. Because the world is getting smaller. The fact that we're talking now sort of proves the point. In terms of it may be 4,000 miles between us but actually we're having a very sensible and constructive conversation. Which means actually when you're talking about resolving problems, they might not even be someone as an expert you're going to call upon literally down the road, it could be an international support. Which I think is actually very important to understand some of the challenges actually.
In terms of sharing information because we're all talking about security who has what information. And I think this is where cloud accounting or cloud data source is going to play an important part. Understand the validation of who has what control and ownership of information. So, I suspect that there's going to be an awful more conversation about the subject even at our local geographical level. But I think this all goes back to the point is the fact that people always want experts for that sort of understanding the business, turn the wheel on the analytics. But also creating that sort of those key decision making items. Because sometimes you simply don't have the expertise internally so you are always going to call out for an expert at some point in life. No matter how good you think your employee base is.
Michael: Appreciate those final thoughts, Chris. Ken, can you share a few parting words as well?
Ken: Sure, I would encourage everybody to increase their flexibility in regards to their career knowledge and the resources that they bring to both employer as well as clients. Since the sun setting of the industrial age and the dawning of the technology revolutions that we've felt throughout the world it's shift for education, which we just recently talked about, from being able to start with a company and them train you and you work there for 30, 40 years until your retirement. To a complete 180 to, you're required to or it's more beneficial for you to seek external education via certifications and formalized learning through universities or other technical schools. And then, you know, continue learning throughout your career to keep those skills up to date.
You know, and like you said both you have mentioned before, it's important for both the internal employer as well as the external freelancer to do that. In essence when you work for a company you're still just simply a freelancer that's really locked in with a salary. And that's a great way to look at yourself and your career. That you need to continuously evolve yourself to remain relevant in whatever you're doing. And whatever you plan to do in the future. It's not just a, you know, one shot and you're done. Education and learning and failure which is a form of learning as well as successes takes time. It takes effort and it's something that you’ll get better at as long as you continuously work at it time and time again every day, every month, every year.
Michael: Great. Love it Ken. We're now going to go into some Q and A because we only have 10 minutes left. The first question that came up actually, I think this is a great question for you Ken is how have your employers and clients embraced the fact that some of their dedicated FTEs are embracing freelance on the side? Is this viewed as sharing expertise they have invested in? And Ken, I singled you out on this one because you are fully employed but also freelancing on the side. So, curious how your employer views freelancing.
Ken: They actually – I won’t say encourage it, but they support it or acknowledge it, I should say. So, very, very important, I do not work on freelancing at all while I'm at work. And while I'm on time for the company, that is unethical and I would never do that. But to the extent that I do freelancing it's with clients that typically wouldn't have been able to afford the resources of a large consulting firm, the typically smaller businesses.
And it's not that they can't it’s just that it's much harder for them to tap into that resource. So, I can provide it to them at a lower cost because they don't have that overhead, I might spare time to help them. And I'm also flexible to do it. I got a call at eight o'clock last night right before I put my kids to bed for one of my external clients. And she was very concerned because their revenue was going to fall short.
“What are we going to do? What are the decisions we need to make? I need your help Ken, what can you do?” I'm like, “Okay, well, we can work through it.” And I have a plan that I put together how we're going to address some of the shortages and then get her back on track. And, you know, that's a great – I feel great about that. And, you know, you have to balance that. They have to be willing to do that outside of your working hours to help people in different types of environments achieve their goals.
Michael: Great. Appreciate that context Ken. We had another question related to AI and digging into that a little bit more. So, Chris, maybe this one would be a good one for you. The question is in speaking with audit management, one of the areas that they are most concerned about is their lack of knowledge about the future impact of AI on audit work. For seasoned finance professionals who may not be as familiar with AI one, what are your thoughts about how AI will look like in the future? And two, where should freelancers start/focus learning related to AI in preparation for the future?
Chris: Yeah, I think this is where technology is going to play the biggest impact sort of in the accountancy side with sort of audit. Because these days, the ability to literally audit 100% of the finance data almost instantaneously is nearly there. But also it’s the interpretation and the identification of potential risks now and also possibly in the future. Which basically means that once upon a time, audit, I don't know how it’s deemed in the US, but audit is almost seen as a compliance exercise as in terms of where's the value? You're basically – you're getting an auditor in place to literally sort of validate the quality of your accounts and where's the value?
When I think where AI kicks in, it creates the opportunity to actually create real value from audits. Identifying opportunities for change, efficiency gains, productivity, opportunities for growth, because what it means when a business is prepared to invest so much with a CPA to actually sort of validate the quality of the work and the accounts. Suddenly, there's headroom, space plus you consider the value proposition of working with a business. And this is the whole point of what advisory is all about. Technology is basically creating time for accountants who really understand the business to actually flex their muscles in terms of knowledge. And actually deliver services outside the normal realms of accountancy. And I think this is what AI and audit management is going to be able to do. Basically automate much of the function and identify opportunities for additional advisory and other freelancing opportunities as well.
Michael: Yeah, I really agree with a lot of that. I think people on this webinar already spoke a lot about how financial analysts and forward thinking is incredibly important. Just want to hammer home the fact that future of work again, is all about the people and having a growth mindset, being a problem explorer. I think that is the mindset that's incredibly important. And that's how you succeed in this future. So, just to wrap things up a little bit. Those are my perspectives. Ken, did you have anything to add there?
Ken: No, I mean, I think Chris did a great job explaining it. You know, freelancing blends between work and working with employee – employer and doing it on yourself. And I think there's a thin line there. Because frequently as well too that when you leave an employer I don't tend – I love what I do, I love the people I work with, but I probably won't retire with the company that I'm with now. And they have ability to leverage my talent even after I've gone while I do other things. And I think that helps employers and it allows the employee to take control of their time. And like you were saying Mike, it's a life choice. And you have to be willing and able to do that.
Michael: Yeah, and to add a little bit more on the AI front to that. As I mentioned earlier, AI still needs direction. Sure, it's going to make tasks more automated. But people and the machines – people need to help the machines understand what those fringe cases look like. And that's where those problem solvers and the problem explorers really can flourish. And help almost have augmented intelligence is the way I think about it.
Ken: Great of way looking at it.
Michael: So, yeah, cool. So, it looks like we're running out of time here. I wanted to wrap up real quick by saying thank you to Chris and Ken for being great panelists on this discussion. If there are any questions that we did not get to we will respond to those with direct responses. I appreciate you all attending this and signing in to learn a little bit more about where we believe finance teams are going to go with the future of work. If you have any questions, please don't hesitate to reach out to me. My email is firstname.lastname@example.org. Or you can hit me up via the social media channels listed on this slide. Any parting thoughts or words from you Alan?
Alan: Well, no there were a lot of questions we want to get to so I’m glad that we're going to be able to follow back up individually on those. I guess we are running out of time. So, with those final thoughts, I would like to conclude this webcast on how freelancing will affect the financial teams of tomorrow. As an FYI, as part of our promotion for this series the CGMA finance leadership program will have a drawing later this week to announce the winner of one year of free access to the CGMA FLP learning platform. And my team will be following up with attendees to communicate who won and answer any questions that our team can bring up.
Lastly, for the attendees don't forget to attend the second installment. This is the first of four on this series of the finance department transition, a path to success. Next week we'll hear from our own Ash Noah, the VP of external relations as well as book Brooke Green, the South Central region finance controller from Microsoft. Where they will be discussing how the digitization has actually changed the role of the CFOs office. As a reminder that webcast is scheduled for Monday, October 29th at two o'clock. And if you have any CGMA or AICPA, or association questions, please email us at email@example.com. On behalf of our guests from Paro, from Sage and from MorganFranklin as well as my teammates representing the finance leadership program thank you for attending this webcast. We hope to see you next week and as we continue this important series on the finance department in transition. Thank you and have a great day.