During last year's SuperStrategies conference in Las Vegas there was a running joke from speakers at the event that there were really only ten good IT audit leaders in the United States and they just kept changing companies every few weeks.
While the line continued to get laughs as other speakers returned to it, the difficulty in finding skilled IT auditors, as well as internal auditors at all levels, is more likely to elicit tears from chief audit executives rather than laughter. Indeed, internal auditors ranked staffing difficulties among the top "general areas of greatest concern" in our recent "2017 Internal Audit Planning and Staffing Priorities" survey, just behind such stress inducers as cybersecurity attacks and fraud.
The biggest problem isn't just finding qualified candidates, but holding on to the ones a company already has. Survey results show that 55 percent of chief audit executives and director-level respondents, who tend to hire most often, worry most about attracting good candidates to open positions, and two-thirds (66 percent) say retaining high performers is a top staff-related concern.
Even the most experienced internal audit executives groan when it comes to finding and keeping staff members. "I dread hiring," confesses Mark Monroe, vice president of internal audit and risk management for Dentaquest LLC, a $1.7 billion dental insurer based in Boston, Mass. "It always takes a long time to find the right ones."
The competition to retain highly skilled internal auditors has led to increased salaries, especially among candidates with technology skills. A report from recruiting firm Parker + Lynch finds that the average internal audit director will earn an average of $163,000 in 2017 in total cash compensation, up from $145,200 in 2015 when the survey was last conducted. That puts the rate of growth at 6 percent annually, well above the average 2.8 percent wage increases for all professions over that time projected by the ERI Economic Research Institute.
Compensation is certainly a necessary first step to addressing these concerns. In general, respondents find salary, benefits, and bonuses to be the top tools to recruiting new talent, with 70 percent, 62 percent, and 61 percent, respectively, ranking them very or extremely effective. Internal audit executives who stop there, however, leave themselves vulnerable to losing staff when a higher bidder comes along. To truly excel at talent management, chief audit executives will have to get increasingly creative about using non-compensation tools to attract and retain employees.
In some ways, internal audit leaders may be making their jobs harder by not focusing on longer-term strategies to build a department. Survey results indicate that after money, providing training programs ranks as one of the top three most effective ways to attract and retain people. Yet such items are low on the list of audit executives' staffing concerns, with getting team members proper training and establishing a mentoring or development program at the very bottom of the list.
"Increasing compensation will only get you part of the way. At some point, you need to develop a reputation as an organization people want to work for and stay with," says Arons. "Generations across the workforce want to be valued, learn new skills, grow professionally, and achieve work-life balance. The challenge is that each has a different lens through which they measure their progress," he adds.
The Value of Flexibility
Another way internal audit executives can attract strong candidates is to offer some scheduling flexibility. Fifty-seven percent of respondents considered flextime high in effectiveness, making it almost as popular as bonuses. Julie Pearce, a senior auditor at Diamond Resorts International who travels up to 60 percent of the time, is among them. "I would fight harder for flexible time than I would for money," she says. Currently, she often pays to have her young child and a nanny accompany her on business trips.
The challenge is providing those benefits within the constraints of the job, which inherently requires a great deal of travel and face time. "We try to be sensitive to people's needs, and we do whatever testing we can from our desktop; videoconferencing helps, too," says Holland. "But many areas—like understanding how a manufacturing process
can produce less scrap or measuring management's tone—are things you can't do from your desk."
Develop a Retention Strategy
At the same SuperStrategies conference mentioned earlier, Robert King, chief audit executive of FedEx, put developing a workforce strategy among his top challenges facing internal audit. One of the difficulties he identified is finding and keeping individuals with the right mix of skills. He said the critical skills and attributes needed in the internal audit department include analytical abilities, business knowledge, ability to communicate well, integrity, courage, conflict management skills, and many others.
Since it's difficult to find all of these attributes in one person, King says his department takes a workforce strategy approach, ensuring that the needed skills are represented across the staff. To get there, his team conducts a skills assessment and then a gap analysis to pinpoint what skills are lacking and works to plug those holes, either by providing training and development or through recruiting efforts. "Aligning with the HR group was a key part of our workforce strategy," he said.
Johnathan Ngah, a principle at Synergy EnterPrize LLC, a staffing company that specializes in IT auditor recruitment, agrees that developing a retention strategy is a critical part of hanging on to high performers. He says it starts during the hiring process. "Put the extra time into ensuring a good fit with the candidates you are interviewing on the front end and it will pay off by keeping them in there longer."
Ngah suggests some other steps to guard against turnover, including:
- Offer small perks to make for a more conducive work environment
- While exit interviews are great to know why those leaving chose to, "stay" interviews can determine how to ensure the best IT auditors stay
- Promote from within whenever possible (impacts morale & advancements)
- Maintain constant training for IT auditors to acquire new skills
- Provide clear, tangible, and attainable goals for which IT auditors are rewarded
"Internal audit is a very difficult job," said Ngah. "When nothing happens no one even realizes we exist. But when there is an incident, the question is always, 'Where was the internal audit team?' " He said companies need to do more to recognize the accomplishments of high performers.