2017 was such a dizzying year that finance leaders may have had a hard time keeping up. Leaders absorbing the financial news in 2017 were caught between advancing technology on the one hand and geopolitics on the other. To help you sort it all out, here are the six biggest financial news stories of the year that affected workforce management.
1. The Looming Tax Plan
Congress spent much of the fall debating various forms of tax reform, but has not yet been able to finalize a plan. As the end of the year approaches, finance leaders are likely on the edge of their seats to see what will come of the plan.
2. The Equifax Breach
Security once again became a top of mind issue after credit reporting agency Equifax announced a breach in early September 2017 that affected 143 million Americans, according to the Federal Trade Commission. After it emerged that Equifax's CFO, John Gamble, sold business stock in May — after the breach was known internally — the U.S. Department of Justice launched a probe, reports Engadget. For finance departments it was another lesson of the broad risks associated with data breaches.
3. The Great Accountant Shortage
Amid changes to the generally accepted accounting principles (GAAP) that govern U.S. financial reporting, many top organizations found that they had a hard time finding so-called technical accountants who understand the rules and can enforce compliance, according to The Wall Street Journal (WSJ). The unemployment rate for experienced accountants and auditors was 2.5 percent in 2016, versus 4.4 percent for experienced workers, reports the WSJ.
4. The Rise of Robot Accountants
Naturally, an accountant shortage has led to the use of robot accountants. McKinsey & Company found that 86 percent of the work done by bookkeepers, accountants and auditing clerks could be done by machines. E&Y has built 200 bots that save hundreds of thousands of process time annually, according to the Minneapolis Star Tribune. Proponents say the bots free up finance leaders from grunt work, but it's still unclear just how much work can be automated and whether that will ultimately lead to headcount reductions.
5. Corporate Pension Fees Quadruple
Businesses with benefit pensions that cover 250-plus people paid an average $1.27 million in annual fees to the nation's pension insurer in 2016, reports the WSJ. That amount is almost four times the $340,000 the plans paid in 2009. Congress boosted the fixed rate from $35 per person in 2012 to $64 last year, notes the WSJ. The variable rate premium jumped to 3 percent from 0.9 percent.
6. Blockchain and Currency
Blockchain, the online ledger that supports Bitcoin and other cryptocurrencies, also has implications for finance departments. Since it records transactions in a way that's impossible to tamper with, blockchain could conceivably do away with double-entry bookkeeping and financial intermediaries, as noted by Deloitte. But much of the discussion of blockchain was still preliminary in 2017. We will likely see more adoption in 2018.
The year 2017 was an eventful year in which automation continued to infiltrate the work of finance leaders and the regulatory environment shifted under a new administration that represented a stark change from the former one. Finance leaders should expect and prepare for more of the same heading into 2018.
Stay up-to-date on the latest human capital management insights for finance leaders: subscribe to our monthly e-newsletter.
SIGN UP FOR THE BOOST NEWSLETTER