Why Practical Finance Skills Matter More Than Certifications on Your CV
Introduction
When you enter an MBA Classroom, Finance Workshop or Scroll through your LinkedIn feed today, you will see this same trend repeating across the board. Students and Young Professionals continue to stockpile their credentials (Advanced This), (Certified That); Global Education Programs with Cool Abbreviations; Every Year the Resume gets heavier, and each year the candidate’s confidence level (during an interview) gets thinner.
The Job Market for Finance has not gotten easier or nicer; Rather, Finance positions will require you to make decisions quicker, bring sharper analytical skills, communicate better and read more (of the finance/customer minds). At the same time, the Education System continues to offer up comfort. Take this course, get this badge, post this logo on your Profile, etc. – (your) Progress can be seen, tracked, and measured – therefore it can seem safe.
However, finance WORKS based on Value; Safety will not be rewarded.
Companies' needs are increasingly diverging from Candidates' credential lists. Fancy course names take up space on the Resume, However: Practical Finance Skills are still the deciding factor for Hiring, Trusting and Rapidly Promoting YOU.
This blog post will discuss the reasons for the inability to match Finance Candidates with Company Needs based on Real Finance WORK as it works inside of Companies. If YOU are serious about establishing a REAL Career in Finance, this difference is not an OPTION; It is FUNDAMENTAL.
THE PSYCHOLOGY BEHIND CERTIFICATE OBSESSION
The reason that many students pursue credentials is not because of laziness but rather because credentials minimise uncertainty.
Through taking a course, students will know exactly what is required of them, when they have completed their studies, and will have an established framework and consistency in the types of assessment they are subjected to. The reassurance given in receiving this evidence of their acquired knowledge will often be incredibly motivating at the beginning of a student's career.
Any practical learning will have no such assurance. There is no syllabus for judgement, nor any exam for decision making and no way of ascertaining validation, in any. When students are improving in their practical abilities, they will only know they are if they notice themselves being sharper in their critical thinking and making fewer mistakes.
As human beings, we like to see and feel we are making progress in life. As such, a student will have a greater sense of accomplishment upon receiving their credentials than through practical learning where for many years the student will have been making little to no progress.
This is why students tend to collect credentials rather than build skills. However, a student's normalised comfort in receiving recognition will have little to do with what they can actually contribute to the market and what they are worth.
HOW FINANCE ROLES ACTUALLY CREATE VALUE
Support decisions rather than throw up your hands in front of your boss.
Your role as a finance professional is to make it possible for the business to know what is happening in the present, why it is happening, and what the business needs to do to move forward. It’s about being able to interpret data vs. simply memorizing it.
In Financial Planning and Analysis (FP&A), the added value you bring is your ability to provide an explanation of the drivers behind variances in addition to being able to calculate them. In Corporate Finance, you help the business to make decisions based on evaluating trade-offs between options as opposed to only developing financial models. In an Investment role, you can add value by questioning the assumptions made in build-up results instead of just using formula-based results.
Your answer to all of these responsibilities will arrive in the form of a question that is incomplete and urgent—you won’t have time to ask complete questions.
You will only develop these practical finance skills when you perform inside of this uncertainty. Formal courses give you tools but don’t give you the judgment to create false confidence that comes from simply learning the tool.
WHY FANCY COURSE NAMES IMPRESS PEERS, NOT HIRING MANAGERS
Hiring managers place a high value on certifications, highlighting a candidate’s commitment to development and growth. However, when scanning resumes for a potential hire, hiring managers do not focus on the difficulty of the certification courses; instead, they focus on how well the candidate will do when faced with the realities of working in an actual job.
Long lists of certifications, without any demonstration of practical application, indicate that the individual is reliant on outside support. Long lists of certifications also indicate people who are very successful when given direct, specific directions to follow and who are working in a low-stakes environment.
Hiring managers would rather see a candidate who can demonstrate an ability to think critically when faced with uncertainty than a candidate with an impressive credential but with little real experience. Even limited practical experience holds more value than polished credentials.
A project in which a candidate reviews a company’s financial documents and provides insights into what the company needs to do moving forward is far more valuable than an ‘approved’ certificate course.
THE INTERVIEW REALITY CHECK
The last thing a resume represents is a candidate’s competency in performing a particular job role. It does not matter if a candidate chose to take a college class in financial analysis or not if they were able to explain to the interviewer how their college education helped them in the interview role.
Candidates that have formal education will often have difficulty when items do not go as expected during the interview processes. However, a candidate with only informal financial experience will be able to handle the situations much more effectively.
This is why interviews show the difference in resumes that candidates hold. An exciting name of a course may not hold any weight during an interview. The candidate’s thought process will highlight their level of skills.
FINANCE IS LEARNED THROUGH FRICTION, NOT SLIDES
As many people have come to realize, understanding finance becomes clearer when you experience failure.
When your forecast does not meet expectations. When your assumptions are incorrect. When your numbers contradict what management thinks they should see. When data integrity does not allow you to compromise.
Classroom courses are designed to reduce the pressure associated with working in finance, while hands-on experience increases the pressure associated with working in finance.
Through your hands-on exposure, you learn that finance is not about being correct; rather, finance is about being of some directional usefulness. You cannot receive that lesson from recorded lectures.
THE OPPORTUNITY COST NOBODY TALKS ABOUT
Pursuing certificates takes away from the time that could be spent developing an intuitive understanding.
The trade-off of pursuing certificates is generally not taken into account, and students feel fulfilled because they are busy; however, busy does not equal being productive.
Instead of pursuing certificates, the time could have been better utilized by reading annual reports, rebuilding models, analyzing trends, and writing insights. These activities, while appearing to take longer, actually generate compounding progress much faster.
The result of a certificate obsession is that a result from that indecisiveness is a lack of confidence, delayed growth, and reliance on the opinions of others.
WHAT PRACTICAL FINANCE SKILLS ACTUALLY LOOK LIKE
Practical finance experience is frequently identified by the way a person behaves rather than by anything listed in their resume, because practical finance experience does not arise from a set of standards that must be memorised or rehearsed in order to prepare for an interview. Instead, someone with practical experience will answer unstructured real-world questions by mentally mapping the contributors to the change in their margins, then articulating what these contributors mean using simple terms (e.g., cost inflations, pricing pressures, operating leverage, product mix, etc.).
This same type of practical financial proficiency is evidenced when financial model assumptions don't hold true. Individuals who only have theoretical knowledge will generally panic or try to defend the financial model as it exists. A practical finance practitioner views an assumption that doesn't hold true as new data, takes a fresh look at the assumptions and logical structure of the financial model, updates the inputs properly, evaluates the effect that the new inputs will have on outputs, and then evaluates what the updated numbers will mean for business decisions going forward.
Another demonstrable sign of practical finance proficiency is the communication of uncertainty. A practitioner who has had practical experience will not hide the uncertainty in their answer by presenting numbers with extreme precision. Rather, practitioners with practical experience understand the value of communicating uncertainty with ranges or probabilities. This honesty about one's own uncertainty is a characteristic of real-world business decision-making in which clarity is more valuable than incorrect precision. Such behaviour results from experience and not from theoretical knowledge, and judgement is built through multiple exposures over time.
WHY COMPANIES QUIETLY PRIORITIZE ADAPTABILITY
Changing environments affect how organizations do business. Companies' strategies change as the industries' markets and data evolve over time.
Finance professionals who adapt to those changes rapidly (without panic) are what organizations need. Certification alone does not guarantee adaptability; however, experiential-based knowledge does.
Real-world experience gives candidates a deeper level of resilience and leads to more informed questions; therefore, they comprehend implications much better than non-experienced candidates.
The speed at which managers recognize this is significant.
THE RIGHT ROLE OF COURSES IN A FINANCE CAREER
Courses are a tool, not a foundation. Courses are most beneficial when used to help you practice continually. When you take a course and then stop practicing, it becomes unproductive. All the best professionals have a reference to a course, not a reference to themselves. They learn, they apply what they learn, they reflect on what they learned, and they continue to learn.
WHAT A STRONG FINANCE CV REALLY COMMUNICATES
An effective résumé provides insight into the evolution of the applicant's thought processes, as reflected in his/her improved ability to think critically, demonstrate better judgment, and develop better methods for solving problems through the growth of an applicant’s ability to think creatively over time. A résumé represents how an applicant’s thoughts and actions transformed into a successful career.
A strong résumé illustrates the thought processes that went into developing solutions to problems, what methodologies were used to conclude, and what effect the decision-making process had on the outcomes of the business. It connects how one learned about solutions and executed solutions through hard work, and how this experience resulted in the growth of a successful career. Each employment position, project, or training adds additional layers to the individual’s development story as opposed to simply repeating the story from job to job.
In simple terms, once a résumé successfully delivers this information, the course names and certifications will disappear from being the focus, but instead support the résumé as evidence of an applicant’s capabilities. In the Finance Industry, this evidence will greatly outweigh any names or certifications associated with education, as it demonstrates one’s ability to accept responsibility and deliver results.
CONCLUSION: SKILLS COMPOUND, CERTIFICATES EXPIRE
Individuals who successfully navigate the finance profession have demonstrated clear thinking when faced with high levels of stress. Acquiring certificates and completing courses does not guarantee an individual's capacity to excel in the said occupation. Even though acquiring certifications indicates to others that the individual dedicated themselves to this field, the certification itself does not demonstrate that the individual possesses the skills required to manage the day-to-day responsibilities of being in this profession. Being in finance requires one to possess strong judgment, ability to adapt and interpret incomplete data in less time than one would prefer.
The competencies you need to be successful in finance have been earned through practice. These competencies can be earned through situations where you have made a poor assumption, there has been a discrepancy in numbers and you were put in a position where you have to make a decision regardless of what the outcome would be. You will continue to develop these competencies throughout your career and they will become evident by the way you behave as opposed to what people call you. Over time through these earned competencies you will develop a reputation of someone who can be trusted to deliver results, not simply someone who can complete assigned tasks.
When presented with a challenge, an individual may gravitate toward the comfort zone; however, experiencing discomfort usually enables the individual to learn and grow. Similarly, gaining conceptual understanding through practical application will provide more value than theoretical knowledge alone. Those individuals that consistently put themselves in uncertain situations first will achieve the greatest degree of growth in terms of judgment.