For the past few years, we’ve all been reading and talking about the shortage of skilled staff (or even talent) in internal audit. Even global functions with large budgets are struggling to fill vacancies, putting them at risk of not being able to fulfil their remit. As older and more experienced colleagues retire – in internal audit and elsewhere – the need becomes more urgent, the risk greater.

But, given the growth in further and higher education over the past few decades, especially in the UK, why is there such a lack of skills? Is internal audit not attracting capable graduates? Or are we missing opportunities by focusing mainly on graduates, overlooking people with different educational and career paths?

The genesis of this article was conversations with former colleagues in academia about credentialism, defined as “overemphasis on diplomas or degrees in giving jobs or conferring social status” (American Heritage Dictionary). I sought their opinions after one client asked for an eye-watering amount of info about my academic and professional credentials.

What was clear was that the client – based in a country whose current educational infrastructure and institutions have developed relatively recently compared to Western countries – had a view typical of education systems that are either developing…or in decline.

This led me to wonder about other societies going through significant changes in education and specifically its “relevance” to the world of work. Internal audit trainer and consultant Rob Berry recently raised a crucial point on LinkedIn, asking “Are people losing confidence in higher education? At one point, higher education was seen as the golden ticket to success. But recent research from Gallup and Lumina Foundation paints a stark picture: 32% of U.S. adults report very little or no confidence in colleges – an alarming jump from 23% last year. Digging deeper, 37% say colleges don’t teach the right skills, and many graduates struggle to find employment. 52% of graduates are underemployed one year after graduation.”

Educational inflation – of which credentialism is a major part – seems to be hitting its peak in certain western countries. Potential students and their parents may well be asking what the point is of spending three or four years for a degree that may not open doors professionally. When you add the cost of tuition and the prospect of years of student debt, the question becomes even more urgent.

One approach many students – possibly prompted by their cautious parents – have taken in recent decades is to focus on a “practical” or “relevant” degree. This has led to ever more students deciding that a degree in business studies is a safe bet. By 2019, in fact, it was the most popular degree in UK universities, according to the FT. And, according to higher education analyst Jeff Selingo, “Undergraduate business majors account[ed] for about one out of every five bachelor’s degrees awarded each year” in 2017.

But is it a safe bet? The most elementary reasoning from the above figures will lead us to conclude that, as ever more students choose business degrees in order to secure a job, the market will quickly become saturated.

If people are worried about the “value” of their degree, a professional or vocational credential may seem the obvious choice. If a young person is the first person in their family to attend college or university, they may lack a broader perspective or useful advice. As a result, they may not appreciate the value and indeed relevance of traditional subjects – humanities or a liberal arts education.

There is less prejudice against science, technology, engineering, mathematics (STEM), which can lead to lucrative careers. As Selingo points out, “The Georgetown center has found in its research that of the twenty-five highest-paying majors, all but two (economics and business economics) are in STEM fields.” However, degree courses in these subjects tend to have higher entry requirements than, for example, generic business studies.

What’s more, potential students may receive erroneous information about which professions require which grades, degrees, or other credentials. I’ve even seen a LinkedIn article claiming that all internal auditors should have degrees in accountancy, finance, or business studies.

Leaving aside the fact that this implies other graduates have nothing to offer, it begs the question: Why? Some of the most perceptive and skilled professionals I have worked with, including in internal audit, have no degree at all.

Aspiring CIAs don’t actually need a degree. IIA Global’s website makes it clear that if applicants have completed secondary education and acquired five years’ experience, they may study for the CIA. Similarly, ACCA Global explains on its website that there are several paths to chartered or certified status. You can study to pass exams while working full time. In this way, someone who has joined an internal audit function upon leaving school may gain chartered status within a few years – just as their peers are graduating from university.

Many people may decide that an MBA is the route to credibility in business – but some courses, especially from prestigious institutions, can easily cost six figures. No surprise, then, that as far back as 2020, Harvard Business Review was asking if it was worth it.

Obviously, the answer will be that it depends. Many people who believe it will increase their earnings are ready to pay – or more typically have their employer pay – significant tuition fees. It’s only natural then to be emotionally invested in believing an MBA is not just worthwhile, but essential.

Would they pay for these courses themselves? Some, maybe – but many, absolutely not.

A similar form of postgraduate education inflation takes place in certain continental European countries, where a PhD is sought after in business and politics, as well as in academia. However, this has led to several high-profile politicians being accused of plagiarism. The pressure to have those letters after the name can override ethics – and common sense.

On a less elevated level, my recent experience has been that more internal auditors – especially junior ones – with degrees have chosen business studies, rather than STEM or humanities subjects. Has this made them better in a business environment? I’m not sure.

I would expect someone working in internal audit – or indeed anywhere in a business – to display observational skills, common sense, awareness of the wider business, economic, and political context, and indeed an understanding of current affairs. This is proving harder to find than it should be, and I suspect is not solely my personal experience.

According to Jeff Selingo, who has spent his career specializing in trends in US higher education, 

the results of national standardized tests, such as the Collegiate Learning Assessment Plus, given to freshmen and seniors, found that students who major in business made significantly fewer gains in college in critical thinking, writing and communication, and analytical reasoning than those who studied mathematics, science, and engineering, as well as the traditional liberal arts (philosophy, history, and literature).

We can’t ban business as a field of study, nor should we (although clearly running a business school is good business). After all, there are rigorous programs that equip young people with useful information and training, all of which will be relevant in internal audit. But is it time to question the assumptions that a) business degrees are automatically “relevant” and b) a degree is even necessary?

Unsurprisingly, given the figures quoted above by Robert Berry, there are signs of a backlash. A former academic colleague in the US has told me he has seen a trend of questioning the value of a degree. Meanwhile, in the UK, the national press has recently reported on young people questioning the value of student debt for degrees that won’t help them secure a good job.

If young people are considering work rather than university, what will things look like in 10-15 years’ time? And how long will it take for companies or educational bodies to catch up with reality? We know that there is a shortage of skilled workers in our profession. Will requiring a degree, any degree, at all costs, resolve this problem? Or will it simply increase the pressure on young people to get a degree, any degree – even if it’s no use to them or their employer?

Why would the internal audit profession reduce its chances of recruiting diverse talent further because of narrow, possibly outdated views on what constitutes an “appropriate” educational background or professional credentials?

The point isn’t that those with academic or professional degrees shouldn’t have invested in them – for most people of previous generations, my generation (X) and a bit younger, there were compelling reasons to do so.

But if things change, and if enough young people seek other routes to knowledge, will employers and educational bodies be able to adapt?

And what does this all mean for internal audit?