by Peter Holtmann
The global financial crisis caused multinational organizations, small and medium-sized organizations, governments, and nongovernmental organizations alike to question the value of quality practitioners. That said, this article won’t be another puff piece on how the quality profession has had it tough. The global financial crisis really inspired me to take a retrospective look at the auditing profession and make some assumptions on its future.
I frame my commentary through the lens of RABQSA International Inc., the organizations that we assist, and the governments we cooperate with. From my last look back at the statistics early in 2008, I concluded that the global auditing profession was made up of primarily self-employed men aged 55 and older who are heavily engaged in the manufacturing sector and had some or most of their business associated with government contracts.
These data represent three years of customer surveys conducted by RABQSA International. At first pass, it looked worrisome. Of the auditors who were more than 55 years old, a further 30 percent were older than 66. I asked myself, “Where is our profession heading and how do we sustain any form of growth when our audience is retiring and moving to Florida?”
Apart from these demographics, what else was going to affect the auditing community, either as lag from previous years or into the next five years? Note that I refer to the entire International Organization for Standardization (ISO) profession here.
The global financial crisis was clearly a disaster for the quality profession, as both public and private-sector organizations tightened their belts and moved away from nondiscretionary expenditures. Auditors became seen as expendable. Any matter that wasn’t perceived as adding value to the bottom line was reduced, cut, or shelved. Auditing staffers were let go and operations whittled back to core services. Governments took a more deregulated role by cutting their internal capacities to oversee the implementation of profession controls or standards. This has had both a positive and negative effect on the markets with government employees being let go and private contracts being established.
Projected over the top of these trends is the quality movement itself. Quality as a stand-alone item is now a mature product, and its latest machination has done little to advance the cause. When you consider that only 6 percent of the world’s businesses hold some form of quality certification (be it for environmental management, operational health and safety, food safety, etc.), it doesn’t look good for the long-term growth of the quality and auditing industries.
Having said this, there are also positive factors that will contribute to the growth of the quality profession. Emerging markets in India and China are hungry for global business and keen to demonstrate their commitment to quality practices. We are also starting to see second-party supplier-buyer industries gravitating toward third-party conformity assessment to reduce the number of required duplicate audits and as a way of driving consistency and best practices into their sectors.
Consumers are also demanding more accountability from service providers and regulators to deliver safe, quality, carbon-neutral, socially responsible services and products. We expect greater transparency and more access to professionals and for their advice to be reliable.
So where has all this pushing and showing left the auditing profession? We have seen an average 8-percent growth in competency-based personnel certification schemes and a 3-percent growth in qualification-based personnel certification schemes. RABQSA noted a minor dip in these figures in 2008 but that quickly recovered in early 2009 and it hasn’t dropped since. Some of our competitors have experienced similar growth trending, indicating an international trend.
This trending raises some interesting questions about the products being offered consumers and where growth is being experienced. What about the idea of “competent” vs. “qualified” auditors? How has profession adopted these paradigms? Well, the higher growth in competency-based schemes should give some idea where the market is trending. Furthermore, competency-based certification is supported by the International Accreditation Forum, required by ISO 17021 Part 2, and is increasingly addressed in new standards.
What factors are slowing the adoption of competency-based certification? Is there a way around it? Key limiters to its growth are still product placement and understanding its uses. Many markets still rely on auditor qualification and experience to assure themselves of the quality of services they’re paying for, and even more markets have an antiquated supplier-buyer relationship in which price and availability are determinants of quality.
As a quality community, we simply must try harder to promote the benefits of competency and rely on a market that is gaining intelligence on its products. Educated consumers want services with the most value and with the least exposure to risk to their buyers and their boards of directors.
How have auditors responded to the changing profession? Have they globalized, specialized, and upskilled? The short answer is yes, but the longer answer is yes but slowly and begrudgingly. Examinations are still seen by many as an imposition and a mechanism for adding cost. Those who wish to demonstrate better value to their customers are following the third-party certification route. Although the concept of a global auditor is becoming more common, many countries still don’t support the use of foreign auditors in local markets. Thailand and China come to mind. But, as trade expands and the supplier-buyer networks unravel into even larger webs, they push the auditor ever outward.
Finally, the big question: Is there a future in auditing? Yes, unreservedly. The data from this year show that the median age of auditors has shifted downward from 55 to 45 and that more people are choosing to enter the field of auditing, albeit as contractors. Auditors are choosing to specialize in specific industries, such as pharmaceutical, heavy vehicle safety, tourism, energy performance, and greenhouse gas emissions. They are going global with their services and are entering emerging markets such as India and Africa.
Auditing is a professional occupation supported by strong credentialing from graduate courses and demonstrated by competent examination and assessment outcomes. Auditors contribute to the expansion of global standards, which encourages world trade and the lowering of trade barriers. These professionals deserve greater recognition of their efforts through acknowledgment of their efforts to become certified and add value to their customers.
About the author
Peter Holtmann is president and CEO of RABQSA International Inc. and has more than 10 years of experience in the service and manufacturing industries. He received his bachelor’s degree in chemistry from the University of Western Sydney in Australia and has worked in industrial chemicals, surface products, environmental testing, pharmaceutical, and nutritional products. Holtmann has served on various international committees for the National Food Processors Association in the United States and on the Safe Quality Foods auditor certification review board.
Tags: audit profession.