by Andy Hofmann
On virtually every professional website and blog these days one sees the conversation of the decade: jobs. The authors of many of these articles relate how frustrating it is to be unemployed or underemployed. There are no easy answers, and governments and private-sector experts are wondering how to restore job creation.
Auditors are not exempt from the job malaise; many have been forced to look for new opportunities. As an employer of auditors, I have observed some creative ways they try to stand out from their peers. I thought that this would be a timely topic to cover as we end one year and look forward to another.
My experience is that the most auditors work in two main capacities: supplier quality representatives (SQRs) and third-party management systems auditors. There is also a third category: internal auditors within larger organizations, though these opportunities are less common and usually require first-hand experience with the organization. For the purposes of this discussion, we will focus on SQRs and external auditors.
Potential employees have quickly recognized that the chances of being hired into a full-time position in the auditing profession are not high. These conditions are similar for SQRs and external auditors. During the past three to five years, organizations have gone on a focused cost-reduction exercise. This has manifested itself as indicated in figure 1.
Figure 1: Auditing jobs–New economic realities for auditors
|Supplier quality representatives||External third-party auditors|
|Supply base rationalization. In the automotive industry, where there may have been 50 injection-molding organizations to do business with in a region, there may now be no more than 10.||Audit fees. Organizations maintaining certificates are looking for the most competitive pricing available. This has caused the average day rate in the industry to erode. In some sectors, audit rates have declined 30 percent.|
|Partnerships. Customers and suppliers enter into long-term supply arrangements to further reduce costs. Where an organization may have had several suppliers for each commodity, it may now only have one. Fewer suppliers means fewer supplier audits.||Organization size. The number of audit days that a registrar must perform is a function of the number of full-time equivalent employees at an organization. Most organizations haven’t increased the size of their staffs substantially, with many sectors rationalizing and employing fewer. The result is fewer audit days to go around.|
|Supplier performance bonus. When suppliers achieve certain prescribed performance levels for price, delivery, and quality, they might be allowed to undergo fewer audits.||Specialization. At the outset of the management system business model, there were two general standards that applied to all industries: ISO 9001 and ISO 14001. There are now many sector-specific variations of these standards by industry and by type of management control. Just some of the industries that have their own standards include aerospace (AS9100), automotive (ISO/TS 16949), medical devices (ISO 13485), and telecommunications (TL9000).|
This has meant less work for SQRs and third-party auditors. Additionally, many full-time SQRs and third-party auditors have been replaced by part-time or contract professionals. The vast majority of the positions currently available are under contract. So, if an auditor is looking for auditing jobs, he or she must become a self-employed management system professional. Being a contract professional has its pluses and minuses.
Square in the “minus” camp would be this: As a contract employee, you have no guarantee of any work whatsoever. It’s a significant stress to know that bills cannot be paid unless there are chargeable days in your future. This is why many auditors work for more than one registrar or take auditing jobs as contract SQRs. By being qualified by many registrars increases the likelihood of chargeable days.
One of the positive sides of self-employment auditing jobs is scheduling. You are in charge of when you work and when you do not. Recognizing the effect on personal revenue, you simply block the calendar for the dates that you’re not interested in working. It takes planning and discipline to ensure that you don’t give up the blocked days. No one—with the exception of your banker—will question your decision. I have been married to my banker for 33 years and therefore quite used to accepting counsel on the number of days I book.
Another positive for self-employment can be taxes. Self-employed professionals have tax advantages that an employee doesn’t qualify for. However, to take full advantage of tax breaks, you may need to consult a professional accountant. However, your chargeable days must then increase so that the cost of this assistance can be recovered.
Self-employment takes getting used to. With the appropriate preparation and skills, it can be a very good way to make a living. To fill the days with work, however, requires differentiation from all the other self-employed professionals. As an employer of auditors, we differentiate along two lines: professional designations and technical skills.
Auditing jobs–Professional designations
Professional designations for auditors include those issued by the American Society for Quality (ASQ) and RABQSA International Inc. Most of us know the requirements. Technical skills are required to audit a particular industrial qualification. Most auditors will have some formal education or direct industry experience in one or more of the economic activity codes (EAC) or standard industry codes (SIC). Auditors must also posses experience in auditing one or more management systems standards. This requires training in audit methods, the management system standard, and the application of this training. The candidate auditor either demonstrates his or her audit skills to an observer or performs a prescribed number of audit days attested by a competent person. Once the designation is awarded, the auditor must continue to perform a prescribed minimum number of audit days and provide evidence of continuing education.
The auditor pool in North America is made up of individuals with a wide variety of professional designations. Some hold designations from multiple bodies for multiple standards and multiple EACs. Others hold a single designation issued only by the organization they work for. Registrars, of course, are motivated to contract with the most experienced auditor they can find for a particular engagement, for the lowest possible fees. In other words, it’s a free market where price per day is dependent upon supply and demand.
Every certification body (CB) has a process by which auditors are qualified to audit in specific EACs and standards. This process takes time and costs money. CBs are thus inclined to give the most opportunity to auditors that are most qualified. The more EACs and standards an auditor is certified to audit against, the easier it is for the CB. Perhaps the best way to illustrate this is for auditors of automotive organizations.
In automotive, most of the large international OEMs have mandated that their suppliers be registered to ISO/TS 16949 and ISO 14001. The requirements for an ISO/TS 16949 auditor are more involved than for an individual auditing ISO 9001. ISO/TS 16949 contains the requirements of ISO 9001 along with a significant number of automotive-specific requirements. As such, auditors must apply directly to the governing body for ISO/TS 16949 to be considered as an auditor of the standard. A mandatory course and examination must be challenged to obtain the credentials necessary. Because of this extensive process, the supply of ISO/TS 16949-qualified auditors is limited.
Add to that the need to be able to conduct ISO 14001 audits. Organizations that are required to have both designations are motivated to minimize their audit costs. Thus, they often insist that their ISO/TS 16949 audit take place at the same time as their ISO 14001 audit. Ideally, clients would like the same auditor to assess them for both standards at the same audit event. While the overall audit time to cover both standards isn’t significantly affected by a combined audit, the reduction is disruption is. Thus, registrars and clients alike would like to have one auditor qualified for both standards.
For registrars, this means finding auditors with both qualifications. Because each qualification costs the auditor and the registrar more time and money, there are fewer of these individuals available. The free market result is present: Registrars want the most qualified person for the lowest day rate.
Auditing jobs–Technical qualifications
As indicated earlier, there is another dimension to this through the EAC code. Let’s say that three auditors are each qualified to audit against ISO/TS 16949 and ISO 14001. Each of them has a background in mechanical engineering and has worked in automotive in the metal-stamping business. However, the client is in the chemical conversion business. Unless a technical expert accompanies the auditor, none of them can be used independently for a combined standard audit of the chemical converter.
Auditing jobs–Contracting decisions
When faced with the opportunity to contract with an auditor, CBs look for people that demonstrate a wide variety of both technical skills and professional designations. An auditor that can demonstrate real tangible experience with a wide variety of industry types and standards is much more useful than someone with more limited skills. In the market of contract auditors, this can translate to in a difference in day rate of 30 percent or more.
Because virtually all auditors are self employed, they want the most money possible for each day sold. In the average work year, there are approximately 240 working days. This number is arrived at by taking 365 and subtracting:
- 52 weekends equaling 104 days
- 11 statutory holidays
- Two weeks’ vacation for ten days
Filling in any day rate, you can see that getting paid 30 percent more for a day will have a huge effect on your bottom line. If we use $400 for each day for a single standard auditor, the 240 days is worth $96,000. Receiving 30 percent more for each day is a $28,800 annual difference. An improved skill set isn’t just great for registrars, it’s great for auditors.
To get your curriculum vitae to the top of the contracting organizations list, it needs to demonstrate diversity in professional designations and technical breadth. If your prior auditing jobs don’t include this, getting this diversity should be your first task. Gaining experience without it taking decades working in different industry sectors can be difficult. Some individuals have been able to gain experience through volunteering. They give their time for free to participate in audits. They work with experienced personnel to build their skill sets until they have a credible amount of expertise. Such an approach is very attractive to audit organizations. They can work with more clients without increasing costs.
Another way some have succeeded in obtaining additional technical skills is to take part-time classes. Many colleges offer technical courses in welding, aircraft structures and engines, pharmaceuticals, and so on. In a 12-month period, it would be possible to attend several classes, adding credible knowledge to your curriculum vitae.
The bottom line is that there are good contract opportunities in the marketplace. To be considered takes some effect, but the profession of auditing is worth the investment in the 240-day chargeable future.
About the author
Andy Hofmann has been involved with management systems for more than 30 years. He has audited more than 2,500 systems, giving him a unique opportunity view of organizations that are performing well and those that struggle. A regular contributor to American Society for Quality management systems conferences and publications, Hofmann’s intellectual property has received wide acceptance. Currently the president of ICS Certification Services, Hofmann continues to work with management systems professionals throughout North America. He has an MBA from the University of Toronto and is a Certified Engineering Technologist.