Magazine article Strategic Finance

CMA Enhances Your Human Capital

Magazine article Strategic Finance

CMA Enhances Your Human Capital

Article excerpt

Human capital is the result of investing in yourself. The more human capital you have, the greater your expected future income and the lower your financial risk.

You've already taken a major step toward increasing your human capital by being an active member of IMA[R]. As a management accounting professional, you have a number of other opportunities to increase your human cap-ital, including continuing professional education and certification. We suggest that obtaining the CMA[R] (Certified Management Accountant) professional certification is your most effective "next step" on this path. Earning the CMA credential demonstrates that you are a professional and can increase your salary, increase your job security, increase your job opportunities, and help you stay current with the ever-changing management accounting skills.

Measuring Human Capital

Human capital can be measured based on expected future earnings and how this expectation affects your overall financial risk level throughout your lifetime. A college graduate can have millions of dollars in human capital or very little, depending on the specific degree he or she earns. For example, obtaining a medical degree could be worth millions of dollars in future income, depending on your specialty, while an art degree would probably be worth less than a million dollars unless, of course, you're the next Picasso or you use the creative skills you learned in school in another occupation.

Though there are many ways to enhance your human capital, an early major step is deciding to go to college and then choosing your major field of study. There are many career-enhancing majors, but we believe that if you majored in accounting, you chose wisely. (Yes, we're a little biased here.) According to various studies and reports, a university accounting degree increases a person's human capital and career opportunities more than many other degrees. In addition, most accounting graduates will be able to find jobs even in slow economic times.

Certification Is Key

After obtaining an accounting degree, there are many other ways to enhance your human capital. Anything you do to improve your skills related to your organization's needs will increase your human capital. Examples include obtaining advanced degrees, certifications, certificates, specialized job experiences, and continuing education. For management accountants, the CMA is the ideal next step to take. Studying for the exam increases your management accounting skills while preparing you to take the exam. After you obtain the CMA, the required continuing education helps you keep your management accounting skills up to date. This is one of the reasons so many companies support IMA, including Johnson & Johnson, Caterpillar, Xerox, Microsoft, Cummins, Procter & Gamble, Saudi Aramco, and ConAgra, among others.

In addition, CMAs earn more money than accountants without a professional certification. The most recent IMA Annual Salary Survey shows that the average total compensation for those holding the CMA certification is $131,093, which is 21% higher than noncertified management accountants. Finally, holding the CMA professional designation will result in greater opportunities for promotions and less chance of layoffs when the economy stalls or businesses merge.

Another way you as a management accountant can enhance your human capital is to become an expert at specific tasks related to your current job that can be marketed to new employers. Numerous research studies have shown that the skills most in demand today on finance teams are planning, analysis, control, risk management, and decision support--exactly the skills tested on the CMA exam. In addition, continuing professional education, including the soft skills of communication and leadership, will enhance your human capital.

Given the many benefits we've described, we believe it is clearly cost effective to put in the necessary study time to pass the CMA exam. …

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