What Does Being Pigeonholed Mean in Public Accounting and Consulting?
The phrase being pigeonholed is used to describe someone who has been locked into a particular group or characteristic, usually with the negative connotation of rigidity and inflexibility. In the world of professional finance, this is a hot topic because young professionals can find themselves trapped or stuck at a point in their career where they don't want to be for the long term. While specialization is important for professionals who want to advance their career and earnings potential, being specialized in something you don't want to do long-term can do more harm than good. As globalization and certain labor shortages continue to evolve the landscape for financial professionals, pigeonholing has become quicker and quieter for younger employees, making it all the more important to understand than ever before. This is why today I'm going to talk about pigeonholing so you can understand how it happens and how you can avoid it.
How Does it Happen?
I believe that young financial professionals mainly get pigeonholed due to a few key areas:
Specialty in client industry
Companies want people who are familiar with how their industry works. Some industries are easier to learn than others, and all industries have some level of unique terminology, best practices, and general way of doing things. As you enter roles that require more experience, this specialized knowledge will become more important. The difficulty with this arises when you want to switch jobs and join a new industry. While not impossible, it's certainly an uphill battle to get a job with a financial institution when your resume is all about nonprofit accounting, as an example. Another example of a common specialty industry is working in a federal consulting practice, where you work for a firm that provides services to federal branches such as the US Department of Defense.
Specialty in service line
Not all service lines are created equal in terms of transferability. While it's true that in the first few years of your career you will be gaining tons of transferable skills regardless of where you work (such as general business, analysis, and communication skills), there are some service lines that become very specialized very quickly. The example I like to use for this is IT audit. If you become a specialist doing IT audits, it can be difficult to switch to another service line like audit, or to an industry job doing accounting or something other than IT audit. This is true for other services lines and specialty areas such as Audit, Tax, and SOX Controls, but those tend to have more transferable skills in the early stages, making a younger professional less likely to get pigeonholed early.
Regardless of whether you are an auditor, a tax accountant, or an industry staff accountant, in the first few years of your career, you will learn a lot of transferable skills. I think of these skills as the ones that you can take from job to job and not lose any value from the switch. These are typically general business skills as well as soft skills such as communication. However, after those first few years the skills you learn on the job start to become more specialized. As an audit manager, there were portions of my job responsibilities that only applied to progressing my career in managing audits. Because of that dynamic, I understood that staying in my service line was not an efficient way to progress my career. Most people understand this when they are picking their first job out of college, but it's important to remember the effects a few years down the line.
Specialty in client size
I have a strong network of accounting professionals ranging from one man shops to Big 4 partners (and everything in between) and I can confidently say that a company's size dictates some of the skills needed to be successful while working with that company. Simply put, the people who work with Fortune 500 companies do not have the same skill sets as those that work with small businesses. If you come from a big business environment and want to work with small businesses, you will have a lot of learning to do, and the same is true for the other way around.
How Do I Prevent Myself from Being Pigeonholed?
Remember, being pigeonholed is seen as a bad thing only if you aren't where you want to be. So if you are happy with your career progression and prospects in a specialized area, then you have nothing to worry about! For the rest of you, it comes down to mitigating the downsides I listed above to preserve transferable skills and build a strong resume. Here’s some ideas on how to diversify your experience based on these areas:
If you are worried about being too specialized in a given industry, communicate to your Company’s leadership and schedulers and express your interest to rotate to a different client or industry to get some exposure.
If you are worried about being too specialized in your service line, do your research! Some industries, such as IT audit, become specialized much faster than others, such as auditing. Check out some professionals on LinkedIn and try to spot the common career paths of the people who start out in your chosen service line. You might begin to notice some trends in terms of how long they stayed at their first full-time job, and the type of Company they chose for their second full-time job.
If you are worried about your specialization in client size, do your research AND communicate with your Company’s leadership if you can! Working on a Fortune 500 size client effectively requires you to be working with a top 10 firm. In many cases, you won’t have the option to work with a client that big if you are not at a large enough firm, so if you want the opportunity to work on one, be sure to choose your firm carefully! But remember, working on only Fortune 500 clients is a specialization by itself, so if you want to try something different, ask your company leadership or scheduler to help diversify your experience with different sized clients.
Lastly, it’s important to understand that eventually, you will have enough experience to specialize in a certain area, and that’s not a bad thing. Specialization is an important step in many people’s career paths and it’s nothing to be scared of if you are ready for it. If you are getting to that level of experience, I suggest doing some reflection and cost-benefit analysis to figure out what next steps are best for you. Good luck!