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Analysing the recruitment crisis in accounting

on 27 June 2024

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Posted by Wayne Pope
Anaylsing Recruitment

It’s a problem we’re all trying to get our heads around – how do we fix the skills shortage and recruitment crisis in the accounting profession?

Firms are constantly reporting lower numbers of applicants, year on year.

Our clients frequently bemoan an increasing number of job vacancies, facing challenges in attracting younger professionals and often receiving only a few qualified applicants for each job posting.

Accountancy practices are now offering growing salaries, bonuses and incentives in an attempt to retain staff, cutting into their shrinking margins further.

Many experts blame Brexit and the pandemic – a fair assumption – but with these events behind us (to a degree) one has to wonder if the problem is more systemic.

Brexit and the pandemic – The root of the problem?

It goes without saying that the two major events in the last decade have had an impact on nearly every UK business sector.

Last year, The Guardian reported that there was a shortfall of 330,000 workers due to Brexit.

Although many of these were in the low-skilled category, it’s safe to assume that at least some of them would have gone on to work in accountancy.

Whilst the figures are hard to come by, it’s likely that Brexit also reduced the overall work prospects for accountants too.

As businesses retreated from European markets, and vice versa, they may have had less reason to engage accountants for international work.

Yes, this it’s a niche segment of the profession that engages in international work, but that lack of work may have had some effect on the overall market.

Equally, one might look to the pandemic for a source to the recruitment problem.

Even during the pandemic, publications were reporting a lull in the number of prospective accounting professionals entering the market.

The data we have available to us now also indicates that large numbers of accounting professionals aged over 50 exited the market voluntarily during this period.

Coupled with an inability to get experience in-house for those who’d been to university during the pandemic due to social distancing and other restrictions and it’s easy to see how we’ve rapidly created a perfect storm.

Older accountancy professionals left voluntarily for quality-of-life reasons and early retirement.

Meanwhile, university graduates entered the market, only to find firms unwilling to hire and provide them with experience, creating a two-year waiting list for those now exiting education.

In short, it’s fair to say that these are indeed root causes.

But is this the whole story?

Fundamental differences in working patterns

Probably not – there’s more to the recruitment problem than first meets the eye.

From our research we’ve determined two fundamentally different business models within the accounting space.

  1.    Firms stick to the traditional route, employing more staff to meet demand, reducing numbers when revenue shrinks.
  2.    Firms utilise technology where possible – rather than recruiting – to offset the costs of hiring. 

We believe that, in reality, the recruitment crisis is somewhat subjective and situation dependent.

The firms who are properly utilising technology seem to report less on the recruitment challenge than those who rely on staff members to complete the majority of their work.

(This is a subjective analysis – we have no data to support our theory… yet).

It could be that due to higher demand on accountancy firms, growing client lists and increasingly complex regulations, the firms experiencing recruitment issues are in fact experiencing workload problems.

It’s a reframing of the issue, but we think some firms must fall into this category.

Yes, there is a skills shortage at the moment, but what if this has been indirectly created by increased workload, rather than lack of applicants.

It’s an interesting thought!

What is to be done?

We can’t pretend that we have an answer to the “how to fix the skills shortage” question.

But we do have a suggestion for those firms struggling with the issue:

Try to analyse whether you really are struggling with manpower or if you could fix many of your challenges through technology.

In the latter is the case, question whether you have a technology shortage or a skills shortage.

No points for guessing which is easier to fix…

Try Glasscubes to find out how we can reduce your team’s workload.

 


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About this author: Wayne Pope

Technical Director at Glasscubes. With over 30 years experience in the online software industry, Wayne brings an in depth technical expertise in collaborative tools, technology, and best practices.