The rise of offshore employees in accounting firms has been an increasing trend over the past few years.
According to the 2022 ATAWW survey by ConvergenceCoaching®, 81% of accounting firms consulted that already have a remote team hired offshore employees in 2022. This is a significant increase from 38% in 2020. In addition, 79% of participating firms retained a team member who relocated outside the practice's geographic areas. This trend is not only changing the way accounting firms operate but also impacting the entire industry.
However, managing a remote workforce can be difficult. In this article, we'll explore the advantages and challenges of hiring offshore employees and their impact on the accounting industry.
Why Accounting Firms Are Hiring Offshore Employees
Endless Pool of candidates
On the one hand, despite the increasing demand for skilled accounting talent, the job market is experiencing a shortage of qualified candidates. The American Institute of CPAs (AICPA) has predicted a deficit of 90,000 accounting professionals in the United States through 2022. This shortage can be attributed to various factors, including an aging workforce, a lack of interest among younger generations in accounting careers, and competition from other industries for top talent.
Hiring offshore employees provides access to a larger talent pool, particularly for specialized areas of accounting, such as tax law or forensic accounting. Offshore employees also provide increased flexibility and better work-life balance for employees.
Cost Savings
On the other hand, the demand for job opportunities from international workers eager to work for US companies has never been greater. With the advent of cloud computing and ubiquitous data access, workers are seeking better salaries and benefits packages, as well as opportunities for career growth and development. US companies are recognized as leaders in their industries and can offer appealing prospects for workers seeking long-term job security and professional advancement that may not be available locally.
Offshore employees are typically located in areas with a lower cost of living, which often translates into lower salaries than their onshore counterparts. According to the survey, 71% of accounting firms that hire offshore employees reported cost savings as a primary benefit. These savings can be particularly significant for smaller firms that may not have the resources to pay higher salaries.
The cost savings associated with offshore hiring can be particularly important for specialized areas of accounting, such as tax law or forensic accounting, where there is a high demand for qualified professionals. It can also be beneficial during specific periods, such as tax season when firms require additional staff and it may be difficult to find available contractors who are not already committed to other projects.
Around The Clock Service
With international employees coming from anywhere in the world, firms provide around-the-clock services to their clients, which can be particularly important for international clients. This brings an opportunity for expansion and business growth.
Best Practices for Managing Offshore Employees
While there are many benefits to hiring offshore employees, there are also challenges.
Managing a remote workforce can be difficult, particularly when dealing with different time zones and cultural differences. While we have gone through each one of these challenges in a preview entry about How to ManageRemote Accounting Teams, here is a quick look at our best tips:
- Set reasonable expectations: By establishing expectations from the outset, even before employees join the company, firms can filter candidates to find the right fit and avoid issues down the line. Clear expectations also help remote employees understand exactly what is expected of them, leading to better job performance and productivity.
- Use proper communications tools: To effectively manage offshore employees, accounting firms must have strong communication and collaboration strategies in place. This includes investing in the best possible service for video meetings, instant messaging, and other tools to keep employees connected.
- Provide remote training tools: Remote accounting employees may lack knowledge about a firm's policies or culture, making a thorough onboarding process and ongoing training essential. Creating systematized training materials that are scalable can make the process easier and faster, while also ensuring all employees have the necessary information to succeed.
- Respect their Time Zone: Access to working data and tools from anywhere, at any time doesn’t mean employees have to be available 24/7. Setting clear boundaries and procedures helps avoid burnout and discomfort for a more healthy working relationship.
- Regular follow-up: Reviews are essential for accounting firms, especially when hiring remote employees. But be careful, many leaders are tempted to adopt micromanaging ways. Most of the management tools you can choose from, offer a variety of assets to help you keep track of KPIs, deadlines, deliverables, and procedures.
Finally, integrating offshore employees into company culture can also be a challenge. Accounting firms must make an effort to ensure that offshore employees feel like part of the team. This can include providing opportunities for offshore employees to interact with onshore employees, such as team-building events and training sessions.
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Kevin Mitchell, CPA
Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.
References:
ShareFile. (n.d.). ShareFile. https://convergencecoaching.sharefile.com/share/view/s2fda67c8db464435b552ba3c48ed97b3
