The accounting industry is facing a serious talent crisis. According to a recent report published by the Professional & Business Services Council and the Financial Services Skills Commission, an average of 32 percent of UK firms are afflicted by shortages in financial, professional and business services skills. The report also estimates that the sector’s annual output could be 12 percent higher if skills gaps were plugged – equivalent to £38bn annually.
This is not a problem unique to the UK. In the US, the AICPA estimates that 75% of today’s public accounting CPAs will retire in the next 15 years. Meanwhile, not enough graduates are entering the profession, and many of those who do leave after a few years for more attractive opportunities in other industries. The result is a growing shortage of accountants and CPAs that is crippling the growth of many accounting firms.
Why there is a national shortage of accountants
Accounting firms are experiencing a significant staffing shortage across roles, partially due to a pandemic-related exodus where over 300,000 accountants and auditors quit their jobs in the last two years. This staffing issue is making it challenging for firms to meet client demands, with smaller firms even having to turn away business.
The shortage isn't expected to resolve quickly as many students are opting for fields like investment banking, data analysis, and consulting instead, due to higher pay and no requirement for an additional year of education needed for a CPA license. Experts suggest that to compete for talent, the industry needs to address its reputation, boost salaries, and highlight the critical role of accountants in the economy.
Persistent Skills Gap in Accounting
The accounting industry is facing significant staffing challenges, notably due to a persistent skills gap. The demands of accounting jobs have evolved with the widespread adoption of financial technologies. These new roles require employees to have digital skills, such as data analytics and business modeling. However, academic curricula have struggled to catch up with the rapidly changing industry, thereby creating a sizable skills gap.
High Staff Turnover Rates
Another critical issue for the accounting sector is high staff turnover rates. Historically, turnover rates have been synonymous with accounting firms, with some firms reporting rates of up to 30%. The easing of COVID-19 restrictions has introduced a new challenge, the "Great Resignation," with many employees considering changing jobs or even switching industries.
In Search of a Solution
Remote work and employee preferences
The nature of work post-pandemic has shifted, with many employees now favoring remote work for its flexibility. Accounting firms are being forced to reconsider their traditional brick-and-mortar offices in favor of full remote or hybrid work models. Surveys show a strong preference among employees for flexibility in where and when they work, particularly among the Gen Z workforce.
Upskilling
One of the ways accounting firms can address these staffing challenges is by investing in upskilling their employees, particularly in areas of digital competency. Organizations that have done so report significant improvements in talent retention and recruitment. Younger generations are especially eager to acquire new skills and are often early adopters of new technologies. Consequently, upskilling programs can help companies overcome the skills gap that is currently affecting the industry.
Embracing technology in accounting
Finally, it is crucial for accounting firms to embrace and invest in technology. With the rise of AI and automation, investment in technology is becoming the norm in the industry. The use of these advanced tools can streamline processes and make firms more attractive to both new and existing talent. Companies such as MindBridge are aiding this transition by integrating AI and data analytics into classrooms to better prepare future graduates for the evolving industry. Accounting firms need to start investing in these long-term solutions for success, given that AI and automation are undoubtedly here to stay.
Offshore staffing
Offshore staffing is a form of outsourcing that involves hiring employees from another country to perform certain tasks or functions for your business. Unlike traditional outsourcing, where you contract with a third-party vendor to deliver a specific service or product, offshore staffing gives you more control and flexibility over your remote workforce.
You can choose who you want to hire, how you want to train them, what tools and systems you want them to use, and how you want to manage them. Offshore staffing can be used for various purposes, such as:
- Expanding your service offerings or capabilities
- Reducing your operational costs or increasing your profit margins
- Improving your efficiency or productivity
- Enhancing your quality or accuracy
- Scaling your business up or down according to demand
- Filling skill gaps or talent shortages
Vintti’s Outsourced Accounting Solutions
In your search for a reputable and cost-efficient provider of offshore accounting services, Vintti presents an excellent option. Specializing in sourcing high-quality financial and accounting professionals from South America, Vintti operates in your time zone to ensure seamless communication and productivity.
With Vintti, you gain access to skilled accountants who possess in-depth knowledge of US GAAP, alongside cultural compatibility and outstanding communication abilities. Plus, Vintti takes care of all the procedural aspects of employing and managing an offshore team, offering you significant time and stress savings.
Partnering with Vintti allows you to reap the advantages of outsourcing your accounting tasks without sacrificing security and quality. To discover more about Vintti's offerings and how they can support your accounting requirements, schedule a consultation with us today.
References:
The Growing Shortage of Accountants and CPAs
Accounting firms losing out on talent in “candidate-led market”, experts say
Staffing Shortage Cripples Growth at 40% of Firms
Accountant Shortage, Resignations Fuel Financial Reporting Risks
The state of accounting staffing: How firms can fight shortages
