Skills shortage – how accountancy firms can work around this

With accountancy firms a vital part of the business world, it’s essential that the sector has the talent it needs to be able to cope with client demands and regulatory requirements.

But the industry has long faced the challenge of skills shortages, and there is little sign of that improving.

According to the Hays Salary and Recruiting Trends 2019 guide, 89% of firms in the sector say they have experienced some kind of skills shortage in the past year.

The difficulties have been compounded by a lack of qualified candidates entering the market, as a result of firms cutting back on recruitment and training of junior staff during the economic downturn.

“We are witnessing a shortage of middle management candidates – technically strong ACA-practice-trained accountants, specifically across the finance and accountancy sector,” says Martin Parr, a manager at recruiter Sellick Partnership.

“This is as a result of the 2008 recession when firms cut their graduate schemes, meaning that there were less candidates entering the market. These candidates are now qualifying, giving us a shortage.”

Providing ‘micro advisory’ services

James Poyser, CEO of inniAccounts, says the sector itself is polarising into the highly technical end of accounting and ‘micro-advisory’ services, with the skills required for the latter in particular short supply. “Micro-advisory services will be propelled by HMRC’s digital plan,” he says.

“It provides clients with regular nudges and reminders on what to do, when to do it and will come with an element of strategic input. It’s going to be crucial for the growth of our industry as more automation comes in. But, as it stands, we don’t have the skill to support it. There isn’t enough of the highly technical and capable skill, and not nearly enough of those with the emotional intelligence to provide advisory services.”

New skills are also required as accountants move into providing advice to clients which might traditionally have come from banks.

“Accountants need to be better prepared for this broader client service role,” says Ollie Maitland, co-founder and CPO at Capitalise.

“Advisors must have an awareness of the extent of financial products in the UK ecosystem and develop their client handling and people skills in order to satisfy new client expectations. This need is particularly acute among manager-level staff.”

How to address the shortage

Firms in the sector are turning to various ways to address the shortage and ensure they can attract and retain the skills they need. “Most of the organisations we speak to are combating this shortage by raising salaries and offering much better benefits, such as flexible working, increased holiday allowances and higher pensions,” says Parr.

“We have seen businesses offering between £5,000 and £10,000 more than they were for the same roles a few years ago. This is, however, becoming an issue for smaller firms that do not have the budget, who are often priced out of the market when considering the best talent.”

Broadening the recruitment base

The Big Four firms have also broadened the base from which they will recruit, he adds, by removing some information about university and education from CVs.

“Historically, these businesses would generally only employ candidates with a ‘red brick’ university education,” he says. “By removing this information from CVs, candidates are being interviewed and considered on merit alone, giving them a wider pool of talent to choose from.”

Mike Lloyd is managing partner at Haines Watts Swindon. His firm has put more emphasis on recruiting the right people at the beginning of their career and keeping them with the business.

“Giving them a clear career path is key,” he says. “The current generations are not as fixated on security and seldom see things as a job-for-life so if you are going to keep them then their role needs to evolve and they have to see how it can work from day one.”

Finding out what they want as a reward for success is also important, he adds, as this may not be what an employer assumes. “This may not be a money bonus or shares – it could be support for a charitable event or something else,” he adds.

Temporary measures for immediate skills need

Some 40% of accountancy and finance employers have hired temp or contract workers to address immediate skill shortages, according to the Hays research, but 22% are turning to developing the skills of existing staff.

“We have observed a variety of learning initiatives: 14% have increased their training budget, 13% have implemented a mentoring programme and 25% have allowed employees study leave for external training,” says James Brent, director at Hays Accountancy and Finance.

Many firms are also taking steps to develop younger talent, including school leavers, rather than relying on graduates or more experienced hires. One in four (26%) have turned to apprentices, says Brent. 

Developing an apprenticeship programme

“Apprenticeships are key to attracting new generations into the profession and will help address skills shortages,” he says. “These opportunities enable faster mobilisation of skilled staff which in time will help alleviate skills shortages.”

One example here is BDO, which has increased the number of apprenticeship vacancies it offers to those who choose not to go to university.

“This has been beneficial as it allows us to hire promising, digital-ready talent at an earlier stage, developing them from the outset while offering an alternative route to gaining a professional qualification and the chance to ‘earn while you learn’,” says Teresa Payne, head of people.

“Apprentices can begin their career three years ahead of their peers at university in an environment where training is aligned to both business needs and technological advances.”

Developing your team from the inside

inniAccounts, meanwhile, has developed its own academy for new starters, school leavers and existing members of the team to help ensure staff learn some of the skills that are becoming increasingly important.

“It means they are continually learning about accounting and acquiring new skills like listening, problem solving, and developing a strategic vision which will become essential,” says Poyser.

Technology could also help alleviate skills shortages by seeing some elements of the job automated, although this is also likely to increase the need for other skills, believes Brent.

“In particular, automation projects are contributing to the increased need for operations and technical skills in accountancy and finance, rising from 27% last year to 40% this year,” he says.

Future recruitment challenges

Despite the various coping strategies organisations are putting in place, it seems likely that the sector will continue to struggle to attract and retain the talent it needs for a while yet.

According to the Hays research, 68% of accountancy and finance employers expect their greatest recruitment challenge for the next 12 months to be a shortage of suitable applicants. While 42% said the competition to secure talent was their biggest concern and 77% plan to increase salaries over the coming year to hold on to staff.

Where firms do have gaps, it’s vital they move quickly to fill them, particularly in the middle-management roles where the battle for talent is at its most intense, says Parr.

“Businesses that do have the budget and are able to attract the best candidates need to act fast to stand a chance of securing the best candidates,” he says. “A lengthy recruitment process will only deter candidates and allow rival organisations to have the upper hand.”

Nick Martindale is a freelance journalist, editor and copywriter. He regularly contributes to a wide range of national and business media, including The Telegraph, Raconteur supplements in The Times and HR magazine.