How smaller firms are competing with top-tiers in the war for talent

Those firms that can’t compete on salary are using other methods instead.

The current talent shortage in the accountancy sector is hitting many practices hard, particularly smaller businesses that often struggle to compete with mid and top-tier accountancy firms.

There have been repeated warnings from industry experts and independent bodies that the UK is facing a growing crisis. At one end of the scale, there’s been a decline in individuals training to become accountants, while at the other, growing numbers of senior accountants are reaching retirement age.

Last year, accounting solutions provider Bright said there were just two applicants for every accounting role. And back in May, a new global study by accountancy outsourcing specialists AdvanceTrack found that 45 per cent of accountancy firms were struggling with skills shortages. In addition, three-quarters said the situation had got worse since the pandemic.

Although some firms can respond to the shortage by offering higher wages and a variety of attractive employee benefit packages, or look to recruit overseas, not every firm is in a position to do so.

Some firms are looking at other ways to address the skills gap by:

• Investing more in AI and automation.
• Relying on outsourcing providers.
• Offering ‘returnships’ opportunities.
• Upskilling existing staff.

We spoke to owners of small accountancy firms for their insight as well as an accountancy student to find out what they’d like to see from potential employers.

We offer more flexibility and ownership than larger firms can

Sarah Hedley MAAT, Owner, Brickbooks and Payroll

As a micro practice, I offer flexibility that larger firms simply can’t match. For example, hybrid-working arrangements that allow employees to balance their personal and professional lives. Alongside this, I provide competitive pay and ongoing training, which ensures my team stays current with industry trends.

What sets us apart is that employees get to see more of the entire process with clients, gaining comprehensive experience rather than being confined to a single area. This hands-on involvement helps them build stronger client relationships and gain a deeper understanding of client needs.

I can offer flexible working arrangements that larger firms often struggle to provide. My employees work closely with clients, getting a more personal and in-depth experience. Additionally, as a smaller practice, I actively listen to my team’s ideas and encourage them to contribute to the growth and development of the business. This sense of ownership and influence is something employees in larger firms often miss out on, where decision-making can be slower and more hierarchical.

So far, I haven’t had to actively seek out experienced individuals because I initially knew the right person for a part-time role. However, as I plan to expand and bring in someone more senior, my primary focus will be on ensuring that the salary offering is competitive. I understand that attracting senior talent will require balancing salary with other perks, such as flexibility, training and the chance to work in a role where they have more ownership of the client relationship and the accounting process.

Verdict: Smaller firms can offer accountants more responsibility, flexibility and a greater sense of ownership than what’s offered by larger firms.

Word-of-mouth is a powerful tool

Jess Middleton, Co-Founder, MPAS UK

This might be an unpopular opinion, but there’s no competition, really. Larger firms have more resources at their disposal and naturally have more reach.

However, smaller firms can offer more flexibility, more personal interest and usually specific client bases. So the reality is: it’s in the hands of the person looking for a job. If someone is looking for a high pay rate, full-time hours and larger clients, then a larger firm is likely what they would need. But if someone needs flexibility, the ability to work from home and prefers dealing with the smaller business, then a small business practice is ideal. We understand that people’s requirements and circumstances change over time.

Smaller firms are more likely to offer the personal touch. I’m not saying large firms don’t too, but it will always be a different vibe. As the owner of a small business, I conduct the interviews for new employees instead of a HR department.

In our case, we offer candidates opportunities to work from home and a generous holiday allowance which isn’t limited to 6 weeks. Does this put us out of pocket?  Never. Instead, loyalty increases and people actually take less holiday than before, despite us encouraging everyone to take time out!

Our employees also enjoy coming into our small, dog-friendly office at least once a week. Potential employees love this flexibility to the point where we have minimum of 3 people monthly on a waiting list for an interview. Again, it’s all dependent on the individual’s requirements!

We don’t advertise, but we have great connections and word of mouth is a powerful tool. People talk about the benefits we offer as an employer and prospective employees find this attractive.

Verdict: Word-of-mouth about the benefits we offer is a powerful tool – we have 3 candidates monthly on an interview waitlist.

Promote what you can offer candidates and celebrate existing employees

Rumyana Miteva, AAT student and Accounting Trainee Assistant, E Johnson & Associates

For AAT students like me who are looking for their next challenge, employers need to be willing to support them as they study towards their accountancy qualification. I’ve previously reached out to over 30 accountancy firms to offer my services – I was even willing to volunteer to gain experience – but there was a lack of interest at first.

Firms who support employees and provide entry-level jobs will be rewarded with loyalty and dedication.

This is what I believe firms need to do to attract more talent and address skills gap:

• Be willing to hire candidates without experience but who are willing to learn and grow. They should also be willing to pay for their study as it will ultimately benefit the company.
• Provide opportunities to shadow experienced staff from different departments and with a wide range of experience and knowledge as well as provide mentoring opportunities.
• Offer a bonus or celebrate particular qualification milestones to acknowledge the work and dedication that has gone into the study.
• Promote these benefits on social media too. Doing so shows your firm fosters a positive work environment, and it might encourage other people to study and train as accountants too.

With these steps, I think small practices would be successful in finding suitable applicants with the right approach, knowledge, ethics and loyalty.

Verdict: Smaller firms should do more to actively promote what they can offer candidates – including celebrating the achievements of their existing employees.

Would you like to contribute to future articles like this one? If so, please get in touch with Annie Makoff-Clark at [email protected].

Annie Makoff is a freelance journalist and editor.