Navigating The Accountancy Talent Shortage: A Strategic Approach For Employers

In today's fast-evolving accountancy landscape, one phrase is echoed across the industry: "accountancy is a candidate-led market." But why is this the case, and more importantly, what can employers do to adapt and thrive in this new reality? This article delves into the factors driving this shift, explores how businesses can create a winning recruitment strategy, and offers practical insights for staying ahead of the curve in a competitive market.

Updated: 5th February 2024

We hear a lot about the fact that accountancy is a candidate-led market. It’s said with such assurance that it isn’t often questioned as to why that is and what companies can do in response. This piece will take a look about recent factors that have made top talent so indispensable at present, and how companies can create a recruitment strategy that sets them apart from the industry.

Why is the market candidate led?

The first reason for this situation across the sector is a shift in the number of active staff and active jobseekers as a result of recent external economic factors. The COVID-19 pandemic brought with it a substantial skills shortage for the accountancy industry across a range of roles, whether through people taking retirement, changing their work/life priorities or moving back overseas in the light of international travel restrictions.

The result was a degree of missed productivity and opportunity within businesses across the accounting space, who struggled to keep up with existing work and new business potential as a result of staffing. All of which meant a shift of power to skilled accountants and specialists, who were suddenly more attractive to firms and therefore in much higher demand in the sector.

Secondly, aligned to these employee exits from the industry is also a falling number of accounting graduates entering the sector – down around 20% since 2010 according to the AICPA. The perception of accounting as a less interesting career and having increasing complexity of regulations to deal with are often common themes, while typical accounting pay is often lower in the US than similar roles such as financial analysts and financial managers.

There is also a greater realisation among many candidates of what they are worth and what they want from their career. As the clamour for strong candidates increased from the pandemic and then the recent cost-of-living rises meaning more passive job seekers were more likely to stay put and maintain job security, skilled candidates had a greater chance of finding the job they wanted in the way they want to work in the modern climate.

Armed with this understanding and a confidence in their market value, candidates have been able to be more selective and demanding over the type of job they choose, as well as the salary, benefits, flexibility, opportunity, culture and specialism. A by-product of this has also meant in some cases that candidates have moved to industry rather than practice roles, as practice brands and reputations lose some of their gravitas as a standalone draw for candidates when compared to the wider employment and work/life-balanced package they are looking for.

How should firms respond?

Research suggests that it’s all too common for accounting firms to fail to react effectively to this market shift, either through a lack of understanding or willingness to change current practices and strategy. This hesitancy could be damaging.

The issue of fewer highly skilled professionals being available across the US brings with it two issues. Firstly, that the hiring and training of new accountants instead is a significant cost both in time and money. But it can also impact firms’ ability to successfully manage client accounts and strategies effectively, as well as potentially increasing errors and delays through overstretched or under-skilled teams.

To tackle this and gain access to the best candidates, it’s essential that a strategy for recruitment is reviewed and updated with the right expertise to support decisions. Having a dedicated recruitment consultant involved can not only support the construction of a new and more tailored strategy for current and future staffing, but also help with how to approach any changes needed to update how the company rewards and incentivises existing and potential employees. Having this plan in place can also help the company be more responsive and react quickly to recruitment opportunities as they arise.

Being able to monitor current market rates for salaries is essential, especially where salaries are already a factor in candidates moving to other careers, as well as providing evidence of what benefits should be offered as standard – and which benefits and flexibilities are popular or deal-breakers for candidates in the current market.

Once that strategy is in place, employers can move on to more specific actions to help combat the candidate-led market.

Getting ahead of the curve

One skill that employers can adopt in reaction is to look at recruiting ahead of their needs. This could take the form of building a team ahead of expected or planned work, in order for them to be initiated and up to speed when the work arrives, or simply hiring candidates that are too good to miss out on. Having a longer-term view about resources, client requirements and skills gaps, can set the company on a stronger path for the future by committing up-front to improving the quality of staff.

Similarly, where interviews are held for a particular role and the final two candidates are both a very strong fit, employers could decide to hire both people – thus avoiding missing out on such a good candidate at a later stage.

The benefits to taking these approaches go much wider as well. Not only does hiring ahead of the curve allow senior staff to relinquish some work that can be undertaken by junior colleagues, therefore freeing up their time to focus on strategic and value-add work instead, but it can also create a culture of drive and enthusiasm, where new business and more valuable work is sought because of the staffing capabilities available now.

In summary

In short, recruitment in the accountancy sector has changed, and firms need to too. Whether in practice or industry, companies need to take a longer and more strategic view of their staffing, and the impact of not addressing this, and work ahead of time to be more strategic and less reactive.

It’s also a good time to review the company’s remuneration, flexibility, benefits and wider culture, in order to avoid falling behind the times and missing out on talented candidates that could be hard to find elsewhere. Expert support for market trends and opportunities can be really valuable here.

Finally, firms should look to back themselves and be confident of their future business opportunities – and with that, look at hiring good people even if they aren’t needed just yet. They could be the difference between success and a missed opportunity around the corner.

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