At a glance
- Lack of accountants is a bottleneck for businesses.
- Outdated perceptions of accountancy hamper its ability to attract people.
- Attracting new talent involves fostering a diverse and inclusive workforce.
- We need fresh strategies to entice and retain talent in accountancy.
Accountancy has been hit by a series of hammer blows over recent years, from economic instability to widespread confusion about tax law changes, and from the scourge of late payment to threats posed by cyber security attacks.
One of the most pressing challenges to the profession, however, is the skills shortage the sector is suffering. The scale of the problem is considerable, with Advancetrack’s global study the Accounting Talent Index revealing that almost half (45%) of firms are ‘severely’ or ‘significantly’ affected by skills shortages.
Labour shortages have worsened
The study adds that 74% of respondents warn that labour shortages have got significantly worse than three years ago. Key factors identified include fewer people attending and graduating from university, the impact of the Covid-19 pandemic, and an ageing workforce.
According to Vipul Sheth, Advancetrack’s Managing Director: “Our Accounting Talent Index shows how the acute lack of accountants has emerged as a critical bottleneck, and its impact has been nothing short of severe, impacting businesses, institutions and economies on a global scale.”
Says Sheth, this makes clear that everyone, from multinational corporations to SMEs right through to the accounting firms servicing them, are struggling under the weight of the challenge.
He says: “Without skilled practitioners and a robust sector to oversee financial transactions, tackle regulatory complexities, and ensure compliance, the stability of modern commerce is genuinely at risk.”
Smaller firms are suffering most
Smaller firms are bearing the brunt of skills shortage, largely because many are unable to compete against the salaries and prestige offered by top and mid-tier accountancy firms.
Paul Lodder, VP Accounting Strategy at Dext, points out that the skills shortage has become increasingly apparent in the post-pandemic years, and: “For smaller accountancy firms, this vast talent gap presents a dual challenge: delivering value to clients while also positioning themselves for growth during a pivotal period, especially in an uncertain economy.”
He adds that while initiatives like MTD for Income Tax offer opportunities to grow a firm’s business, they also increase workloads and highlight the need for a workforce equipped with the skills to embrace digital transformation: “However, as client demands rise and expectations for proactive, data-driven advice grow, it’s evident that technical knowledge alone isn’t enough.
“The industry also requires a stronger focus on soft skills like communication and problem-solving to bridge the gap between financial expertise and the ability to translate data into actionable insights for clients.”
This balance, says Lodder, is crucial in building trust, strengthening relationships, and offering a truly advisory service.
To survive and thrive, the accountancy sector must close the skills gap. It can achieve this in several ways, including:
Other ways include taking on apprentices, attending job fairs, retaining older employees, and optimising employee productivity by offering flexible and/or remote working and adjusting schedules.
Negative stereotypes hamper recruitment
FreeAgent research adds that the talent crisis in accountancy is largely the result of a failure to attract the brightest and the best because of outdated and negative perceptions of the profession. The survey of 337 accountancy professionals found that among the most significant obstacles are negative stereotypes about the profession (57%), high education costs (47%), and the lengthy qualification process (42%).
For Rachel Harris, founder of Accountant_she, too many people are unaware of the diverse, rewarding careers within accountancy, and misapprehensions about the profession can discourage potential students.
She says: “To create a more equitable profession, we must tackle the misconceptions that deter individuals from pursuing a career in accountancy, as well as the systemic barriers that hinder their advancement once they enter the field.”
Harris emphasises: “Ensuring the industry’s health and sustainability requires proactive reforms to make accountancy more accessible and attractive.” However, she adds that addressing the decline in accountancy enrolments is not just about attracting new talent, but also about fostering a diverse and inclusive workforce.
Says Harris: “The time to act is now. We need fresh strategies to attract and retain talent in accountancy, particularly as the industry evolves in response to changing economic conditions and workforce demands. Addressing these issues is crucial for ensuring that the next generation of accountants is prepared to meet the challenges of tomorrow.”
Developing skills and encouraging fresh ideas will be vital to help the industry futureproof and adapt to the shifting landscape. Addressing the accountancy skills shortage will require a collaborative approach from careers advisors to shore up the pipeline of new talent, along with the profession itself pulling together to increase training opportunities for existing professionals.
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