Skills Shortage Across the Accounting and Finance World

It's been well documented that there is a global skills shortage across all industries. And it seems that this is especially apparent across the accounting and finance sector. Data from one of the world’s job board networks, Broadbean Technology, shows that application numbers in the accountancy sector have reached worryingly low levels. There was a 33% decline in candidates between May 2022 and June 2022, and a 36% drop in the number of applicants year on year between June 2021 and June 2022.

This drop could potentially be causing damage to the accountancy industry, as accounting firms are being forced to turn away work due to lack of staff. The ManpowerGroup's 2022 Global Talent Shortage Survey revealed that globally roles in accounting and finance rank in the top seven positions that are the most difficult to fill and moving forward, are expected to be the second-most in-demand role in over 40 countries.

There are a couple of key reasons for the skill shortage. Technology has changed the way that accountants and finance professionals operate. Digitalisation means that businesses need to employ professionals who have skills in data science and data analytics. Skills which accounting professionals may not have had the time, or access to resources, to develop.

In addition to this, candidates nowadays are more savvy about what they want from a role. The Manpower survey shows that candidates are more likely to both accept a job and stick around if it also offers flexibility, purpose, and personalisation, along with career insights, education, experience, and exposure.

One of the dangers for the industry with this skills shortage, is the potential impact on business growth. PWc report that, "Around a quarter of CEOs said they had already had to cancel or delay a key strategic initiative over the previous 12 months because the right people weren't available to execute it".

And it seems that the talent shortage is more apparent amongst SMEs. Dr Paul Sin, member of CPA Australia's GBA Committee says: "Small and medium-sized enterprises (SME) are suffering from lack of resources and high shortage of talents, leading to increased need for outsourcing partners….small and medium-sized enterprises need help to digitalise. The government should increase resources to help them find digital partners to provide support, such as IT consultation services or outsourcing digital solutions."

Similarly to Australia, this is the situation in the UK as well, and is echoed by Simon Gray, Head of Business, ICAEW: "Despite a consistent workload, practice firms have reported struggling to fulfil client demand due to a shortage of staff, an issue that appears more pronounced at the smaller end of the market. Indeed, there has been considerable movement in the sector with larger firms better placed to offer higher salaries."

One of the solutions is for companies to consider mergers or acquisitions so that they can then increase their pool of talent and enhance existing skills. Azets' head of M and A Jeremy Fearnley notes the link between talent shortages and consolidation. However, investment in new technological capabilities can help both firms and their clients compensate for skills gaps, he says. "A major thing from both a client and accounting practice perspective is the shortage of talent and capacity, which is really driving people to look at more efficient ways of doing things and automating more. So there's obviously a lot of work we're doing with clients to help them through that process. And I think in future we will become more of a technology plus accounting business, because I think you have to now."

Overall businesses need to understand what employees want and try and meet those needs. Offering employees a sense of purpose and being clear about the mission of the business is key to attracting talent, as is offering flexible working arrangements and thinking through the culture of the organisation and how attractive it appears to an external application. Professional development is also key in the accounting and finance profession, so making sure this is available to staff to help them keep up to date with the industry and develop their skills in the direction they would like, will help with talent retention.