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Coronavirus: Another lost generation

Students are the future of the profession. Philip Fisher considers how, in cutting numbers in the coronavirus recession, the accounting profession will be storing up long term problems.

17th Apr 2020
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Close up of a young female looking pensive outdoors.

At the moment, it seems likely that almost every business in the country is operating on the basis of all hands to the pumps. Very reasonably, professionals’ only concern is to ensure that neither they nor too many of their clients sink without trace. In the short term, that is as it should be.

At this point, it is very hard to see when or how the country and its accountants will be able to return to a semblance of normality in the next few weeks. The aftermath of this crisis will definitely take months to unfold – some of the effects will undoubtedly last for several years.

It is possible to foresee many issues that are likely to impact on our industry as a result. The real problem is prioritising these and trying to soften the blow. Unless you happen to be running one of the largest firms in the country, the issue of student recruits is probably right at the bottom of the agenda at present.

Trimming the fat, cutting the muscle

At best, as part of a cost-cutting strategy, you might be wondering out about how to extricate yourself from a tentative offer to one or more enthusiastic youngsters whose services might well no longer be needed this autumn.

Indeed, you may even be feeling deep sympathy for anyone having the misfortune to graduate this year. Not only will they miss out on the pleasure of completing their degree courses but the job prospects of any bar the highest of highflyers will be negligible now and their long-term career prospects significantly damaged as a result.

To a lesser degree, those who graduated in 2019 and decided to enjoy a gap year, finding the world and themselves, might discover similar hardship, losing out to those who are already in jobs, although many of them may suffer a similar fate.

The graduate conundrum

Even the largest firms are almost certain to be taking similar steps with regard to graduates on the basis that their businesses will contract significantly during a pandemic recession that might be without precedent in living memory.

The closest relatively recent analogy that one can draw is the 2008 global financial crisis. While almost everybody in the profession suffered significant damages in 2008 and its aftermath, some of the consequences are still being felt today. In particular, the biggest complaint that I hear from friends and colleagues at assorted firms of every size is the difficulty of recruiting managerial level staff.

While this might seem like a contemporary problem, its seeds lie in cutbacks immediately after the 2008 financial crisis, meaning that junior staff were not recruited and, a dozen years on, there is a shortage of those managers and prospective partners with 10 to 12 years’ experience.

The future of the industry

Having identified the virtual certainty that accountants large and small will cut back on staffing generally and more particularly student recruitment this year and, one would wager, for the next few as well, the profession will be storing up a problem that will only unwind towards the end of the current decade.

Today, the reaction of most readers might be to stick their heads even further into the sand and pray that their clients, their colleagues and their bankers will prevent impending disaster.

However, anyone a little more farsighted might also worry about not only the short-term but also the long-term consequences of a virus might change the nature of our industry for many years to come.

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