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Looming Talent Gap in the Accounting Industry and Your Action Plan

29th Feb 2024
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The accounting industry in developed economies, notably the United Kingdom, faces a pronounced talent shortage. This article explores the root causes of the recruitment challenge for accountants and how you can navigate talent scarcity without disrupting client services.  

Accounting firm partner thinking about talent shortage.
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The UK’s accounting sector recently recorded a noticeable dip in applicants. A survey by the ACCA revealed that 90% of employers in the finance and accounting sector are encountering significant challenges in hiring and recruitment. Industry experts predict this talent squeeze will likely nudge the salary figures northward, putting further stress on smaller firms trying to keep up with the big players. It’s not just about the numbers; we’re talking about a smaller workforce juggling heavier workloads that potentially impact client services and pressure the hiring budget. 

The challenge of scarcity is further exacerbated by a growing demand for accounting services, driven by heightened uncertainty in the regulatory environment. 

Root causes for the talent shortage

Several direct and indirect factors impact the job markets. Whilst it is challenging to pinpoint the exact root causes, we believe the following are the most plausible reasons for this crunch;

1- Retirement of Baby Boomer Accountants

The talent shortage in the UK’s accounting sector is partly attributed to the retirement of baby boomer accountants. With this generation reaching retirement age, many experienced professionals are exiting the workforce, leaving a void in the industry. 

2- Educational Trends and Preferences

Another contributing factor is the shifting landscape of educational preferences. A noticeable trend shows a preference for STEM disciplines, drawing students away from accounting and finance studies. 

3 - Perceived Threat of Automation

The misconception that automation might replace human roles in accounting fosters uncertainty among potential candidates. This anxiety surrounding automation has become a deterrent for individuals considering a career in accounting.

4 - Changes in Work Environment Expectations

The evolving expectations of the work environment play a role in the talent shortage. According to a recent study by The Behavioural Insights Team, job advertisements offering flexibility attracted 30% more applicants. The younger generation entering the workforce often seeks flexible work arrangements, modern technology, and a more dynamic workplace.

Accounting firms that struggle to adapt to these changing expectations are finding it challenging to attract and retain top talent.

How you can tackle the staff shortage?

The struggle is real and is unlikely to get better anytime soon. In this section, we explore the strategies and solutions you can adopt to attract talent and reduce the impact on your business.

1 - Provide Challenging Work and Automate Boring Task

Create a work environment that allows professionals to engage in cognitive and more meaningful tasks to keep them motivated. By leveraging accounting data entry tools like Receipt Bot, accounting firms can not only increase efficiency but also allow accountants to focus on strategic and high-value activities. 

2- Strengthen Academia-Industry Collaboration

Forge partnerships with educational institutions to align curriculum with industry needs. Offer practical experiences through guest lectures, internships, and projects, preparing students for the accounting profession’s demands. 

3 - Adapt to Changing Work Environments

To meet the expectations of the emerging generation of accountants, firms should adapt to changing work environment preferences. Embrace flexible work arrangements, invest in modern technologies, and foster a positive and inclusive culture prioritising work-life balance.

4 – Address AI Concerns in Accounting Employment

Firms must take proactive steps to dispel the anxiety among young accountants regarding AI replacing their roles. Experienced professionals should emphasise the transformative role of emerging technologies, using those to enhance the employee experience rather than a threat to accountants.

According to a recent study conducted by ACCA, 63% of young professionals express a desire for increased technology-related training from their employers. Therefore, accounting firms should encourage and support young accountants to acquire tech skills to position them as an indispensable resources in the AI-driven landscape.

Conclusion

The accounting sector in the United Kingdom is at a crossroads, demanding a bold and imaginative response to its current challenges. With experienced professionals retiring, educational preferences shifting, and concerns about automation looming, the industry stands at a pivotal moment. 

The path forward involves creating an environment where professionals are excited about their work and its positive impact on businesses and the economy in general.