Digitalisation and advisory-based services have not just changed accountancy but they’ve remoulded what firms expect from a new recruit. Beyond settling for someone ill-equipped, how are firms finding the right candidate?
“The problem I see with most accountancy-led advice is that typically it’s all looking back in the rear-view mirror,” said Carl Reader, reflecting on his decision to deviate from accountancy’s recruitment norm.
Reader isn’t one for tradition. For starters, he is more likely to wear jeans and a t-shirt than the shirt and tie you’d expect from an accountant. His push against accounting’s status quo runs deeper than a sleeve tattoo or kicking aside the traditional partnership model for something more corporate.
His firm D&T’s transition towards advisory services saw it bring non-accountants into their adviser roster. With experience from major corporations or from building their own business, Reader described these recruits as being able to “understand a P&L balance sheet if they were to look at it, but they’re not obsessed by it”.
“They understand that you need profit to ultimately have cash, but they don’t need to understand the nuances of the latest FRS or deferred tax discloses. That’s a complete irrelevance to when it comes to advising a business,” reasoned Reader on a recent No Accounting for Taste podcast.
(Above: Carl Reader discussed the state of the profession and advisory in this No Accounting for Taste podcast.)
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“It allows them to focus on a balanced approach of where the business is going, rather than where the business has been.
Reader’s non-traditional approach to recruitment may seem controversial but these times are anything but traditional.
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‘You can’t teach old dogs new tricks’
Many other firms are seeking non-traditional recruitment solutions as a way of adapting to the modern-day client requirements. So, how did we get to this point?
To understand the lack of suitable candidates you will have to go back a decade. So the theories go, the 2008/09 economic collapse eroded the bigger firms’ training programmes.
Whether true or not, it does hold ground when explaining the gap in the market of experienced part-qualified staff. It’s a self-fulfilling prophecy that the profession now pays the price: if you stop training for a period, there will be a gap later down the line.
But Reader’s approach is not unique. It is actually a solution to a much bigger problem compounding this recruitment crunch: the death of the traditional number cruncher.
As such, Olly Evans and his firm Evans & Partners have spent a considerable amount of time looking for a Xero technologist. What has made this particular process difficult is because, in Evans' own words, “the role doesn’t exist yet”.
Technology has displaced traditional skills. That’s why somebody already in the marketplace won’t cut it. “There is a skills mismatch with those types of people, so we’re going to look for IT graduates,” said Evans in a recent Accounting Excellence podcast
(Above: Recruitment in a digital world was a hot topic in this Accounting Excellence podcast with practice owners Olly Evans, Alex Falcon Huerta and Mike Hutchinson.)
Someone from this background comes prepped with an education in business processes and project management skills, all of which chime with what’s needed for the advertised role. “If we need to move a lot of clients onto different tools we need project management skills to do that,” he explained.
It’s a similar recruitment conundrum that other tech-focussed accounting firms are trying to answer. Suffering similar challenges as Evans, Alex Falcon Huerta from cloud-based firm Soaring Falcon Accountancy has trialled and tested the traditional recruitment routes but they proved unfruitful - the qualified recruit couldn't grasp the new digital way of doing things.
(Above: Cloud practice owner Alex Falcon Huerta, here receiving an award at last year's XeroCon, has spoken about the struggles of finding suitable staff in this digital world.)
But this is not sounding the death knell for the qualified accountant. It just means that firms are exploring different ways to satisfy a recruitment problem in the looming MTD-world.
While outsourcing has emerged as an attractive proposition for small practices to offload non-client-facing commoditised work, another solution to the ‘you can’t teach an old dog new tricks’ candidate harkens back to what started this recruitment crisis in the first place: firms are starting to “grow their own”.
Grow your own talent
When he was 16, Sherborne-based practitioner Nick Hunt entered the profession as an apprentice. His experience stood him in such good stead that for the past 20 years apprentices have been the “backbone” of his firm.
A glance around his office is a testament to his “grow your own talent” mantra: one of the firm’s seniors who is now a fully qualified ACCA member started her career at the firm as an AAT apprentice.
For some, this might be a slow process, but Hunt subscribes now more than ever to finding his own talent. The profession is changing at a fast pace, with the evolution of cloud remoulding what is expected from an accountant. That’s why he prefers taking on someone raw with no preconceived idea of what accountancy is, rather than a veteran stuck in the traditional way of looking at things.
“For people who have been in accountancy for ten years, you've got to change their mindset, their way of thinking, their way of working, to adapt to that change. Whereas apprentices who've only been with you for two or three years, you're growing them from the right way from the outset,” Hunt told AccountingWEB.
Apprenticeships are certainly a way for small practices to capture different types of people from different backgrounds with different skillsets.
The last time former practice owner Della Hudson recruited an apprentice she actually advertised for a customer services assistant rather than a trainee accountant because as she said, “there is so much more beyond numbers these days”.
Talking with local schools and linking up with Kaplan’s recruitment process also helped to bridge the technology talent gap. She brought in graduates instead and put them on the ACCA level seven apprenticeship scheme. Technology for these candidates isn’t a problem as “it’s not a fear factor for them”.
However, Reader pulled at the roots of a bigger entry level issue. “We need to look at the personality types who come into accountancy. If we had to profile most accountants, the majority are high stability and high compliance which doesn’t lend itself to entrepreneurism,” said Reader.
Breaking the stigma accountancy has as a “not for me” career is high on the agenda for the ACCA at the moment. The ACCA’s purpose and the profession report investigated ways to break down “some of those artificial barriers” and the “middle-aged, white and male” perception, explained ACCA’s Craig Vickery at Accountex.
(Above: ACCA's Craig Vickery spoke at Accountex about the professional body's mission to break the artificial barriers into the profession.)
With a drive at this entry-level to recruit a different kind of candidate, the people likely drawn to the profession will be different to those it historically attracted. In order to accommodate that, there needs to be a shift in perception and the entry-level training that reflects modern-day requirements.
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Education, education, education
In an attempt to fully understand how recruitment in the profession needs to change, it’s worth examining how accountancy is presented at schools and the expectations of those entering the profession.
As part of the nationwide initiative to bring more employers – not just accountants - into schools, the 2016 Practice Excellence new firm of the year winner Kyle Fieldhouse has conducted mock interviews with year 13 pupils and participated in various speed networking-style interviews and advice. What's clear is the perception of an accountant doesn't marry up to what life as an accountant is actually like.
“A lot of students would say, 'I am good at maths so I'll do accounting' and I'd say ‘what are your ICT skills like’ because actually, they're equally as important,” Fieldhouse told AccountingWEB.
Part of the problem, Fieldhouse explained, is that a lot of schools don’t teach accountancy outside a short business studies burst.
“There is a huge lack of understanding about what it is accountants do,” she continued. “They know the Big Four and so many think that they have to go to London for that or they'll need to be super smart.”
And the students who do pursue accountancy are already steeped in the traditional accountant culture because of a parental influence, echoing ACCA's findings.
Practice owner John Harrison is also breaking this perception. Like Fieldhouse, he's struck a close relationship with his local schools, where he's presented business and accounting sessions and offered apprenticeship places to school leavers.
Wanting to give a good introduction to a new starter, Harrison decided that one of the first things 16-year-old apprentice Faye Walton should do was become Xero qualified – making her the youngest Xero accredited cloud accounting adviser in the country.
We are delighted to tell you that our team member Faye Walton, who joined us from @WalesHigh has become the youngest accredited @Xero cloud accounting advisor in the UK - ever at the age of 16 pic.twitter.com/a7lfN89aIy
— John Harrison (@johnharrisonco) December 12, 2017
“Even though she is at such an early part of her career and she's such a young age, she has a string to her bow,” Harrison told AccountingWEB earlier this year.
“The people who are going to be the cloud accounting specialists are not necessarily grey-haired accountants like me. It's the youngsters coming through.”
The glaring need for some cloud education was no more obvious to Harrison than when he was helping an AAT level three student who’d been given a manual assignment to complete. “They seem to be years or decades behind where the accountancy profession has moved,” he said.
But being pure cloud at an early stage isn’t a prudent course. As Harrison hastened to add, accounting trainees reared in the digital world are missing out on some fundamentals.
“What is lacking with people learning the cloud applications is they teach them what buttons to press to get the transactions into the accounting software and what they don't teach is how to do the quality control correctly.”
As the profession and the perception of the profession play catch-up with what it means to be an accountant in 2018, it’s no wonder there is a clash with what a new starter is required to know.
The uncertainty over the evolving definition of an accountant breeds a similar ambiguity at the nascent level of the profession. Without the current recruitment demands trickling down, Fieldhouse is surprised accountancy is an attractive prospect to anyone.
“Everything says 'accountants will be out of a job tomorrow'. If I was a 17-year-old why would I go for accountancy if there would be no job for me in the future?”
And so we must return to the profession’s rear-view mirror analogy. Given how the definition of an accountant is fast reshaping, it’s no surprise that firms are looking elsewhere for the right candidate.
As Reader joked when he explained why he’s added non-accountants to his advisory wing: “If an accountant was to drive a car, 95% of the time they’re looking in the mirror and 5% of the time they’re looking forwards.”
Seeing how the profession is focussed in so many ways on the legacy way of doing things, it's encouraging that many accountants are looking forward, rather than taking the rear-view mirror approach to recruitment.
About Richard Hattersley
Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.