As I have toured the globe conducting roundtables, hosting roadshows, speaking at conferences, and surveying practitioners on industry trends, I have found that the number one barrier hindering accounting firms is talent management.
From hiring, training and retaining staff—there is no bigger cause of headaches for partners, owners and managers. They might have a clear idea on how to deliver value to their clients, but not so much on how to extract that value from their team.
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It's not surprising that talent management is such a big issue. As the demand for outsourced accounting services has increased steadily since the great recession of the last decade, the supply of talent has remained relatively flat as demonstrated by a YoY decrease of 1.8% in the related UK accounting student population in addition to the 10.2% YoY increase in advertised vacancies in 2016. At the most basic level, it is a simple supply and demand shortfall situation.
What are the fundamental issues at play?
In any effort to understand the underlying causes of this challenge, Karbon surveyed hundreds of accountants to find out what specific aspects of managing talent are causing so much angst. What we found was eye-opening. Not only did we discover the top challenges and causes, but we were also able to break down the overall issue and analyse each aspect of the employee lifecycle—from recruiting, training and performance management, all the way to retention.
Ultimately, we wanted to look at what it actually means to be an accountant today and what skills are required. To give you the high-level detail, below are the key insights from the survey.
Key insights into the talent challenge for accounting firms
Acquiring, managing and retaining staff is potentially more problematic than it is in other professions. The industry has changed, and what this profession delivers has fundamentally evolved into something very different than what it once did, so expectations from managers and employees have changed as well.
Remote workplaces are on the rise. Driven by cloud technology, most practices have at least one staff member working away from the office, which is changing hiring habits, managerial techniques and the way candidates view a potential place of work.
Recruiting is a given and yet is one of the biggest problems. 91% of accountants expect their firm’s staff numbers to increase in the short term. Yet very few of these firms feel confident that their current recruitment process is reaching, attracting and identifying the best candidates out there.
Higher education is failing in its role to properly develop the accountants of tomorrow. There is a lack of confidence in the new breed of accountants who are graduating from universities and colleges, highlighted by just 8% of firm owners and partners believing the right skills are being taught to prepare students for real life work experience in a practice.
New skills are needed, but what skills? 93% of accounting firms are providing time and resources to train their staff. However, not many of these firms are focussing on training soft skills, despite these being viewed as vital for junior accountants to possess. And although most believe that universities and colleges are ill-preparing future accountants, 49% of firms have no clear onboarding process.
Where do you go from here?
While awareness is the first step, the next question is how to solve. Over the past few months I have been providing advice on overcoming the talent challenge from how to write the best job ad to the 8 steps to finding & sourcing talent.
In upcoming articles, I’ll tackle the issues of onboarding, managing, training and retaining.