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The recruitment crunch: Who’s to blame?

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An increasing number of firms are encountering challenges in their staff recruitment. We spoke to ACCA’s Glenn Collins to find out why.

15th Oct 2021
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It’s no secret that the profession has encountered challenges with recruiting in recent months. Even Boris Johnson acknowledged the recruitment shortage issues during last week’s Conservative Party conference.

The Covid-19 pandemic forced many practices to put the brakes on their staff recruitment in order to focus on client demands of furlough and guidance support. However, those who thrived during the past 18 months are now encountering the stumbling blocks that come with growth - their hard work is paying off faster than firms can manage within the current recruitment climate.

A recent AccountingWEB Live webinar saw accountants name resources as one of the main struggles to their current practice growth, with many claiming to be stretched “too thin” by their current workload (and this topic will be the focus of an AccountingWEB Live Expo panel session).

With so many accountants struggling, why is there such difficulty in recruiting the staff firms need?

Struggles to source

The pandemic undoubtedly served as a catalyst for the issue, but ACCA’s head of policy, technical and strategic engagement Glenn Collins has seen firms struggle with recruitment since long before anyone had even heard of Covid-19. 

According to Collins, there has been an increase in recent years of employees showing a reluctance to change, with more people questioning whether they wanted the potential of additional responsibility in their work.

On the flipside of this, the people who have the ambition might not have the skills necessary for the roles they want.

“Firms that have had a digital approach actually have a really good involvement and empowerment of their teams, many of them have a back list of candidates coming through that are really high quality,” he said.

Collins explained that the firms that have been less focused on digital implementation are the ones that are likely to be struggling with recruitment, as well as retention of existing team members.

With the opportunities for remote and hybrid working opened up through national lockdowns, people have had the chance to be more selective in their employment; employees can take into account their own personal circumstances and what they're looking for in their future.

“That forward looking sustainable practice is what people are looking for,” said Collins “They're looking to have these qualities demonstrated to them when they're making these moves at work.”

Hanging up the calculator

The headaches of the past 18 months has also seen many in the profession reach the end of their tether, with an increasing number of accountants ready to throw in the towel on their careers after a treadmill furlough workload and in the face of the upcoming MTD changes.

“People are reassessing what they want to do,” said Collins. “Some of the difficulty for practices is reengineering themselves: those that have been successful have made those moves and embedded it within their firms.”

He explained that the firms that have struggled are the ones that have been attempting to tackle that transformation alongside a recruitment and client demand. It’s incredibly difficult to manage changes in your firm alongside the everyday pressures of practice.

“Most practices will have a great vision: they’re business people, they want to succeed, they’re relying on an innovative workforce running through that they can actually utilise, and they know that the client relationship is of the utmost importance.

Even with recent schemes such as Azets’ plans to recruit accountant retirees, there does seem to be a definite stream of people within the profession heading for exit sign. 

Sub-par skillsets

The recruitment crunch is also largely down to there being less prospective employees with the necessary skills and training to survive in a professional practice.

According to Collins, it’s all about keeping up to date and relevant in the marketplace: “With that, comes the fact that you will be more marketable. Those people with the skills and up-to-date, current knowledge are in greater demand. Those are the ones being picked up.”

The importance of having good financial knowledge, being able to plan for the future, having the skills to risk analyse and look at relevant opportunities, comes at a premium.

If you’re employed or in practice there is a greater demand for this skillset, which has created something of a skill shortage in recent years.

Decrease in accountancy applicants

“There is a flow through from people choosing the profession as an option,” commented Collins.

There are several entry points for accountancy: people coming in as undergraduates, people who are going down an apprenticeship route, and those seeking a career change. During the pandemic, practices might have been hesitant to take on potential employees whose skillset and training weren’t up to scratch with the demands they had to be meeting, Collins explained. This has in turn led to less people being able to learn the necessary skills.

“For example, within some firms certain trainees would have been put on furlough. This means they would have missed out on a period of training and development and everything else where you would have expected to pull them up to. That naturally would have an impact running through.”

He added that if firms want those skills coming through, they have to ask how they intend to give employees that vision. So, how do you help them navigate their future career?

Remote recruiting

On the plus side, the pandemic also sped up the process of moving towards a remote working world, with firms looking beyond geographical boundaries in their recruitment.

“There are some real great opportunities out there for people, particularly if you look outside of what is the norm. If you ask what do I need? What is essential to me? If you highlight that through to your potential employers, that’s all the more positive.”

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Glenn Collins will be speaking at the first day of our AccountingWEB Live Expo this December. Don't miss out - register now for free access to all our panels and conferences.

Replies (23)

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By Hugo Fair
18th Oct 2021 20:41

The BIG issue (not just within the Accounting profession but most of the previously office-based professions) is a combination of two things:
a) The desire of an increasing %age of the population (not just the 50+ years old) NOT to use all their energies on work;
b) The discovery of the joys in NOT spending a typical 10 hrs/week on commuting (as well as the saving in transport costs).

The loadsamoney ethos of the '80s continued for longer than many realised (through most of the Blair years), but there has been a groundswell of evolution towards a better 'life balance' (whether through family time, hobbies, helping in the community or just a second job using different skills).
And this evolution has been nourished by points a) and b) above during the pandemic.

When I encounter recent graduates (often with a 1st class degree and obvious enthusiasms as well as energy), I'm no longer surprised when they don't want to start a 'career in the City' (with oodles of dosh but knowing that there will be no hours in the week that are truly theirs).
And I'm certainly not going to try talking them round when I think they've got it right!

So, although it's not really a new set of problems, those with a recruitment crunch might be advised to start by reviewing how they could re-allocate their existing resources and existing workloads ... in order to create a more satisfying (and therefore attractive to clients and potential employees) environment - with greater flexibility over location and hours (possibly backed-up by using contacts to have a pool of 'back-up resources' contracted-out when demand peaks unexpectedly).

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Replying to Hugo Fair:
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By AnnAccountant
19th Oct 2021 16:56

A firm I did some work for had to let a grad go as he left on the dot every day and, as a result (though that might not have been the whole problem), wasn't coming up to scratch after 3- 4 years.

He had no concept that being a trainee isn't a 9-5 job. In my old fashioned view, you have to spend as much time as it takes to take on board the knowledge needed to become a proper professional - and you put that time and effort in for your own benefit/as an investment, not just for your current employer.

I think some of them have seen too many Twitter memes posted by people in dead end jobs - or, if I'm being really cynical, people who say things to attract an internet following that they can then monetise.

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Replying to AnnAccountant:
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By Hugo Fair
19th Oct 2021 18:29

Well at my age I'm not likely to disagree with your premise that expectations, along with commitment / involvement / pride and a few other characteristics, seem to have dropped off the scales on which my & your generations were brought up.

On the other hand, I can remember being shouted at by my maths teacher in the mid-60s for using a slide-rule ("how are you going to understand your log tables if you rely on that?" being the gist of the attack). Plus ça change!

Hence my avoidance of any comment on the validity of the younger generation's approach (for the benefit or otherwise of themselves or of wider society).
I was merely pointing out there has been a sea-change in the employment/career expectations of the population at large (and most noticeably amongst the young) - which has been accelerated by the experiences of covid-19/lockdowns/WfH.

So the recruitment crunch is not a temporary blip, more of an indicator of the future that employers would do well to try to understand.

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Replying to AnnAccountant:
Stepurhan
By stepurhan
20th Oct 2021 08:52

AnnAccountant wrote:

He had no concept that being a trainee isn't a 9-5 job. In my old fashioned view, you have to spend as much time as it takes to take on board the knowledge needed to become a proper professional - and you put that time and effort in for your own benefit/as an investment, not just for your current employer.

It seems to me there are plenty of ways of getting additional knowledge as a trainee, without putting in extra hours at the office. Study books and exercises or reading this very site regularly to name but two.

You are positioning putting in extra hours as if it is solely for the benefit of the trainee. Are you saying the employer gets no benefit from a trainee that works extra hours? Benefits that they are receiving whilst not even paying overtime at the likely cheap rate of a trainee.

If someone needs to do unpaid overtime to "come up to scratch", perhaps the problem is the training being given, not the employee.

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Replying to stepurhan:
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By Jimess
20th Oct 2021 12:32

From my reading of the post I think the extra hours referred to the study and attending courses associated with the job training rather than actual work hours - both the employer and employee benefit from that commitment. I think the biggest problem with trainee recruits these days is that more and more university and college courses are geared towards certain sectors and there is less focus on the subjects that businesses are crying out for to develop trainees further. As for accountancy apprenticeships - I am close to quite a large city and there is only one organisation that works with accountancy apprentices in the area and the accountancy/business studies course offerings by the college have dwindled to virtually nothing. I have lost count of the number of CV's that drop in my inbox from graduates that have degrees in totally inappropriate subjects for the work we do. I am not undermining the value of studying - all learning is useful, it's just that some candidates seem to think that a degree in any subject will suffice without actually considering what they need for the sector they wish to work in.

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Replying to Jimess:
Stepurhan
By stepurhan
20th Oct 2021 14:53

Your interpretation may be correct.

The reason I interpreted it as unpaid overtime is that AnnAccountant only specified one reason for their past trainee being let go.

AnnAccountant wrote:
A firm I did some work for had to let a grad go as he left on the dot every day and, as a result (though that might not have been the whole problem), wasn't coming up to scratch after 3- 4 years.

The only cited reason they were not "coming up to scratch" was because they left work at the end of their working day. No mention of not applying themselves to studying or not taking courses. Simply leaving at the end of their paid hours.

If I was especially cynical, it would be possible to interpret it that coming up to scratch required working outside contracted hours. I sincerely hope that is not the case, because that would be a foolish reason to fire an otherwise competent employee.

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Replying to stepurhan:
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By AnnAccountant
21st Oct 2021 13:52

Only specified one reason?

Your post includes this quote - "though that might not have been the whole problem" - which hints at other reasons. Ok, I didn't "specify"/list them out (for the purposes of brevity and to stay on the point I was making) but it is pretty clear that I am not saying that the lack of overtime was not the whole problem.

The problem was that, one way or another, he was not at the level he needed to be for someone of 3-4 years experience. In my humble view as an onlooker, he wasn't "qualifed professional" calibre yet.

If you are going to be argumentative then at least try not to fuel your arguments with made up premises.

Btw - I've seen you have "bad days" before and take it out on people on here. I'm not rising to it.

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Replying to stepurhan:
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By AnnAccountant
21st Oct 2021 12:04

"You are positioning putting in extra hours as if it is solely for the benefit of the trainee. Are you saying the employer gets no benefit from a trainee that works extra hours? "

I didn't say or mean that at all. Of course the employer gets a benefit. The trainee does too in that they gain knowledge and experience quicker - it is a personal investment in themselves.

Also, not everything is at odds. Things can be mutually beneficial.

As I see it, it is in a trainee's interests (this is applicable post-qual too) to learn as much as quickly as possible so you can progress quicker. Who wants to be stuck with grunt work and grunt pay for ages? Now, slow progression like that might suit some practices, but it wouldn't have suited me.

But each employer and employee to their own.

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By bendybod
19th Oct 2021 09:53

And then there's the massive drop off, since about late 2018, of candidates who were originally from European countries. Historically, they would make up at least 50% of the candidates for us. Now, they are a rarity.

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By jon_griffey
19th Oct 2021 10:38

A major difficulty, especially at the smaller firm end is that much of the junior work that we were weaned on has gone, such as adding up cashbooks, ticking bank statements, ETB's, balancing control accounts etc. In other words there is less and less opportunity for juniors to learn the real nuts and bolts of accounting that is the foundation of their knowledge, which makes training difficult. I think the lack of trainees coming through over recent years has led to fewer experienced staff available now.

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Replying to jon_griffey:
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By North East Accountant
19th Oct 2021 12:07

Spot on.

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Replying to jon_griffey:
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By Paul Crowley
19th Oct 2021 15:11

Agree
I have four people who do wages on the software
Not one could even make an attempt at doing a wages calulation with a calculator.

Understanding what the software actually does or should do is critical

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Replying to Paul Crowley:
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By North East Accountant
19th Oct 2021 16:05

I've still got Table A Pay Adjustment Tables (1993 Version) if you want to show them how it's done......

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Replying to jon_griffey:
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By bendybod
20th Oct 2021 13:38

I was saying this the other day. I have just taken on a school leaver but I commented that you can't give people bank recs to tick out these days - you have to give them training in how to use your (or the client's) software of choice so that they can run the bank reconcilation function in there.

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Stuart Walker Yellow Tomato Copy
By winton50
19th Oct 2021 10:44

It doesn't take a reduction of much to put an entire sector under pressure.

The labour market is very much self-regulating so as soon as there is any sort of oversupply, candidates go off and do other things.

The problem comes when you have a demographic timebomb coupled with a major sector shock.

All sectors have been facing the fact that their workforces are ageing. Whilst there was a bit of a baby boom in the early 2000s this is something that will continue. See Japan for an example of where we will be in 15 years time.

The second shock was the effect of Brexit. I worked alongside many EU people and whilst they may only have made up 10%-15% or so of the workforce, a large number have returned to work in the EU.

When I spoke with them they cited the cost of staying, the difficulty in travelling to and from home and the general atmosphere. Put simply if you tell people they aren't wanted they go somewhere that they are.

Many of the people I know relocated to places like Holland and Belgium where English is pretty much the accepted business language.

It's a shame but then we got what we asked for.

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Replying to winton50:
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By Ian McTernan CTA
20th Oct 2021 12:01

And yet the odd 5m or so applied to stay...which suggests strongly that the majority didn't leave. The only person I know that left was Polish, and he went back because the wages in Poland have become much much better and he wanted to be with his family.

We now have more people in employment than ever before, coupled with a low unemployment rate and people who don't work, hence the labour shortage.

For too many years companies relied on cheap imported labour..

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By Jimess
19th Oct 2021 11:01

I don't think the accounting skills shortage is totally down to the pandemic, it has been happening to a greater or lesser degree over the last ten years or so. There is definitely a shortage of trainee candidates willing to learn and with the keenness to apply their knowledge to the work they do. That goes deeper than lifestyle changes or anything else that came about as a result of the pandemic. Good bookkeepers with a decent grasp of double entry are also few and far between, and have been scarce in my area for a long time now. Many have not pinned down the basic tenets of bookkeeping before launching on training with a particular software package and as a result have difficulties translating their knowledge into other areas. Sadly technology is gradually removing versatility from the working world, something I was encouraged to develop as far as I could as a trainee.

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Mark Lee 2017
By Mark Lee
19th Oct 2021 11:23

Glenn is absolutely right. This is not a recent phenomena. In all my years of mentoring accountants one of the biggest issues has always been how to recruit good enough staff.
As Glenn says, there are plenty of reasons why staff may not want to stay in the profession, take on more responsibility or risk moving from the frying pan into the fire.

There is also an issue with the way that many firms still advertise roles as if the world hadn't changed in the last ten plus years. Websites and social media can be key ways of proving a firm is a more attractive workplace than others. Testimonials from previous recruits who have moved from larger firms and from smaller ones can also be helpful. Aa can incentives to tell their friends

There are other options too if you cannot make your firm sufficiently attractive to your ideal team members. If you want things to change you have to try doing things differently.

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Replying to bookmarklee:
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By bendybod
20th Oct 2021 11:38

Wholeheartedly agree. Out of interest though, how do you use SM to actually attract recruits. My experience has been that what you actually get is the same recruiters contacting you and saying "I see you're looking for staff. I've got so and so on my books who would be ideal". Well, ok, not at the moment because they haven't but it is an ideal opportunity to move away from paying huge fees to recruiters if I can find an alternative that actually gets any results for my £££. I am genuinely interested and have tried to move away but with virtually zero success.

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By AnnAccountant
19th Oct 2021 16:51

I'm not old at all but I'll be cutting back on work soon. Simply because I can afford to and I'm at a point where I'm hitting diminishing returns by stacking more money in investments/the bank, especially with inflation taking off.

Work less and work for a little bit longer is the ticket I think - maybe knock it on the head completely 5-10 years from now depending how things pan out both for me and in the world.

Some clients will have to find a new adviser next year - and I bet they will cost more.

Btw - This isn't Covid driven - I was heading this way anyway.

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Replying to AnnAccountant:
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By Ian McTernan CTA
20th Oct 2021 12:04

I've always had a decent life/work balance ever since I started my own practice (solo, thanks very much) working from home.

Never had the issue of diminishing returns- two divorces took care of that for me:-)

I don't think some of my clients will ever let me retire even if I wanted to, so I plan to work until my 70's unless the marbles fall out entirely before then.

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Mark Telford Chartered Accountant
By Mark Telford
24th Oct 2021 20:29

Too many employers have the "what's in it for me" for me attitude - might have been ok when I trained in late 80's, early 90's - definitely doesn't work now.

As for 'only' working 9-5 - what's wrong with that if the work is getting done?

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By Christian06
28th Oct 2021 08:28

To sum it up, the COVID pandemic is to blame. Shutdowns and social distancing caused businesses across industries to close their doors. Those that relied on face-to-face interactions — like restaurants — moved toward a remote, curb-side or delivery business model. Layoffs followed.

Meanwhile, organizations in certain industries, including warehousing, e-commerce, fulfillment and grocery stores, were facing unprecedented demand. To attract workers, they raised wages and offered signing bonuses. Workers flocked to these positions and are not likely to leave them. In fact, a recent survey by Joblist found that nearly 30% of restaurant workers do not plan on returning to the industry.

Lastly, enhanced unemployment benefits could incentivize some workers to stay home. According to QSR Magazine and Black Box Intelligence, these circumstances came together to create "a perfect storm" of talent shortages.

Hiring decisions should be about candidate experience, culture fit for the employer brand, and creating a healthy and diverse workforce. Unfortunately, in today’s job market, sourcing any qualified candidates is a far bigger concern.

https://www.walgreenslistens.kim/

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