‘Dire shortage of accountants prompts call for a shake-up’ screamed a recent Financial Times headline in an article about the profession in the US. It described a ‘threadbare’ pipeline of certified public accountants to replace retiring baby-boomers. In the UK, the situation is more nuanced, but the wording in job advertisements reflects a sense of urgency. That cliché, ‘the battle for talent’, might actually be happening.
It’s about recruitment and retention. But this simplistic statement encompasses everything from the pool of people in which the profession fishes, to the way it treats them once they join.
Outside of the US, evidence of a shortage is less pronounced. The latest Key Facts and Trends in the Accountancy Profession publication from the Financial Reporting Council (FRC) recorded a 3.5% decline in student numbers in the UK and Republic of Ireland in 2022 after a slight increase the year before. Worldwide the decline was 2%.
Competition has increased for people with professional/technical skills and an ability to adapt
Membership of the seven accountancy bodies covered by the FRC report continued to grow. Hays’ most recent Salary and Recruiting Trends found that 81% of employers are expecting a shortage of suitable candidates to fill vacancies, up from 67% the previous year.
The context is not just ageing workforces in the developed world. Competition has increased across sectors for people with professional/technical skills and, crucially, an ability to adapt. Think of ‘digital natives’ with fewer formal qualifications. This is less well suited to the traditional ‘cram fest’, as the American AICPA puts it, for those becoming accountants.
As student debt has grown, being paid while you learn has clear attractions
Education routes
The approach of the UK and Ireland-based bodies has advantages over the US degree-based system. A resurgence in apprenticeships available to school-leavers has widened the pool. Drawing on the ‘articled’ tradition, it offers upward social mobility to those without higher education. As student debt has grown, being paid while you learn has clear attractions, but the profession needs to ensure that this intake is not disadvantaged further up the career ladder.
According to the FRC’s survey, the UK/Ireland bodies ‘do not require entrants to hold a university degree’. Less than 40% of ACCA’s international range of students holds one. For graduates, the degree need not be ‘relevant’ – they can learn to think in other ways before plumping for the profession.
A heavily exam-based regime may put off potential recruits, hence the call in the US to drop the fifth year of university classes. More generally, this plays into the diversity debate, which has extended to monitoring the intake from lower socio-economic groups (eg school type) or with different ways of learning (neurodiversity). Such liberalisation should not only help expand the pool but also influence training methods, perhaps using AI as a means to level up communication skills.
There is further to go on access, pay, prospects and working conditions
Pay is key
Among more traditional ways to increase the profession’s appeal, the most obvious is to pay more. Last year FRC chair Jan du Plessis advocated this for the audit segment, noting the firms’ increasing profitability. ‘They have the resources available to increase the pay levels of more junior people,’ he told the Financial Times.
As the labour market moves in favour of employees, ACCA’s Global talent trends 2024 report points to the main issues. On salary, only 37% say they are satisfied – inflation has exacerbated their concerns. The majority want their next move to happen within two years – pay and career opportunities are the main reasons. Other factors influencing staff unease include work pressure, with 57% saying their mental health has suffered (see also AB coverage of the report and specifically the UK findings).
In the battle for talent, accounting has some perennial advantages: internationally transferable qualifications, comfortable levels of pay and a variety of roles. The profession should play up the vocational pluses of working in the public interest, keeping businesses and other organisations honest and sustainable. But growing recruitment and retention challenges indicate there is further to go on access, pay, prospects and working conditions.
Career Navigator
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