Anyone who works with or within the realms of Accounting Practice will know that there has been a series of seismic shifts in the very fabric of the sector over the last 2 years. In fact, within the whole of the professional services arena to some extent or other.
These shifts in the Accountancy world are no major surprise, and in fact many of the changes had been predicted more than 5 years ago in the aftermath of the recession.
As niche Recruitment firm dealing solely with Accountancy Practice roles it prompted us to do some research of our own via our ‘Sea of change’ survey back in March 2016.
The survey was taken by a range of employees at all levels from Junior up to Partner level across assorted sizes of Accountancy firm. The results were startling, and to follow up the data captured we spent further time speaking with selected practice Leaders to gauge their opinion on the ‘Sea of change’.
3 Prime considerations for Practice Leaders
The 3 factors we found of prime consideration to Accountancy firms we spoke to were;
1. Technology – the advances in technology which have impacted on accounting software and accessible cloud based services mean that many micro businesses and indeed mid-sized businesses can (and have) taken many of their basic compliance needs in-house. This has called for many practices to review and develop their service offering and adapt to a more consultancy led approach, or risk facing a contracting fee base.
2. Rise in Audit Threshold – With a rise in the Audit threshold leaving fewer clients than ever in need of a compulsory Audit opinion this leaves larger businesses also less reliant on compliance based services. This has compounded the impact of point 1 and has given rise to a number of interesting ABS (Alternative Business structure) firms evolving and an increasingly blurred line between Accountants/Law Firms and Management consultants. We have seen Top Ten Firms launching services to small business, firms of all sizes dipping their toes into the consulting market, and a flurry of M&A with the usual consolidators taking advantage of the opportunity; with more traditional two and three partner practices concerned about the longevity of their old business model there are many who have decided it’s time to ‘shut up shop’.
3. Skills Shortage – This is a double faceted issue. In the years where the recession hit hard, and in the aftermath, the Big 4/Top 10 firms did not take in the number of graduates of previous years. Mid to small sized firms spent less on training and development also, and many careers were put very much ‘on hold’ as firms could little afford increased salaries or the risk of bringing in new fee earners / promoting more junior team members.
The consequences more than 5 years on are a definite skills shortage, in particular at the Senior/Qualified/Manager level. This large black hole in the talent pool becomes more pronounced when you reach Tax territory or any of the other more specialised fields because it takes longer to train junior staff to a ‘client handling’ and autonomously productive level.
All 3 factors impact directly on recruitment within accountancy practice. In particular, the migration of candidates to their competitors, is a major concern for over 60% of the practices we spoke with.
”With many qualified accountants now feeling more confident about moving roles and firms paying exaggerated salaries to attract the top talent, many will be considering a career move after years of feeling trapped in the same pay grade.”
What do candidates really want? And what can firms do to help retain/attract top talent?
Job Satisfaction We asked respondents what the factors were which most impacted upon job satisfaction in their current role.
1. Organisational culture: This was the most mentioned factor and the highest rated (scoring 5 with more than 85% of those surveyed).
- It appears that the need to belong and feel ‘part of something bigger’ far outweighed the material needs for many.
- Some commented that they felt it was important to feel respected by their peers and to be part of a culture which they felt comfortable with. Social interaction was another crucial factor, with some respondents stating that they wanted to be in a city based firm with a vibrant social scene.
- By far the most frequently mentioned aspect was the need to be aligned with the overall objectives and strategy of the practice. It seems that employees feel most engaged when they feel that they are positively contributing to the success and overall goals of the firm. Worryingly however 41% of those surveyed said they did not fully understand or were ‘unsure’ about the strategic objectives of the practice as a whole.
2. Opportunity for Progression/Career advancement: This scored the 2nd highest overall.
- Unsurprisingly, accountants are an ambitious bunch and like to feel that they are progressing and moving forwards.
- Interestingly it appears that the driver for this is not purely financial, but as much driven by the need for recognition, position and a feeling of improving oneself. Indeed, several mentioned that they would rather take a lower salary short term for the potential of a clearly defined career path in the long term.
- Many ‘mid-level’ respondents (Qualified/Senior/Manager) felt frustrated with their career progression over the last 5 years and that their salary and development had been directly affected and supressed by the recession.
3. Salary and other Benefits: Further down than we expected but still important in the round.
- Junior level respondents cited benefits such as flexible perks and holiday as being as important, if not more important than salary itself.
- More senior respondents rated Salary as more important than benefits, but said they would gladly offset some financial reward for a better work/life balance.
- Alarmingly around a third of respondents said they felt they would need to change jobs in order to achieve the pay increase they felt they deserved. Other remarked that the ‘incremental salary difference’ between newly qualified and more experienced qualified accounts needed to be realigned.
4. Learning & Development Strategy: This was the 4th most key factor when it came to job satisfaction.
It appears that learning and development is key at every stage of an accountant’s career. Senior level respondents placed as much emphasis on this factor as Junior Accountants.
A large number of respondents (35%) commented that the current Learning and Development within their practice was heavily geared towards technical and reporting requirements. It appears that for some firms CPD has become a ‘box ticking’ exercise rather than matching staff skill gaps with the relevant coaching and training.
Audit based staff seemed most concerned about their future role and development;
‘The internal L&D program only prepares us for reporting and technical changes. It does not give us an understanding of how to deal with clients, or how to apply our knowledge out there in the commercial world. Sometimes this concerns me, as Audit work becomes less frequent how will I change my skills base?’
Reasons for leaving
We asked respondents who had moved jobs in the last 2 years to indicate the main reasons for doing so. Here are the most common ‘danger areas’:
- Mergers/Acquisitions – Difficulty adjusting to changes in location, team and strategy.
- Changes in structure – New Manager or peer group. Changes in the standing of their role compared to the overall organisation.
- Lack of structured learning – Those who felt that they were not progressing or being challenged over time moved on to ensure continued career growth.
- No clear Career direction – The key point here was about honesty and communication. Those who had been ‘over promised’ about promotion opportunities which never materialised were most likely to move on.
If you would like our support in addressing any of the areas highlighted within this report and how they might impact upon your Recruitment Strategy please give us a call today on 0333 577 7787 or email email@example.com for a prompt call back.