The Staffing Crisis in the Accounting Industry: Key Stats

The accounting industry in the UK has long been considered a pillar of stability, providing essential financial services to businesses and individuals alike until the staffing crisis set in. Recent trends indicate a growing hiring crisis that is raising concerns among accountants and accounting firm owners across the nation.

While practice owners are coming up with innovative solutions, such as hiring contractors and accounting outsourcing, the crisis doesn’t seem to die down. In fact, the latest data suggests a significant rise in the talent gap, which has become a wake-up call for the industry.

This blog explores the alarming statistics that underscore this crisis and delves into potential solutions, including using technology and outsourcing.

The Alarming Stats: A Glimpse into the Crisis

As the need for accounting services continues to rise, a noticeable gap is emerging between the demand for skilled accountants and the availability of qualified professionals. The consequences of this gap are manifold and can severely impact the industry’s ability to deliver quality services.

Shortage of Skilled Professionals: According to a study by ACCA, 90% of employers in the finance and accounting sectors struggle to cope with staff vacancies and face recruitment woes. Another survey highlights the concerning drop in accountancy sector applications, showing a 33% decline in candidates between May 2022 to June 2022. This shortage can lead to overburdened existing staff, increased stress levels, and compromised work quality.
Competition for Talent: With a limited pool of qualified accountants available, firms are finding themselves in fierce competition to attract and retain talent. This competition can drive up wages and place additional financial strain on firms, particularly smaller ones. This significantly elevates accountant salaries and increases the dependency on accounting outsourcing companies.
Lack of Diversity: The shortage of skilled professionals also affects diversity within the industry. Gender and ethnic diversity remain a concern, and the staffing crisis only exacerbates this issue.
Impact on Client Services: Ultimately, the staffing crisis can impact the quality and timeliness of services provided to clients. Overworked accountants may struggle to meet deadlines, leading to client dissatisfaction and potential loss of business.

END THE STAFFING CRISIS NOW

But Why Is There a Staffing Crisis in the UK?

The staffing crisis didn’t just crop up one day and created problems for accounting firms, right? As seasoned accountants, you already know how serious the issue is. But why is there a crisis in the first place?

The root cause of the challenge is the widening skills gap. While baby boomers are retiring and GenZ are inclined toward fancier digital jobs, the traditional accounting industry is forced to bear the brunt.

Dealing with the Staffing Crisis in the Digital World

Technology as a Lifeline

One potential solution to the staffing crisis lies in embracing technology. Automation, machine learning, and artificial intelligence (AI) can significantly alleviate the burden on accountants and streamline processes like most accounting outsourcing companies in the UK do.

Automation of Repetitive Tasks: Technology can handle routine and repetitive tasks such as data entry, reconciliations, and even some compliance work. This frees accountants to focus on more value-added tasks requiring human expertise.
Data Analytics: Advanced data analytics tools can provide insights that inform better financial decision-making. Accountants armed with these insights can offer more strategic guidance to clients.
Cloud Accounting: Cloud-based accounting software allows real-time collaboration between accountants and clients, enhancing communication and efficiency.

Outsourcing: Bridging the Gap

Outsourced accounting is another viable solution that can help address the staffing crisis while offering numerous benefits to accounting firms. Outsourcing involves contracting certain accounting functions to third-party providers. This includes tasks like bookkeeping, payroll processing, and tax preparation. Some of the exclusive benefits of outsourcing for accounting firms include:

Access to Expertise: Outsourcing allows firms to tap into the expertise of specialised professionals who are well-versed in specific areas of accounting. This can lead to higher-quality work and improved client satisfaction.
Cost-Effectiveness: Outsourcing can be a cost-effective solution, especially for smaller firms that might struggle to afford full-time in-house staff. Outsourcing eliminates the need for employee benefits and overhead costs associated with hiring additional staff as accounting outsourcing companies take care of it.
Scalability: Outsourcing provides the flexibility to scale up or down based on demand. During peak periods, firms can easily access additional resources without the need for permanent hires.

Frequently Asked Questions (FAQs)

1. What is outsourcing in accounting?

Outsourcing in accounting refers to the practice of delegating certain financial tasks, such as bookkeeping, payroll, and tax preparation, to external service providers. Accounting outsourcing companies in the UK are specialised in specific accounting functions and can help firms manage their workload more efficiently.

2. How much does it cost to outsource accounting?

The cost of outsourcing accounting services can vary based on factors such as the complexity of the tasks being outsourced, the volume of work, and the expertise of the service provider. Generally, outsourcing is considered cost-effective compared to hiring full-time in-house staff, as it eliminates expenses like benefits, training, and overhead costs.

Read more about the cost of accounting outsourcing here: How Much Does it Cost to Outsource Accounting Services?

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Summing Up

In conclusion, the staffing crisis in the accounting industry is a pressing issue that demands attention. Embracing technology and outsourcing accounting are two effective strategies that can help bridge the gap between supply and demand for skilled professionals. By leveraging these solutions, UK accounting firms can not only navigate the current crisis but also position themselves for sustainable growth and success in an increasingly competitive landscape.

If you want to eliminate the capacity gaps within your firm and hire skilled accountants and bookkeepers for your practice, QXAS can be your one-stop partner. We specialise in end-to-end outsourcing solutions, such as bookkeeping, payroll, and tax preparation, and are also a dedicated tech and automation partner. To learn how we can help transform your practice, call us at +44 208 146 0808 or email us at [email protected] to speak to an expert.

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We hope you enjoyed reading this blog. If you want our team to help you resolve talent gaps, reduce costs and transform your business operations, just book a call.

Pooja Kshirsagar

With a rich experience of curating content for various industries, Pooja believes in the power of words in marketing and building brands. She enjoys experimenting with different forms of content and is currently on a mission to add value to the accounting industry through her detailed and researched write-ups.

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Originally published Aug 16, 2023 01:08:19, updated Aug 06 2024

Topics: accounting, Outsourcing, skills shortage, staffing crisis, talent gap, Technology