Let’s face it, staffing has typically been a world of pain for the accounting profession for many many years now, with perhaps the exception of the last GFC, as well as may be during the early onset of this pandemic when so much was unknown. However, as NSW and VIC began coming out of lockdown towards the end of 2020, we previously reported the staff market took a step up with personnel within Melbourne based firms being offered considerable sign on fees to move employers as well as other firms losing staff to industry/commerce for considerable pay increases, all of which is untenable for firm profitability.
More recently we have heard increased commentary around the shortage of mid to senior personnel. Again, not necessarily something that is new, but seems to be rising to the fore now. As the profession debates this issue, along with many other factors impacting upon staffing such as managing employee mental health, lockdown and pandemic fatigue, and the likely fall out from the great resignation, it had us thinking how our profession got to this point. It’s not as though excessive qualified accountants suddenly left the country as the pandemic hit, and numerous migrant workers returned home as borders began to close. Yes, overseas students have been absent for the past 18 months, however these are not really the type of employees we’re talking about in this instance.
As one colleague put it, ‘why would anyone want to be an accountant?’ In their view, improving the availability of staff needed to start right back at the beginning to make the profession more appealing to would be graduates. Maybe this is something that our professional bodies need to have more involvement in. Regardless, my colleague’s comparison was this, if we take two peers, one studies accounting, the other studies in another professional field, and at the end of four years both leave with a degree and start pursuing their careers. For the accountant, often the expectation is that they will continue with further education through their selected professional body and perhaps also onto a Masters degree. As the accountant progresses through their career, they climb the ranks increasing their responsibilities but also their stresses, particularly over the last 18 months, ending up typically being paid less than, in some cases well less than, their peers in other fields to help maintain profit margins within firms. So my colleague’s question was ‘why? What for?’ Yes, now I appreciate the example is a little simplistic, however it gets the message across, why would a person leaving high school be attracted to this profession? Could this be one of the potential causes for a lack of good personnel?
Following on from the previous point, if we have not been having the same number of graduates completing accounting courses each year, or less graduates have been entering into the profession, typically via the larger firms, or those overseas students, who have graduated, have returned home to their native country, then obviously we have been seeing a potential shortage of future staff entering the profession for some time, which ultimately has to lead to a dilution in availability further up the line at some point. We have simply not been training sufficient staff to replace those more senior leaving the profession.
Then of course, because firms were finding it so difficult to source ‘good’ staff and/or as a means of reducing or managing staffing costs, at least part of the profession started to outsourcing its work to firstly India, and then later Malaysia and other Asian based countries. This was particularly beneficial for regional firms who just couldn’t find staff. Those who set up their own operations were most successful earlier on. However, this again meant we were failing to train up locally based accountants, particularly in the lower ranks because this work could be performed more cheaply overseas. Now, if we think about when outsourcing really started to take off, it would make sense that we are now missing the staff that we are.
Another influential factor may also be the changes within IT with newer software, data feeds, auto filling returns and like, often meaning many firms no longer required the more junior personnel within firms to complete basic data entry type tasks. With less junior staff, there are fewer to progress up the ranks.
So, in some ways this has been becoming a perpetuating circle for the profession. We are failing to attract sufficient people to our industry, which means we are having less graduates, and/or firms are electing to train up fewer graduates each year. Plus, we then have those firms who either need to outsource/offshore due to the inability source the right staff and/or as a means of managing costs, resulting in fewer staff being trained up and given opportunities here, thus resulting in fewer good quality middle to senior personnel. I recall flagging this as a potential issue some time ago when outsourcing was first increasing its utilisation here. Whilst I hate to say it, perhaps we have been part of the problem and now it is up to us to contribute to the solution.