Where have all the accountants gone?

The federal government’s list of skills shortages indicates the last time there was shortage of accountants in australia That was in 2008. Until recently, data shows that there have always been enough accountants to meet job vacancies. In other words, it’s an employer’s market.

In 2014, the Australian Financial Review wrote that accounting firms could “allow ourselves to be selective”, because it was “not difficult to recruit in today’s market”.

But fast forward to 2022 and most accounting professionals will tell you there’s ‘too many accounting jobs and too few accountants.’

This sentiment is backed up by the ABC Accounting Market Pulse Report indicating that at least 93% of accounting firms consider it difficult to find quality staff.

So where have all the accountants gone?

In researching this question, te Benchmarking Group discovered three main reasons for the shortage of accountants:

  1. The competition of qualified professionals[i] in Australia
  2. The lack of accounting students in Australia and around the world
  3. The heavy reliance on migrant accountants in Australia

1. Competition for skilled professionals in Australia

Over the past 10 years, the accounting industry has seen an increase in jobs requiring academic qualifications and a decrease in clerical and bookkeeping positions.

As indicated in the previous Comparative research, this is mainly due to the automation of accounting administration and the ease of online accounting software such as Xero and MYOB. This displacement of labor is not unique to the accounting industry; it is consistent across all industries in Australia. As well as most developed economies.

In Australia, the number of vacancies for qualified professionals now exceeds the number of qualified professionals seeking employment.

Thus, accounting firms not only compete with other businesses for skilled labor, but also with other industries.

Accountants have a unique set of skills that can progress into other general management and business advisory roles. However, the reverse is not always possible.

This is highlighted in a recent article stating that “Accountants may hold the key to solving the financial planning skills shortage.”

For some accountants, the move to other industries can be tempting. Especially when they could earn (on average) around 82% more per week as a financial investment adviser and 71% more as a managing director. (ABS, compensation and employee hours)

2. Lack of accounting students in Australia and around the world

The number of students studying accounting as a non-academic degree[ii] has steadily declined over the past eight years. Not only has the number of actual students decreased, but also the percentage of the total number of students studying accounting.

This is not an entirely new problem for the industry. In 2014 it was reported that the number of Australians studying accounting had fallen by 20% since 2001. Since 2014, the number of Australian students studying accounting has fallen another 10%.

The decline in the number of accounting students is also happening globally. The United States has seen steady growth drop in the number of students since a peak in 2012. In addition, from 2019 to 2020 the number of students in the United Kingdom and the Republic of Ireland fell by 2.1% and by 2.7% worldwide.

Although immigration is low in Australia, the global student shortage is impacting Australian businesses as it creates more opportunities for Australian-trained accountants to travel overseas.

A decline in the number of students reduces the pool of accountants globally, which increases competition for labor locally.

3. The heavy reliance on migrants within Australia’s industry

In Australia, there is a much higher number of migrants working as accountants compared to other industries. This was supported by the government’s Skilled Migration Scheme.

However, in 2020-2021, immigration to Australia has dropped by 71%. This has undoubtedly reduced the number of qualified accountants in the market.

While immigration to Australia has started to increase, the industry is still feeling the impact of 18 months of negative net migration.

What can accounting firms do to address the current short-term shortage?

Businesses should expect a shortage of accountants for the next 1-2 years. While putting in place attractive compensation and well-being programs at work can be beneficial, it is not the only option. Accounting firms can also think outside the box and implement different strategies to ride the wave. This may include:

  1. Company restructuring to hire more non-accounting positions

While skilled professionals are scarce, there are currently 1.39 unemployed clerical and administrative workers for every advertised job. Businesses may have the ability to add support roles to address labor shortages.

  1. Hire business advisers instead of accountants

Business advisors can be a complementary service to accounting firms. Removing some of the consulting duties of accountants can free up time to focus on specialized tax and accounting services.

  1. Improve business productivity and efficiency

Automating documents and streamlining processes can dramatically increase a company’s capacity. Businesses can examine systems to see where efficiencies can be made.

What are the long term solutions?

The reality is that the accounting industry will always need qualified professionals. Additionally, the future demand for skilled professionals will continue to engulf the need for clerical and bookkeeping positions.

Therefore, for the industry, attracting more people to study and train as accountants should be a priority. This includes both Australian-born and international students, as well as non-accounting professionals.

The long-term solution may lie in better working conditions industry-wide or in offering more diverse roles for junior accounts. Or maybe the industry just needs a rebrand.

Whatever the solution, the industry must work together to determine how it can become more attractive so that it can continue to thrive in the years to come.

Julia Thomson is responsible for data and content analysis within the Benchmarking Group.

[1] Note that in this report, skilled professionals are equivalent to the ANZSCO classification of Skill Level 1: occupations that require a bachelor’s degree or higher (or at least five years of relevant experience).

[1] The non-academic qualification includes a bachelor’s or higher degree, diploma, postgraduate certificate or certificate I, II, III or IV.

Where have all the accountants gone?

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Last update: August 31, 2022

Posted: August 31, 2022

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