There has been a great deal of talk about the war for talent in the accounting industry.
As accountancy firms continue to struggle to attract and retain talent, the balance of power between employer and employee is shifting. As employees gain more choice the traditional give and take relationship has been altered, providing more control for employees than ever before.
In this article, we consider the key drivers for the ‘great resignation’ in accounting and how firms are stepping up to the plate in the war for talent.
What is the war for talent?
A third of firms report struggling to recruit amid widespread skill shortages. The resulting capacity crisis and shifts in employee demands have combined to create a fierce competition for talent between firms at all levels. This means that firms, including the Big Four, are being forced to fight it out and make significant investments to attract and retain the right people in a new ‘candidate-led market.’ As the recruitment pool of qualified accountants shrinks, the failure to secure talent is now the number one threat to the survival of many firms.
While the financial burden of recruitment is a growing concern, the ongoing loss of knowledge and skills also has a direct impact on both productivity and the client experience, adding further strain on teams and profitability.
What is driving the great resignation?
The last several months have seen a wave of resignations across a number of sectors, in the U.S. and around the world. Links have been made to suggest that the industries which faced the most extreme increase in pressure and demand during the pandemic, such as healthcare, technology, financial services and accounting have been among the hardest hit.
Identifying what is driving employees to resign has been the focus of much debate and research. One thing hard to dispute is that accounting professionals have been pushed harder than ever before due to recent increases in demand, the growing skills shortage, and the relentless turnover of staff. Burnout levels have reached an all-time high and many more are planning to leave the profession altogether over the next five years. Even schemes such as Azet’s plan to recruit retired accountants have struggled to counteract the impacts of the ‘great resignation.’
How are firms responding to the war for talent?
With open vacancies outweighing the demand for work, employees are increasingly resistant to lower pay, limited benefits, and lack of career development opportunities. Faced with this reality, the advice for firms has been to “double down” on their retention and recruitment strategies.
Accountancy firms are recognising the need to adapt, stand out, and clearly articulate what they can offer over and above their competition. For example, Grant Thornton recently announced an increase in its employee benefits to attract new talent and keep their staff from leaving for other firms. The firm has committed to offering more flexible work arrangements such as reduced-work schedules, compressed hours and flexible days, regardless of level. Grant Thornton has also focused on supporting a better work-life balance by expanding its family-care benefits, including enhanced parental leave, access to childcare, eldercare, pet care and reimbursement for well-being expenses, including fitness equipment purchases.
KPMG and PwC have also made moves to enhance their benefits in recent months. PwC has introduced a full-time remote work policy for U.S. staff members, stating that the move would allow them “to continue to put flexibility and well-being benefits at the centre, and expand the pool of people we attract and recruit.” KPMG U.S. has also announced a variety of new compensation and benefits enhancements to address the “mental, physical, social and financial well-being” of their firm members.
CohnReznick, a Top 20 Firm based in New York, has also stepped up to the competition with much larger firms by improving their compensation and benefits policies. Sara Bridwell, chief people officer shared CohnReznick has taken a total rewards approach adding, “There is so much that goes into an employee’s decision to work with us. We want to continue to reaffirm that decision on a daily basis. I often say that folks get recruited to CohnReznick and then get re-recruited every single day.”
What will it take to win the war for talent?
What seems to be clear is that now is the time for firms to hit the refresh button and seize this opportunity to re-engage a workforce that will allow them to thrive. So how can firms do this? Here are some people-focused moves to consider.
Build a firm that the next generation want to work for
While accountancy applicants are decreasing, those still upcoming are focused on selecting a firm that aligns with and supports their values. Younger accountants in particular are prioritising company culture and looking for an employer that can provide them with the right kind of training and support at the start of their career. A recent Gallup study suggests that retaining the next generation is equally as challenging for firms, as they are three times more likely than non-millennial generations to change jobs within one year.
Young professionals want to feel valued by their organisation and to know their contributions matter. One way to help provide a greater sense of purpose and belonging is to show employees how their work fits into the larger strategy of the organisation. Another is to recognise that employees want to work for companies that value their differences. Accountancy firms must continue to focus on DEI initiatives to build a better place to work, harness the unique capabilities of their workforce, and stay competitive in the war for talent.
Understanding what is important to the next generation means firms can begin to create the kind of workplace that can attract and nurture this new talent.
Invest in the right technology to invest in your people
A top concern for firms competing for talent is keeping on top of the right technology and solutions to support, manage, and enable their teams. The pandemic accelerated the adoption of technology across the sector through necessity. However, to attract and retain talent firms must continue to proactively embrace technology with the employee experience in mind.
Employees and digital natives in particular, are now less likely to be attracted by outdated systems, ‘hand-me-down tech,’ and unnecessary manual processes. A UK survey also found that a fifth of accountants believed that investment in automation and AI would lead to better mental health. By investing in the right technology, firms are also investing in improving the working lives of their people. By listening to the needs and daily frustrations of their teams, firms can work to provide tools and solutions to empower their people and boost employee satisfaction.
Offer new ways to provide more autonomy and flexibility
A key theme in the ongoing war for talent is the demand for greater flexibility. To keep talent, firms should focus less on maintaining control and more on providing more flexibility and autonomy. Employees are re-evaluating their work-life balance and goals and for some, a higher salary comes second to having more control and self-determination in the way they work.
With new opportunities for remote and hybrid working, employees can be more selective and match potential employers against their personal circumstances and preferences. For this reason, it’s never been more important for organisations to focus on creating a working environment that supports how and where employees want to work. To remain in the running, firms must continually re-evaluate the needs and expectations of their employees and offer new ways to provide this flexibility.
Prioritise and promote career development pathways
Attracting talent is only the first step, firms must also prioritise and promote meaningful career advancement to succeed. The next generation of accountants want to be heard, seen, and developed in their role. A recent report from PwC found that 35 percent of millennials highlighted ‘excellent training and development’ programmes as a key characteristic of an attractive employer. In addition, 22 percent stated training and development as their number one most valuable benefit.
Firms must also recognise that for those looking to progress professionally, moving jobs is often the quickest way to do this. For many, work is no longer seen as a place to go, but a means to help them get to where they want to be. To be an attractive employer and secure talent for the future, firms must promote clear career development opportunities at all levels, as a priority.
As the war for talent continues, the profession has been offered an opportunity to reinvent itself. The ‘great resignation’ has highlighted the need for adaptability and for firms to accept a new balance of control. Giving more control to employees doesn’t mean losing, it’s a necessary step to take in order to win.
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