As accountants are well aware, attracting and retaining staff is a growing challenge in Australia and New Zealand, where the talent pool is in sharp decline.

“It’s been visible in the past few years and really accelerated coming out of COVID,” says Craig McKell, general manager APAC of Advancetrack, an offshoring and outsourcing solutions business that helps firms manage their workload and tackle growth.

In May 2024, Advancetrack, in conjunction with Smithink, published the first global Accounting Talent Index, which explores the causes, effects and potential remedies for the talent crisis in accounting. It found nearly half of senior practitioners said they were being ‘severely’ or at least ‘significantly’ affected by their inability to recruit and/or retain staff.

What’s causing the shortage?

The reasons are multidimensional, says McKell. “It is a perfect storm. You’ve got a generation of students who have very little patience, who are not willing to put up with waiting around for a degree when they don’t see there’s a benefit down the line.

“And why would they? You’ve got graduate accounting salaries that haven’t moved in real terms in 30 years, compared with partner salaries that, on average, have risen by more than 300% in the same period. And then there’s third-party offshore recruiters that are filling the skills gap with people who are not always best qualified to be filling these positions.”

Finding the solutions

So, what can be done? “It’s got to come from multiple angles,” says McKell.

1. More education – starting in high school

“It needs to start in high school when they’re starting to think about careers and what subjects to choose. Not when they turn up to a careers night in Year 12. It’s too late by then,” McKell says.

2. Changing the AI narrative

Rather than viewing AI as a replacement for accountants, the narrative needs to shift towards AI as a tool that enhances the accountant’s role, the index found. It states: “Education and training programs must adapt, emphasising the evolving nature of accounting work where analytical skills, strategic thinking and advisory capabilities are more valuable than mere computational ability.”

3. Increasing graduate pay

“Graduate remuneration simply has to increase, and that’s going to have to come from the firms,” says McKell. “The government needs to get involved too, with tax incentives or HECS debt relief for accounting graduates.”

The index found to compete effectively with industries attracting the bulk of younger accountants away from accounting firms, partners in mid-tier firms in Australia, for example, would need to be willing to earn A$480,000 (on average) compared with A$600,000.

4. Addressing the outsourcing challenge

The investment in accounting outsourcing has surged by 40% over half a decade and McKell says Advancetrack has seen inquiries more than double in just one year. However, the right outsourcing is needed.

Advancetrack works with finding talent in India, where the Institute of Chartered Accountants of India has welcomed more than 180,000 new CAs within two years. This, against the backdrop of a deepening talent drought across North America, the UK, Australia and the Philippines, has propelled the outsourcing model to the forefront of options for consideration, says McKell.

“This shortage is a classic example of what’s known as a wicked problem: a problem that is so complex as to defy solutions. But the simple fact is that the whole accountant pipeline is leaking dramatically from one end to the other and it’s not being fixed. There’s a lot that needs to be addressed.”

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