What CA ANZ members say about accounting talent shortages
The impact of the accounting skills shortage is being felt across business and the broader economy. What is the solution?
In brief
- CA ANZ surveys show talent shortages across 11 accounting, audit and finance-related occupations in Australia.
- Research from Advancetrack reveals that 74% of accounting firms surveyed are increasing salaries to attract and retain talent.
- Responding to the skills shortage requires a multifaceted approach to build the pipeline of accounting talent and promote the attractiveness of the profession.
The skills shortage continues to play out across the Australian and New Zealand economies – and the accounting industry is among the hardest hit. CA ANZ’s recent surveys show shortages across 11 accounting, audit and finance-related occupations in Australia alone, with a nationwide shortage of external auditors being particularly acute.
The findings are based on an online survey of 449 Australian members between January and February 2024, as well as a survey of the country’s six largest professional services firms conducted in May.
Sarah Davidson, CA ANZ’s policy, thought leadership, education, skills and migration leader, says CA ANZ also seeks feedback from members, the wider profession, employers and recruiters throughout the year, which echoes the survey findings.
“The main reasons for the accounting and audit skills shortage are the pipeline problem and the perception problem,” says Davidson.
“The pipeline of students enrolling in higher education programs of accounting has almost halved since 2018. Perception is an issue because most school students don’t really understand what an accountant does or the exciting career opportunities that accounting skills can lead to.
“It is critical that we address the supply side because demand is increasing. CA ANZ’s forecasts show that a further 31,000 accounting professionals will be required over the five years to 2028, and 58,000 over 10 years to 2033.”
Accounting talent squeeze
The experiences of CA ANZ members are reinforced by the findings of the latest Accounting Talent Index from Advancetrack, which provides offshoring and outsourcing solutions to accounting firms across the globe.
Advancetrack’s research, conducted in partnership with consulting firm Smithink, draws on insights from more than 270 accounting firms across the globe. It shows that 45% of firms describe the effects of the skills shortage as severe or very significant, and 74% say the shortage is significantly worse than three years ago.
More than half of firms also report at least a 10% compound annual growth rate (CAGR) in non-billable partner and manager-level hours due to a lack of junior-level staff, and 81% have seen their firm’s salary costs significantly or moderately increase over the past three years.
Craig McKell, Advancetrack’s APAC general manager, says the COVID-19 pandemic accelerated trends that were already underway across the accounting profession.
“Keeping talent is one thing, but attracting people is proving to be a huge challenge,” he says. “Not only is recruitment becoming more competitive, but the pool of talent is getting smaller.”
Responding to the challenge
The impact of the skills shortage is being felt by businesses, capital markets and the broader economy.
“There are significant mandatory legislative and regulatory audit requirements that must be fulfilled by suitably skilled and experienced external auditors if trust and confidence in capital markets is to be upheld,” says Davidson. “We also have new climate reporting and assurance requirements commencing next year in Australia, which is likely to exacerbate the auditor shortage.”
Businesses are adopting a number of attraction and retention strategies to manage the shortage. Advancetrack’s research shows they include increasing salaries (74%), offering non-financial benefits, such as additional leave and flexible working arrangements (64%), investing in training and professional development (58%) and offshoring (47%).
“The challenge with increasing salaries is that accounting firms sell hours for money, but there’s only so many hours in a day that they can sell,” says McKell. “The cost of overheads are also increasing, which puts more financial pressure on firms.”
McKell adds that while flexible working arrangements are desirable among candidates, they are now considered an expectation, rather than an additional benefit.
“Most firms are now offering flexible working arrangements, so it’s no longer viewed as a stand-out point of difference,” he says.
Overseas accounting talent
Davidson adds that CA ANZ’s member surveys have also found extensive recruitment efforts to address skill shortages, ranging from internal secondments and subsidising education expenses, through to offshoring and recruiting workers on employer-sponsored skilled visas.
“It is in Australia’s interests to continue hiring experienced overseas accountants and auditors to fill the talent gap that is not being met by domestic candidates, international graduates, recent migrants or those on skilled visas,” she says.
CA ANZ’s survey of Australia’s six largest professional services firms showed strong reliance on temporary skill shortages visas, with an estimated 674 external auditors recruited on employer-sponsored skilled visas over the past 12 months and about 1631 currently employed on such visas.
Ongoing CA ANZ advocacy
Davidson says that the skill shortages are multifactorial, and CA ANZ is taking a multifaceted approach to address the challenge. This includes advocacy through submissions, consultations and engagement with government and education bodies.
“Focus areas include higher education funding reform, migration system reform, improving work readiness and employment outcomes for international accounting graduates, inclusion of a robust accounting component in high school curricula and targeted investment in accounting, financial literacy, sustainability, digital and AI skills,” she says.
Davidson points out that in June, CA ANZ made a submission to Jobs and Skills Australia on the draft Core Skills Occupation List in an effort to fast-track temporary skilled visas for overseas accountants and auditors who have the skills Australia needs.
In addition, CA ANZ recently launched its 'Make Epic Things Happen' advertisement, to help change gen Z’s and gen Alpha’s perceptions of careers in accounting.
As Davidson explains, “We’re working to not only address current skill shortages but also to build the pipeline of future talent by promoting the attractiveness of the profession.”