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The resource crunch in accountancy – How firms can cope
The current situation
Accountancy firms globally are facing a talent crisis.
In the past year alone, there has been a 36% decrease in the number of candidates for each vacancy in UK. Almost half of UK firms reported that these skills shortages are having a major detrimental impact on their growth.
Meanwhile, firms in US have experienced their slowest growth in eight years , with the resource crunch acting as a significant contributor.
It has become more difficult to source qualified talent, with fewer new registrations to the Chartered Accountancy (CA) and Certified Public Accountant (CPA) courses. Smaller accountancy firms also struggle to compete with the Big Four when it comes to recruitment. These large, global firms offer competitive salaries and benefits, dynamic training schemes, and opportunities to work abroad. As a result, they have ambitious graduates flocking to their doors.
Furthermore, the cost of recruiting staff continues to increase, with some professional services firms offering pay rises at almost three times the rate of inflation.
The offshoring solution
Due to talent shortages, accountants risk are having to turn down work because they simply cannot resource it.
In response, many of the largest firms in UK, Europe, and US are successfully offshoring or nearshoring work, for example to India, Philippines, Northern Ireland, Poland, Romania, etc.
The key benefits of offshoring accounting work include:
- Providing access to a larger pool of talent.
As talent pressures increase, firms are on the lookout for both junior staff who can manage routine work as well as experienced, specialized accountants offshore, who can take on more senior/managerial roles and provide more sophisticated solutions.
- Reducing costs.
Engaging accountants offshore is more cost-effective than hiring domestically, particularly when cost arbitrage is favorable. Firms also save on the expenses associated with recruiting, training, and retaining new staff.
- Managing the capacity of your core team.
Many firms are concerned about employee burnout. Offshoring shifts time-consuming tasks, such as execution and review of routine processes, away from the core team. This encourages focus on key growth priorities, generates better quality work, and also improves employee wellbeing.
Since the pandemic started, remote working has been adopted by businesses globally.
Technology continues to evolve, from better internet connections and higher computing power to increased automation and cloud solutions. These innovations facilitate smooth collaboration, regardless of location.
Firms that would previously have expected all work to be carried out ”under their roof” are now embracing the opportunities offered by a global approach, free from the limits of geography. Therefore, the pandemic has accelerated openness to outsourcing , as firms realise its potential to boost resilience and flexibility in difficult times.
Professional services offshoring has moved beyond executing mundane work. There is enough competency to handle complex assignments across professional services, be it on supporting global audit work, advising on: converting, or analyzing US GAAP, IFRS. Assisting with SOX reviews/testing, providing valuation and due diligence services, transfer pricing, etc. The talent pool available for outsourcing in countries such as India, Poland, Philippines, etc. is also growing rapidly.
Professionals are highly motivated and as such, stay committed to an organization as long as they see a career path and growth. India conforms to IT infrastructure requirements adopted globally including complying to the required data confidentiality, security, and transmission standards. As accounting firms contemplate the value of outsourcing, they must analyze current in-house processes against the costs and benefits of outsourcing before deciding what precisely should be outsourced.
India has become an especially popular destination for offshoring among large and growing firms across US, UK, and Europe. In fact, India is now a second home to at least 25 of the top 100 US CPA firms, including the major firms in the industry, with many of them establishing a presence over the last 5-6 years. The number of captive units that opened in India over the past two years was almost double that of the prior four years which is leading to India becoming an ‘office to the world’. India is on track to become the world’s third largest economy by the end of the decade led by a combination of offshoring, unique digital infrastructure, manufacturing prowess, and energy transition. With talent, technology, and infrastructure converging, India will continue to be the hotspot for offshoring activities for the foreseeable future.
For more information, please contact:
Name: Manoj Gidwani
T: +91 22 6730 9110 | M: +91 98210 04240
E: manoj.gidwani@nexdigm.com
W: www.nexdigm.com
