The Solution to Manage Talent Shortages in the UK Accounting Industry
August 29, 2023
Outsourcing has emerged as a viable solution for UK accounting firms to tackle the challenges posed by increasing competition in the market. By embracing outsourcing, firms can achieve cost savings and provide better value to their clients. Sustainable growth in the UK accountancy space has proven to be difficult, with talent shortages being a key roadblock for practices over the past decade.
According to the Association of Chartered Certified Accountants, 90% of employers in the financial services sector are struggling to fill staff vacancies and overcome recruitment challenges. The demand for professional accounting services has significantly increased due to complex market conditions and regulatory uncertainty.
Accountancy firms are unable to keep up with this demand, which hinders their ability to grow and expand their services. To handle this issue, many UK accountancy firms decided to explore outsourcing as a potential solution to their recruitment challenges.
Before outsourcing, few UK accountancy firms experienced slow turnaround times on queries and accounts, while costs were rising faster than revenues. By entrusting various back-office operations and tasks to an accounts outsourcing firm, the accountancy firm was able to focus on business development and enhancing customer experience through improved relationship building. This strategic move led to a 40% reduction in incremental costs and facilitated a tenfold increase in growth.
In times of economic growth and recession, having the flexibility to adjust costs at scale is a competitive advantage, not only for accountants but for any business. Moving costs from fixed to variable expenses provides a competitive edge, and outsourcing enables companies to achieve this flexibility. Moreover, outsourcing improves efficiency and allows accountancy professionals to focus on their core competencies and build relationships, which is invaluable.
While client-facing operations, such as advisory services and networking, are difficult to outsource since they rely on building relationships, back-end tasks like bookkeeping, producing accounts, and payroll are ideal for outsourcing. Breaking down the value chain through outsourcing, benefits accountants by reducing costs while maintaining client relationships and providing more time for advising clients.
Given the current economic climate, accountancy firms in the UK and beyond must leverage these efficiencies to remain competitive and sustain growth. The current talent shortage poses a significant challenge, making it essential to find cost-effective solutions to meet the demand and provide clients with the necessary attention.
Accountancy was relatively late in adopting outsourcing compared to other sectors like IT and customer service, which started outsourcing in the early 2000s. However, due to the increasing number of success stories, there are now recruitment organizations and outsourcing partnerships that cater specifically to accountancy firms. Although there is a wide range of selections available, practice owners must exercise caution in choosing a trustworthy partner to handle essential operations and ensure quality.
When selecting an accounts outsourcing firm, having a presence in the UK is crucial to assure that data and relationships are secure. Additionally, capacity is a key consideration for accountants looking to outsource. Firms with growth prospects and reasonable size should inquire about the outsourcing partner's ability to replace staff when needed and provide prompt staffing solutions.
Trust and quality are paramount for establishing successful collaborative relationships between the UK accountancy practices and outsourcing specialists. In an increasingly competitive market, outsourcing presents a dynamic opportunity to unlock potential cost savings and deliver value to clients, enabling firms to move forward. If you feel a shortage of skill and talent in your firm, contact us now.