The UK’s accountancy sector is facing a profound skills shortage, which has become a growing concern for firms across the country. According to a survey by Advancetrack, an outsourcing specialist, nearly 45% of accounting firms are “severely” or “significantly” impacted by this shortage of skilled accountants. As businesses battle to find qualified talent, industry leaders are increasingly pointing to competition from other sectors like fintech and technology as key factors driving talent away from traditional accountancy careers.
The Scope of the Crisis
The skills gap in the accountancy sector is not a new issue, but its scope has deepened in 2024. According to ACCA (Association of Chartered Certified Accountants), the global accounting industry is suffering from a significant talent shortfall, with the UK among the hardest hit. The demand for accountants is surging due to factors like post-Brexit regulatory complexities, advancements in digital finance, and an increase in compliance and auditing requirements. Yet, the supply of new talent is unable to keep up, largely due to the appeal of more dynamic industries such as fintech and data analytics.
The result is that many accounting firms are operating with reduced staff, making it increasingly difficult to meet the growing regulatory and compliance burdens. The Financial Times recently reported that some firms have been forced to outsource functions or adopt automation technologies to address the labour gap. This has only partially alleviated the pressure, as firms still require human expertise to manage complex tasks such as auditing and regulatory reporting.
Why Is There a Talent Shortage?
- Attractive Alternatives in Tech & Fintech: Young professionals are increasingly drawn to careers in fintech, which offer more exciting roles, flexible work environments, and, in many cases, higher salaries. According to a 2023 report by Deloitte, fintech jobs are growing at double the rate of traditional accounting roles. This has siphoned off many graduates who might otherwise have pursued a career in accountancy.
- Aging Workforce: The UK accountancy workforce is aging, with a large percentage of professionals approaching retirement in the next 5–10 years. The Financial Reporting Council noted in 2022 that this demographic shift will exacerbate the skills gap, as younger workers are not entering the profession quickly enough to replace retirees.
- Lack of Digital Skills: As the profession increasingly demands proficiency in data analytics, cloud accounting, and AI-powered tools, there is a growing digital skills gap. A PwC survey found that 40% of UK accounting firms reported difficulties in hiring individuals with the necessary technical skills.
Economic Impact of the Shortage
The skills gap is not just a talent issue but an economic one. The Office for National Statistics (ONS) estimates that GDP growth could slow in sectors reliant on financial reporting and compliance if the shortage of skilled accountants persists. Additionally, firms have reported increased hiring costs and slower client onboarding, further straining their capacity to meet client demands.
Addressing the Crisis: What Can Firms Do?
- Investment in Training and Upskilling
Firms must invest heavily in training and upskilling their existing workforce. Providing training programs that focus on digital competencies, such as AI and blockchain in accounting, will help retain current employees while making the profession more attractive to new talent. The Chartered Institute of Management Accountants (CIMA) has recently launched digital upskilling courses, a sign that the profession is starting to evolve.
- Attracting Young Talent
Accountancy firms need to reshape how they present themselves to younger generations. Offering flexible work environments, competitive salaries, and clear career progression paths can help the profession attract fresh graduates. For example, KPMG UK recently revamped its graduate program, focusing on offering a wider range of digital experiences and hands-on training in emerging technologies.
- Outsourcing and Automation
For many firms, adopting automation technologies for repetitive tasks has become a necessity. Tools such as Xero and Sage are helping firms manage client accounts more efficiently, enabling them to focus their limited workforce on more complex, value-driven tasks.
- Government Support and Policy Changes
The UK government could play a role in alleviating the crisis by supporting immigration policies that attract foreign talent to fill the skills gap. Industry experts, including those from ICAEW (Institute of Chartered Accountants in England and Wales), are calling for an increase in skilled visas for accounting professionals, much like the digital nomad visas that countries like Portugal have implemented.
Conclusion
The UK accountancy sector is at a critical juncture. As the demand for skilled accountants continues to grow, firms must innovate by upskilling, investing in automation, and attracting younger talent to remain competitive. By addressing these challenges, the sector can adapt to the evolving demands of the global economy.