What does the talent shortage in accounting and finance mean for businesses and workers?

There’s a talent shortage in the accounting and finance sector – and it’s not going away any time soon.

According to the Financial Reporting Council's most recent trends report, the total number of accounting students in the UK and ROI has increased by 0.3% from 2020 to 2021 compared with a decrease of 2.1% between 2019 and 2020. ACCA has the largest number of students but saw a decrease in student numbers between 2020 and 2021 of 1.3%.

A shrinking intake isn’t the only factor at play, however. This shortage could be set to grow in the future, as older professionals begin to retire. The highest percentage of ACCA members (52%) are aged 45 or over.  Given that some accounting firms mandate a retirement age of 60 or 65, this suggests that a large proportion of professionals could retire within the next decade or two. 

This gap is exacerbated by a growing demand for accounting and finance professionals. Of firms that hired one or more accounting graduates in 2020, almost three-quarters expected to hire the same number or more in 2022 as they did the previous year. Our global research predicts the employment of accountants and financial analysts will grow 7% and 6% respectively over this decade.

Supply and demand

This poses a clear challenge hiring managers – and it’s good news for candidates with the right skill sets. This supply/demand gap is exerting upward pressure on salaries, as well as candidates’ expectations, but not everyone has worked this out yet. 

“Clients are offering candidates less because they think the current economy warrants it,” says Paul Newell, Operations Director at LHH Recruitment Solutions UK “Whilst the market isn’t as tight as it was last year, the reality is, there is still a real shortage of good quality accountants. Companies need to be prepared to pay those highly skilled and qualified accountant candidates the market value - if not more.”

In fact, the shakiness being felt throughout the global economy today hasn’t had a major impact on the accounting and finance sector jobs market, which remains relatively healthy. This is due in part to the fundamental importance of these roles; after all, even in downturn companies still need people to close the books and ensure compliance is taken care of.

The post-COVID aftershocks are subsiding, too; almost two-thirds of hiring managers say they are backfilling accountancy and finance roles that were lost during the pandemic.

It’s a good time to work in this sector, especially for those with the right skillsets. Candidates and employees should know their worth – and the same goes for their employers, too.

For more insights into the current trends shaping the accounting and finance sector, read our latest white paper here. Or to upload your CV and speak to a consultant about your next role, click here.