Australian accounting firms have started to realise the impractical nature of raising pay to hire and retain staff. First, it is not financially beneficial, especially for mid-tier and small firms. When considering the hourly charge rate and the revenue generated, firms have begun to see that it is not profitable when paying a junior staff as high as $85k. Second, there is no guarantee that staff stay with higher pay. The majority would still be drawn to firms that offer even higher pay and more benefits.
Hence, many accounting firm owners have started turning down candidates/ potential staff who demand for big pay. And in the attempt to ensure the work is completed and client deadlines are met, firm owners (and leaders) are made to choose between having staff work overtime and doing the low-level work themselves.
The latter seems to be the most popular option right now as firm owners understand the risk of overworking. It is said that leaders (from top level management to managers) at understaffed accounting firms have been helping out with low-level work like preparing tax returns and financial statements instead of focusing on winning new clients with premium advisory services.
This creates several issues:
- Senior staff being paid $120k to $150k per year are doing the work which could easily be done by junior accountants.
- It’s not their (managers and senior managers) preference to do this type of work. In longer terms, this might translate to high turnover rate.
- The opportunity cost is huge. Instead of focusing on business development and growing advisory services, all the time is now spent on doing compliance work.
During times like this, outsourcing becomes more appealing to many accounting firm owners. Without having to jeopardise profit, firms get immediate access to help at a more reasonable cost. Furthermore, when working with an experienced outsourcing provider, accounting firms don’t have to spend more (money and time) on training. Upon agreement, outsourcing staff can start working right away.
If you’d like to talk more about how Odyssey can assist your firm, drop us a line.