In an era where technology is at the forefront of most industries, accounting firms are not exempt from the transformative wave. However, even with advanced technological tools at their disposal, these firms face a persistent challenge: a shortage of skilled accountants.
This dilemma raises a crucial question: Does resorting to outsourcing offshore comprehensively address this issue, or is it just a partial solution?
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The accountant shortage dilemma
The accounting industry, despite its rapid digitalisation and adoption of tech solutions, continues to grapple with a significant talent shortage. This scarcity is not just in numbers but also in specific skills and expertise levels.
The scarcity of accountants is becoming increasingly pronounced, primarily due to fewer graduates entering the accounting field. Additionally, there’s been a noticeable decline in the number of people studying accounting, contributing to the shortage of professionals in the industry.
The reliance on technology, while streamlining certain processes, hasn’t resolved the core issue of staffing, especially in more strategic and complex accounting roles.
The volume of compliance work has now increased more than ever before, owing to the ever-evolving and complex compliance landscape. Currently, 90% of our focus is on compliance, leading to a scale-down in advisory work.
In response to rising demand, there has been an increase in the number of accounting practices. However, this growth conflicts with a sharp decline in the number of available accountants.
If this trend continues for the next 10 to 20 years, or longer, it raises the question of who will handle the accounting work. Currently, the heavy workload and talent shortage have been already impacting Australian accounting practices.
Read more: Australian Skills Shortage: How Accounting Firms Responded
Outsourcing as a response to the shortage
Numerous firms are now turning to offshore staffing and remote teams, where individuals are willing to undertake the tasks that the new generation in Australia is reluctant to pursue. This strategy addresses the gap in workforce preferences and ensures that essential accounting functions continue to be performed efficiently.
By tapping into a global talent pool, particularly in countries with lower labour costs, firms can manage compliance work and routine accounting tasks more efficiently.
Outsourcing offers a quick fix to the immediate problem of understaffing, enabling firms to handle increased workloads without a proportional increase in local hiring.
A recent discussion on the Accountants Daily podcast shed light on this trend of outsourcing. The conversation highlighted how while outsourcing is beneficial for handling a large volume of work, it has its limitations.
The podcast underscored the necessity of having senior, experienced accountants who understand the nuances of the local market and can provide strategic guidance – roles that outsourced staff might not fulfil effectively.
Where to look for senior accountants
An interesting perspective emerged on offshore outsourcing. While the emphasis is often on filling junior or mid-level roles through offshore services, selecting an offshore provider with access to experienced senior accountants emerges as a strategic solution. This approach can bridge the gap, especially when finding senior local talent proves challenging.
By choosing an offshore partner that includes senior professionals in their teams, firms can access the necessary high-level expertise and experience. Such offshore senior accountants are capable of handling intricate accounting tasks, providing insights and skills akin to local senior professionals.
This approach, therefore, presents a viable solution for firms facing challenges in recruiting senior local accountants, ensuring comprehensive accounting services without the constraint of geographical boundaries.
Read more: The Essential Guide to Offshore Accounting for Australian Accounting Firms
The bottom line
As the accounting industry stands at the crossroads of technological advancement and a growing talent gap, firms are compelled to rethink their strategies to stay competitive and efficient.
The increasing compliance workload, coupled with the growing number of accounting practices, contrasts sharply with the declining pool of accountants. This discrepancy has led many firms to turn to offshore outsourcing, particularly for routine tasks. While this approach helps manage immediate staffing needs, it falls short in providing the high-level expertise that senior local accountants offer.
The solution may lie in a nuanced approach to outsourcing, where firms also access experienced senior accountants offshore. This strategy can bridge the local talent gap, ensuring comprehensive services without geographical constraints.
As the industry continues to navigate this talent shortage, a balanced approach integrating technology, global resources, and local expertise will be crucial for sustainable growth and adaptability in the accounting sector.
If you are seeking accounting outsourcing advice, then drop Odyssey a line to chat. And don’t hesitate to consult us for any of your concerns.
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