Accounting skills crisis here to stay, recruiter warns

The war for talent will throw up challenges for the accounting and finance industry and impact the ability of firms to grow, according to a prominent recruitment agency.

Robert Half director Nicole Gorton said while salaries for accountant roles are starting to stabilise, there is still intense competition for finance and accounting talent.

“Within the finance and accounting and finance space, we still don’t have enough people to backfill the volume of roles required,” she stated.

The Robert Half 2023 Salary Guide for finance and accounting revealed two-thirds of chief financial officers were more concerned about losing their finance employees in 2023 compared to 2022.

The guide also indicated that 87 per cent of CFOs felt that competition for qualified financial talent had increased from 12 months ago.

Ms Gorton estimates that around half of all accounting professionals are planning to change roles this year.

“Around 50 per cent of people are looking to make a move because they’re looking for a different work environment or for other reasons and the other 50 per cent have decided they don’t want to take the risk of changing roles,” she said at the Accountex conference in Sydney.

“We usually don’t see that kind of dichotomy in the hiring economy.”

Financial accountants are one of the most in demand roles at the moment, she said, particularly those with great soft skills and strong business acumen.

In the space of 12 months, the average salary for a financial accountant has jumped from $95,000 last year up to $125,000 this year, she stated.

“Other in demand roles include finance managers, CFOs, finance directors, financial controllers,” she added.

Ms Gorton noted the lift in salaries hasn’t been quite as significant for the more transactional type accounting roles, but are still rising.

Across the 2022 calendar year, salaries for finance and accounting professionals at the national level rose by around 8 per cent.

This is slightly above CPI figure for the 12 months to the December 2022 quarter, which was 7.8 per cent.

Ms Gorton said there has been a significant shift in the hiring economy since the pandemic which has forced firms to get creative with their retention strategies.

Salary benchmarking is critical for accounting firms at the moment, she advised, as companies risk losing employees if they’re currently being paid less than market rate.

“Companies should be having robust salary reviews with their staff, understanding the appetite from employees to be paid fairly,” she said.

Pricing Insight founder and director Ron Wood agreed that employers may want to consider being more generous with pay rises in the current environment, given the potential costs involved in having to replace staff that have left.

Mr Wood explained that if an employee is planning to leave a business, there may be a level of disengagement before they actually resign resulting in lost productivity.

“You then have to think about hiring a new worker and you may have a recruitment fee of $20,000 for a $111,000 salary. Once that new person has been hired they won’t be as productive as the previous incumbent on the first day, it’ll take a month or two for their productivity to kick in,” he said, speaking at the same event. 

“So you’re looking at around $30,000 to $40,000 in productivity decline from losing someone and potentially when you back to market you’ll have to offer a higher salary.

“In this particular market, just by using logic and opportunity cost analysis, you can see that one of the strategies you want to do is to retain staff and that means being a little bit more generous than just offering a 4 per cent pay increase.”

However, Ms Gorton said firms shouldn’t look at salary in isolation in terms of attracting or retaining staff.

“There are other benefits that can be offered such as having a mentor, education and upskilling and even a hybrid work style can still be seen as a benefit,” she explained.

Some firms are also offering employees a higher level of flexibility, she added.

“Flexibility is different to work style. Flexibility is giving [employees] the opportunity to say ‘Hey, I need to start late on a Thursday’ or ‘I’ve got this course that I want to do and it’s not necessarily related to my role’ or ‘I need to care for an elderly relative on a certain day’,” she explained.

In the past couple of years, Ms Gorton noted there has also been a power shift in the interview process, with the job candidates asking more questions than ever before.

This means that accounting firms need to ensure they have a strong employee value proposition, she stressed.

“Previously when an organisation was hiring, the power of the process was with the interviewer. What we’re seeing now is jobseekers interviewing the organisation. They’re the ones looking the [the firm up] on LinkedIn, doing the Googling and looking at the company’s performance, its assets and anything else they can access,” she stated.

“They are also the ones asking the questions because they are making a judgement about that company, more than they have ever done.”