I regularly hear from accounting firm owners and managers of the difficulty of finding and retaining high quality qualified accountants. And in a recent global survey completed by IFAC, this challenge was identified by a significant percentage of firms as being amongst the biggest challenges they face.
I think there are some ways to address this issue but that is for discussion another time. What I have been thinking about is the potential impact the offshoring of services may have longer term on the pool of smart, experienced accountants in Australia. And that impact is not positive.
Historically the majority of firms would hire graduates or undergraduates and train them. This “grow our own” philosophy has been successful in firms of all sizes. For example I know a few senior partners at PwC who joined straight out of school when I was there. I also know partners in small firms who have only worked at that firm. Even if these accountants don’t stay in the same firm they have been developed by that firm and then found work in another (or in commerce).
I don’t have any hard data on this next statement but it seems to me that the level of graduate and undergraduate accountants into many firms has slowed or dried up. One reason for this is that many firms are using offshore accountants to do the work that these people would previously have done. In some cases firms have reported going offshore because they could not find the right people locally.
Work going offshore is an example of a global phenomenon made possible by advances in technology – anything that can be digitised will gravitate towards being done by the lowest cost resources that can deliver an acceptable quality. In the accounting profession those resources are primarily found in India and the Philippines, with some in Sri Lanka, Vietnam and Malaysia.
When I did a study tour in the Philippines in 2013 there were a relatively small number of Australian accounting firms using offshore resources. Again I don’t have any hard data but my belief is that this has exploded in the time since. Witness the creation of an industry in its own right to provide offshore accountants to Australian firms.
So here’s my point. If we are not hiring and training nearly as many graduate and undergraduate accountants in Australian firms where will all the good quality experienced accountants come from? I don’t think I have a good answer to that question right now but it seems to me we are going to have to think differently. And it seems highly possible that there will indeed be a massive shortage of really good qualified accountants. I should stress that I am not criticising the use of offshoring, quite the contrary, but are there some perhaps unintended consequences to be aware of?
What do you think? I’d love to hear your views on this.