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The Ghost of Recruitment Future 

Unlike Dickens’ novel, we start with a visit from The Ghost of Recruitment Future which shows us a projection of a shortfall of 10,200 qualified accountants by 2050. The UK workforce will have a 3.1 million person deficit if skills shortages are not addressed and the accountancy sector will face 7th biggest shortfall in the UK according to a recently published study. Where accountancy is concerned some of the reasons for this shortfall could and should be addressed sooner rather than later.

The harbinger of doom indicates that a shaky future is already being cast, “if these shadows remain unaltered”. The troublesome future is already manifesting itself by increased time taken to recruit calibre candidates, and increased difficulty in attracting candidates even by the larger well resourced recruiters. While the UK seemingly comes to grips with the changing economic landscape the situation is becoming more acute. It seems markedly more acute than has been the case during past transitions from “job led” to “candidate led” markets.

In order to be able to plan for the future we need to understand how the current situation has evolved. The Ghost of Recruitment Past takes us back to two points in time, to visit the same business and its accounts function, in a period marked by the end of both the 1989 and 2008 recessions. This enables us to compare and subsequently identify the significant differences which have evolved. The sample business visited is an operational manufacturing business of c£50 million turnover and c400 employees of 25 years ago, the structure of the finance function might have appeared as follows:-

Finance Director supported by a Financial Controller. Reporting to the Financial Controller there are two qualified accountants; a Management Accountant and Financial Accountant. Reporting to each of them are up to two part qualified studiers at different levels. In their training they are seconded to various parts of the department/business in blocks of 6 month periods to learn the practicalities of everything from production of management accounts, trial balance, to assisting with analysis, forecasting and budgetary preparations, costing, variance analysis, financial and statutory reporting, tax analysis and calculations, payroll and the ledgers. The trainees would be working with and supported by a number of accounts clerks and accounts assistants on the control accounts. As a result the trainees receive a rounded experience and understanding of business and accountancy, team work, and team management. The total heads in the accounts department could be up to 20 staff.

“Spirited” back to the present, the changes are immediately visible:-

Finance Director supported by a qualified Financial Controller. Reporting to the Financial Controller may be a part qualified  accountant who is studying for qualification and is involved in only very specific routine tasks. An advanced and highly automated system now produces the accounts and is serviced by a reduced number of accounts clerks/assistant accountants keying in information to the system and managing the control accounts. It’s even possible that AP has been “off shored”. The total number of staff could be as small as 8. 

The comparison reveals three key trends that have evolved:- First;  as part of tighter budgetary controls a drive for low headcount  resulting in a department that is arguably too lean. Second; a paring down of training programmes to the minimum including reduction of training budgets, internal secondments and time for mentoring. Third; the development of computer systems that are much more sophisticated and automated. Together these trends have conspired to produce a “perfect storm” of unintended but nevertheless significant consequences that businesses are now facing and which may become even more acute.

The consequences of the three trends are worrying:- First; fewer trainees, assistants and middle tier qualified accountants means there is little succession planning. Second; with the sophisticated systems being relied on much more heavily, teams are perhaps even leaner then they should be resulting in less time available to train staff and less opportunity to learn team management skills. Third; training has been reduced and is almost limited to only financial support and exam leave.  Mentoring is minimal and secondments are rare if non-existent, resulting in a less well rounded accountant. In some cases a trainee has passed all their exams but cannot gain their letters for lack of experience.

The net overall effect is a very small pool of accountants that doesn’t support the number of recruitments in a developing economy. Further, of the insufficient candidates available for management roles two key elements come to the fore; a lack of experience in team management and analytical/commercial decision supporting. This gives rise to a significant question “Where are the commercially aware finance managers of tomorrow going to come from?”

Dickens’ story centres on Scrooge’s need for transformation in the present in order to change an uncertain future to a more secure one. Arguably, industry as a whole needs to undergo transformation for the same reason. It needs to address what seems to have been a history of underinvestment in recruitment and training, and an emphasis on creating very lean departments. Though some companies have begun to address these issues, a concerted effort by industry generally  is needed to ensure a sufficient pool of well rounded high calibre accountants to recruit from in future. Without transformation we can look forward to the predicted shortfall of 10,200 accountants by 2050, with transformation we may begin to reduce the severity of this situation.

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