by: Caseware staff
Much has been said about the accountants’ and auditors’ well-being, but the industry has yet to adopt meaningful changes to address and resolve these issues impacting practices globally. Despite these professionals’ indispensable role in ensuring financial integrity and compliance, many feel they need to be more valued. The Wall Street Journal reported that more than 300,000 accountants and auditors left their jobs in the past two years, resulting in a 17% decline. The article also revealed that despite significant salary bumps, the tedious work and daunting hours are some of the concerns that have stopped new graduates from joining practice firms as entry-level associates.
Recent reports have also highlighted the alarming trend of high turnover, often called the “churn and burn” culture. While not exclusive to the accounting and audit industries, a few firms have been in the spotlight in the last few years, negatively impacting the industry.
The Three Stressors on Accountants and Auditors
- Workload and Tight Deadlines: Accountants and auditors bear the weight of strict deadlines and heavy workloads, especially during peak seasons. They must navigate through mountains of financial data, ensuring accuracy and compliance while meeting client expectations. The constant pressure to meet deadlines can lead to burnout, negatively impacting staff well-being.
- According to the Association of Chartered Certified Accountants (ACCA), 88% of its 8,000 accounting and finance professionals surveyed wanted better work-life balance with 71% wanting more help from their organisations in managing their mental health.
- Regulatory Complexity: The accounting and audit profession is highly regulated, with regular changes in financial reporting standards and regulations. Keeping up with these changes can be overwhelming and stressful for professionals who must ensure their clients’ compliance. In the U.S., the push for expanded inspections, tougher enforcements and stricter standards by the Public Company Accounting Oversight Board (PCAOB) is aimed to reduce audit error rates and while the standards updates are seen as a way for the practice to keep up with the constantly evolving business landscape and technology and arrest the decline in audit quality,
- Client Demands: Clients in the financial sector often expect round-the-clock service and immediate responses to their inquiries. Meeting these demands can be challenging, as it disrupts work-life balance and adds another layer of stress to accountants and auditors.
The Talent Pool Conundrum
Accounting and audit firms often find themselves fishing in a shallow talent pool. The stringent educational requirements and rigorous certification processes narrow the available talent, making recruiting and retaining skilled professionals challenging.
Caseware’s State of Accounting Firms Trends Report 2022 and 2023 has highlighted these talent management challenges particularly around attracting and retaining qualified talent. The 2023 report reveals that finding the right talent is one of the top five challenges in practice management.Forty percent of the respondents said that finding and hiring the right talent is extremely challenging while 52% said it is somewhat challenging.
The Churn and Burn Approach
The “churn and burn” approach is a concerning trend that has emerged within accounting practices due to the challenge in retaining professionals. In this approach, firms find themselves in a perpetual cycle of recruiting and replacing employees who leave the organisation. This culture is driven by various factors, including the demanding nature of the profession, high stress levels, and limited opportunities for career growth and work-life balance. This approach is costly in terms of recruitment and lost institutional knowledge. The constant need to recruit, onboard, and train new employees consumes substantial financial and human resources.
Solutions for a More Sustainable Practice
Addressing the challenges accounting and audit firms face in 2023 requires a multifaceted approach that prioritises staff well-being and retention.
- Cultural Transformation: Firms must actively work on shifting their conservative cultures towards more inclusive, flexible, and innovative environments. Encouraging open communication, mentorship programs, and acknowledging the value of diverse perspectives can help in this transformation.
- Flexible Work Arrangements: The conservative nature of the accounting profession, characterised by its traditional work practices and conservative culture, has long been resistant to change. However, in the contemporary business landscape, it is becoming increasingly apparent that firms must adapt and embrace more flexible work arrangements to remain competitive and meet the evolving needs and expectations of their staff.
One significant stride toward modernising work practices is the adoption of flexible work arrangements, including remote work options. This shift has been facilitated by various factors, including advancements in technology, the blurring lines of workspaces and locations and the recognition that employee wellbeing and work-life balance are pivotal for attracting and retaining top talent.
3. Leverage Technology: The integration of technology has become essential for maintaining competitiveness, efficiency, and the overall wellbeing of professionals in these fields.
Embracing technology offers several benefits to accountants and auditors, and it plays a pivotal role in alleviating the workload burden that often accompanies these professions:
- Streamlining Repetitive Tasks: One of the most significant advantages of technology is its ability to automate repetitive and time-consuming tasks. Many routine financial processes, such as data entry, transaction categorization, and reconciliation, can be automated with the help of specialised software and AI-driven tools.
- Efficient Data Analysis: Advanced data analytics tools empower professionals to extract valuable insights from large datasets swiftly. These tools can identify trends, anomalies, and potential risks that might be difficult to discern through manual analysis. By automating data analysis, accountants and auditors can make more informed decisions and offer strategic guidance to clients.
- Enhanced Compliance: Technology plays a crucial role in ensuring regulatory compliance. Automation can help firms stay up-to-date with evolving financial reporting standards and regulations. This reduces the compliance burden on professionals and minimises the risk of errors and non-compliance issues.
- Client Collaboration: Collaborative technologies and cloud-based platforms facilitate seamless communication and collaboration between firms and their clients. This not only enhances client relationships but also streamlines document sharing, data access, and project management, further reducing the administrative workload.
- Focus on Higher-Value Activities: Perhaps the most significant advantage of leveraging technology is that it frees up professionals’ time, allowing them to focus on higher-value activities. Accountants and auditors can dedicate more of their energy and expertise to strategic advisory services, client relationships, and value-added tasks that require critical thinking and analysis.