Recent research by the Financial Reporting Council (FRC) shows that a skills and talent shortage within the accounting sector is limiting business growth – particularly for smaller firms.

Being a relatively small country, with limited numbers of home-grown qualified accountants coming through, part of the solution lies in sourcing talent from other countries and taking into account the impact of artificial intelligence (AI) in the future on how small businesses can ensure they continue to grow. This highlights the importance of having a globally recognised qualification and membership in order to build and develop international talent.

The accountancy industry in the UK is facing a significant skills shortage, particularly in the areas of auditing, taxation, and advisory. In fact, recent research from the FRC revealed capacity constraints, recruitment, and retention challenges, as the main obstacles for smaller firms looking to expand in this area.

The impact of Brexit

Of course, it’s not only the accounting sector that is battling a skills shortage - it’s being felt across multiple industries. Brexit and migration have contributed significantly to this; in particular, impacting on the numbers of international students and the pipeline of talent coming through.

Student migration from the EU fell sharply in the 2021/22 academic year, the first under post-Brexit rules. There were 31,000 newly enrolled EU students, a fall of 53% compared to the previous year, according to the Migration Observatory at the University of Oxford.

Under the new laws, EU students are subject to the same rules as other international students, including the need to apply for a student visa, pay higher international fees, and cover their costs without access to government-backed loans.

What we can learn from telecoms sector 

In an increasingly global world – where remote working opens the door to not only the talent pool on your doorstep, but the talent pool globally – it would make sense to harness skilled talent from overseas; particularly when we are facing a shortage at home.

The key is doing this in a way that sits well with everybody and reduces the risk of damaging the reputation of our industry. The telecoms industry provides a great case study for us to learn from.

Outsourcing call centres to overseas hugely accelerated in the 1990s, leading to vast numbers of consumers feeling frustrated with poor service from people unfamiliar with the customer base, struggling with contextualised language and the lack of personalisation. Although this route was more cost-effective at point of purchase, it more than cost businesses in lost consumer trust due to poor service.

Equally this highlighted the skill set required to offer positive customer service and experiences, and I saw firsthand the value of engaging a professional call centre partner, who presented themselves in line with my company’s values and brand.

In a world where service expectations are high and customer loyalty is hard won, the previous trend has more latterly been reversed, aided by the adoption of technology.

The same standards need to be maintained, regardless of where your team are based. AAT does a lot of work in Botswana, helping people access skills and training. Not only does this bolster employment and help to superpower their economy, they also still meet the same rigorous standards that we expect from individuals training here in the UK.

Recognition of qualifications 

The other issue to consider when looking at drawing on international talent is whether or not qualifications hold up cross-countries and qualification content is comparable.

In a global world, it is increasingly important that qualifications are recognised across markets, so productivity and skills can seamlessly be utilised. Otherwise, we are essentially asking knowledgeable and experienced professionals to disregard the work they have put in and start again. It wastes talent and makes no sense.

The same goes for international students who choose to study in the UK. If they are educated here, but not given the opportunity to then contribute to the workforce, we are at a real risk of brain drain, where knowledge and skills that are gained here, cannot then be utilised or contribute to the economy.

Particularly for small businesses, who are most impacted by the skills shortage, and yet generate a quarter of the UK’s GDP and, over the past 25 years, are responsible for two out of every three jobs created.

The impact of AI

The rise of AI will inevitably have an impact on the way we work in the future. At the World Economic Forum in January this year, PwC UK’s chair Kevin Ellis pointed out that generative AI is able to do tasks that junior employees typically do to gain practise or experience.

In the midst of a skills shortage, the development of AI in workplaces is welcomed as it helps to plug gaps, but equally we also want human talent to still be developed.

It raises other questions too, such as – will this result in younger employees returning to the office so they can gain face-to-face experience and advance their careers, with the ‘soft’ or ‘power skills,’ which are so in demand.

Adapting to emerging tech isn’t a new thing; we’ve had similar experiences with other software developments. In the 90s we were told spreadsheets would put accountants out of jobs, but they actually just enhanced their ability to focus on the bigger picture, as did the introduction of accounting software.

Tech can be scary; it’s new and different but embraced properly it can be harnessed and empower us to develop even more impactful roles and careers.

Enabling talent – whether home-grown or from overseas – to be harnessed, is what the focus needs to be on.

Ensuring pathways are in place to help international students to not only study here but then work here, adapting to AI and how this can be best deployed to bolster the sector and develop overseas talent so it firmly matches and complements our standards will all help build a strong pipeline of future talent and ensure our sector is well equipped to help the economy thrive.

About the author

Sarah Beale is CEO at AAT (Association of Accounting Technicians