The accountancy industry is currently going through immense challenges, with the economic slowdown and a scarcity of talent putting considerable strain on firms. More organisations are being forced to be even more resourceful, with industry leaders such as EY and KPMG already reducing their workforce due to slowing client demand.

Hiring has also become exceptionally difficult with a smaller talent pool, increasing mergers and acquisitions, and a trend of accountants venturing into independent practices. To navigate these challenges and future-proof themselves, firms must focus on internal development and ensure existing hires possess a well-rounded skill set that encompasses both technical expertise and essential soft skills.

Changing landscape of accountancy skills

Hard skills, such as proficiency in accounting software, data analysis and financial reporting, are the foundation of an accountant's capabilities. These skills are essential for performing day-to-day tasks with accuracy and precision. However, historically, the accounting industry has faced a significant hurdle in its reluctance to embrace new technologies, leading to a deficiency in hard skills among many firms. This has resulted in experienced accountants struggling to adapt and keep pace with emerging technologies.

With the entrance of younger, tech-savvy professionals into the industry, this challenge is gradually being overcome. But without complementary soft skills, even the most technically skilled professionals may struggle to excel.

Soft skills encompass communication, teamwork, problem-solving, adaptability and leadership abilities. These skills enable accountants to collaborate with colleagues more effectively, clearly convey information to clients, resolve complex issues, navigate changing circumstances and take on leadership responsibilities.

However, the Covid-19 lockdowns and the emergence of the digital generation have limited opportunities for young professionals to cultivate these softer skills. Unlike their predecessors, who were willing to invest several years in mastering the profession at lower levels and gaining a deep understanding of the industry and clients, younger accountants seek faster career progression.

Their perspective on the profession overall also differs, with expectations of rapid upward mobility, greater responsibility, higher compensation and technology assistance in their work. This poses a risk for firms, as they may end up with individuals in senior positions who have the technological expertise to drive productivity but lack the essential people skills to retain clients.

Furthermore, the integration of automation in finance functions marks a significant transformation in the accounting job landscape. Routine and repetitive tasks that once consumed the time of junior accountants are now being automated, allowing them to focus on more strategic and value-added activities.

The evolving realm of finance envisions accountants as strategic partners who utilise their expertise to provide actionable insights that can drive significant business transformations. Consequently, it is more crucial than ever for younger generations to move beyond numbers and fully immerse themselves in working with clients to build confidence and foster strong relationships.

Taking proactive steps to overcome the challenges

Currently, professional bodies like ICAEW and ACCA do not do enough to support students in developing these essential skills. Therefore, accounting firms must find a way to strike a balance between enhancing the skill sets of experienced professionals and developing the softer skills of newer hires. There are specific steps they can take to overcome the challenges:

Emphasise ongoing learning: accountants should prioritise continual education and skills development. By keeping up to date with changing industry standards and technological advancements, they can broaden their hard skills and add value to their roles. Firms should encourage employees to attend courses or workshops on soft skills to help them develop key attributes such as communication, leadership, and problem-solving.

Foster teamwork: accountants must develop a collaborative mindset that empowers them to work effectively with others. A culture of collaboration encourages the transfer of expertise and knowledge, leading to better client outcomes. Collaborating and discussing complex issues with colleagues also allows accountants to develop soft skills like communication and teamwork.

Build strong relationships: accountants should adopt active listening skills to understand their clients’ pain points and concerns, which can then be addressed with technical expertise. Understanding the client's needs not only strengthens the relationship but also drives revenue opportunities.

Leverage technology: while technical skills remain crucial, harnessing technology can help accountants emphasise their soft skills. Automating routine tasks and outsourcing certain functions can free up time, enabling accountants to devote more effort to building relationships and developing soft skills.

Offer two-way mentorship: providing mentorship opportunities from more experienced colleagues can help foster a positive environment of learning and collaboration. A mentor can provide guidance on both hard and soft skills, offer feedback on performance, share industry insights and motivate career development. On the other hand, younger professionals with expertise in data analytics and tools like artificial intelligence and machine learning can help more mature accountants get to grips with new innovation.

While the bottom-line impact of recurring compliance work, which heavily relies on hard skills, should be understood, there needs to be a cultural shift within firms to recognise the revenue opportunities that soft skills can unlock.

By investing in current employees' growth and professional development, firms can leverage the knowledge and potential within their own ranks. Encouraging continuous learning and upskilling can help bridge any skill gaps and keep the workforce adaptable to changing market demands. In return, this allows accountants to evolve into true business partners for their clients and provide more value.

About the author

Steven Cox is director of business intelligence at IRIS Software Group