Outsourcing & Lower Graduate Intakes May Hit Your Future Staffing Structure Hard

Outsourcing & Lower Graduate Intakes May Hit Your Future Staffing Structure Hard
There are a couple of different factors in play when we think about outsourcing. The reduced number of graduates being employed, the impact or potential impact of SBR on the profession, as well as the general commoditisation of compliance services and the impact this is having on fee pressure.

I recall an interesting discussion that I had with a practitioner a year ago about the requirement of firms to move towards the provision of more advice based, higher value work which could potentially see less of a demand for undergraduate and graduate personnel. The thought was that firms are going to require more skilled personnel with better communications skills from the outset of employment rather than having to train people up. This has a potential benefit for firms that always found it difficult to source and retain such personnel. However, we may also find a declining enrolment rate of those choosing to study accounting and accounting related courses if the demand was to decline and positions become scarce.

I read an interesting piece recently on an interview with a practitioner from a mid-tier firm. He spoke about the opportunities for graduates and other entry-level personnel within firms declining as more firms outsource to help contain costs. He also highlighted the potential difficulties around training graduates but suggested that outsourcing will continue if firms wish to compete and not be priced out of the marketplace.

Another trend that we have witnessed in the past, particularly amongst the larger firms, is a reduction in the number of graduates firms were recruiting each year. Others within the professional also followed suit. Yet, for smaller firms this appeared to be a bonus; to a certain degree they had an increased ability to attract better qualified staff at this level. But just ask some of those firms who are now feeling the pinch from not having personnel with 3 or 4 years of skills and experience that they would have if graduate numbers hadn’t been reduced.

However, an area that doesn’t seem to be voiced very much is the impact on the profession of decreasing graduate numbers. If we reduce the number of graduates and undergraduates that are initially trained and employed, regardless of the reasoning, in the not too distant future this will impact upon the number of suitably qualified mid seniority personnel.

A little further down the line, we will have less senior personnel with appropriate qualifications and experience which, in time, will ultimately flow onto succession. In short, by implementing approaches that are financial beneficial now, we could dramatically hinder the availability of senior personnel and practitioners in years to come!

Just a little something to keep in mind as we plan for the future of our firms.