Shortage of accountancy staff hits as pay rates fall behind

The attraction and recruitment of qualified staff is a major challenge for 56% of mid-tier accountancy firms, with 40% flagging pay rates and the overall remuneration package as a significant issue when hiring. This is particularly difficult for practices competing against businesses and in-house jobs for candidates, where salaries tend to be higher and hours can be shorter, revealed the latest ICAEW research into the future of mid-tier firms.

One in four senior partners pointed to a shortage of suitable candidates, stressing that the issue extends beyond financial concerns to include the availability of talent with the necessary qualifications and skills.

The most difficult jobs to fill were assistant manager and manager roles with 70% of firms saying this was a problem. Next came senior manager jobs, with 50% putting this in their top three challenges. Only 15% of firms flagged partner recruitment as their biggest challenge.

The overwhelming reason for problems with recruitment was pay and benefit packages, with firms struggling to attract enough qualified staff. But a shortage of candidates was also problematic for 25% of firms surveyed by ICAEW.

Despite a move to hybrid, 15% of respondents said that a firm’s culture, values, work environment and work life balance were also negative factors when recruiting new staff.

Small firms were also having to bat off reservations about working for smaller practices while those in rural locations also struggled. Investment in technology, lack of opportunities for progression and negative perceptions of service lines offered by firms were also not seen as desirable by some candidates.

In terms of trainees, the general view was that there were multiple training paths for entry into the profession so attracting trainees was not a major problem but there were clear warnings about the impact of artificial intelligence (AI) and new technology on entry level jobs.

‘The [trainee] cohort will reduce as AI removes some of the tasks that our current teams do,’ warned one respondent. Another said: ‘Our vision is there will be less people, but we will require higher quality with a different training route, ie, more of a requirement to understand data, to interpret data and to have conversations with clients.’

Andrea Cook, director, specialised and lifelong learning at ICAEW, warned: ‘Technology, particularly generative AI, is beginning to reshape accountancy from within. Firms are increasingly embedding AI into their operations.

‘However, to fully realise this potential, firms must invest in supporting their teams to develop the necessary digital skills, including the ability to critically assess and question the integrity and validity of the data they use.’

Soft skills are another area where firms are having to provide additional training, particularly with younger recruits that had their education blighted by the pandemic lockdowns.

Cook added: ‘It’s clear that firms will need to provide support, particularly when it comes to the professional skills that some did not have the opportunity to develop during the pandemic.

‘Communication, collaboration and professional confidence often take root through experience, and several firms have told us they now have active programmes in place to help their cohorts strengthen these areas.’

Another threat to future training is the government’s decision to withdraw funding for Level 7 apprenticeships for over 21 year olds, which ICAEW described as ‘disappointing’. The research was conducted before the announcement.

This move will hit the accountancy sector hard, as it has increasingly relied on an apprenticeship model in recent years.

Will Holt, managing director, education and training at ICAEW, said: ‘Skills are critical to the growth prospects of businesses and economic growth, and apprenticeships help to close that skills gap and improve social mobility.’

‘Professional and business services is a key growth-driving sector in the new industrial strategy. The unintended consequences of this decision will undoubtedly impact many firms, the skills pipeline, and the health of the wider economy.’

Looking ahead, 47% of firms expected to increase their annual trainee intake in the next three years, while 36% expect numbers to remain the same. However, 17% anticipate a decrease in trainee numbers. Additionally, there has been a shift in recruitment patterns, with firms indicating they are likely to focus more on school leavers rather than graduates in the future.

Demand for highly skilled qualified accountants continues to grow, but competition for the right candidates is making it a difficult recruitment environment.

Holt said: ‘This demand means that firms must compete not only with other firms but also with the draw of roles in industry and other sectors.

‘Retaining talent has become a top priority, prompting firms to innovate in areas such as career development, lifelong learning, work-life balance, and compensation to remain competitive.

‘People are at the core of the profession, and they are navigating a new era defined by rapid technological advances and evolving operational models.

‘Firms must take a proactive stance by closely examining their talent pipelines, nurturing their workforce, and cultivating cultures that encourage growth, adaptability and ambition.’

ICAEW report, Evolution of Mid-Tier Accountancy Firms 2025