Replacing Accountants Is More Expensive Than You Expect
In a recent post, we explored the challenges of recruiting and retaining accounting talent right now. Demand for qualified accountants is extremely high at the same time that supply is low and attitudes about company loyalty are changing. As a result, it’s almost certain that finance departments will contend with losses in coming years.
Acknowledging this likelihood is important, but it’s more important to understand how job losses affect a company. It’s easy to think of talent as replaceable, even in tight labor markets. The reality, however, is that attracting qualified accounting professionals is incredibly expensive, and the costs involve more than just compensation. Consider these examples:
Paying to Find Unicorns
Unemployment for accountants has consistently been below 2%, so it’s not surprising that over 75% of financial recruiters report that finding talent is their top challenge. Relying on an insufficient number of accountants creates financial risks, yet finding a qualified replacement can take many months. In response, some companies have turned to headhunters to find talent. Professional recruiters may speed up the search, but only in exchange for a hefty finder’s fee.
Committing to Competitive Compensation
Given the conditions in the current labor market, accountants can be highly selective about where they work. Many will migrate to whatever company offers the highest compensation, including salary, benefits, and perks. The average salary for a senior finance manager rose by $2,000 from 2018-2019, and the jump was still $1,000 for early-career accountants. In many cases, companies will have to pay their new accountant more than the previous one and increase the figure annually. Simply put, an in-house accountant team has never been more expensive.
Investing in Onboarding and Training
Considering the cost of recruiting, companies need anyone they hire to thrive in their new role. And that requires an extensive onboarding and training effort. Onboarding introduces accountants to the company, the team, the culture, and day-to-day flow, whereas training verses them in the exact details of their duties. Both are mandatory, yet both can be expensive and time-consuming. Making that investment is important, however, because in tight labor markets companies may have to hire accountants with minimal experience or incomplete skills sets. One survey of Australian financial officers even showed that almost 90% struggle to find accountants with the right financial or technical skills. Those skills can be learned through training, but they’re not gained quickly or cheaply.
When it’s expensive to hire accountants, there are only two options. The first is to get great at retention, which won’t be easy considering that everyone is eager to hire (or poach) good talent. The second is to consider alternatives to traditional hiring practices, namely outsourcing.
Outsourced accounting teams are composed of experienced and specialized accountants who are available on demand. Companies can rely on these teams to complete a one-time project, an ongoing workflow, or a major accounting responsibility. In that way, outsourcing empowers companies to fulfill their financial needs and supplement their accounting talent without facing the challenges of recruiting.