How Technology Can Help Accounting Firms with Staffing Issues
Updated: Aug 30, 2022
In virtually every industry right now, companies are struggling with a talent crisis. The reality of “The Great Resignation” is causing staffing issues felt in accounting firms both large and small. While rapid advances in technology over the last 18 months enabled firms to survive a pandemic and remote work, finding highly skilled talent that can utilize this technology has grown exponentially more difficult in what was already a tight labor market pre-COVID 19 pandemic.
The digital revolution has provided growth opportunities, but it has also created a dilemma for many hiring managers and HR departments, as well as CIOs and CEOs. Companies now need to rethink their hiring, retention, and growth strategies and how technology solutions fit into the bigger picture.
This article will address the talent crisis, how technology might be able to fill the gaps it created, and what accounting and consulting firms can do now to protect the future of their business.
The Talent Crisis
For many tech sceptics, the digital age would surely bring about robots and AI that would take all the human jobs. The reality, however, is that there aren’t enough humans to fill all jobs. According to a Korn Ferry study, the global talent shortage will reach more than 85 million people by the end of the decade, resulting in $8.5 TRILLION in unrealized revenues.
Where have all the workers gone? For starters, the baby boomer generation, flush with contributions to professional services, is retiring in large waves with the majority planning to be out of the workforce by 2030. Interest in accounting jobs has waned in recent years, making the competition to attract talent incredibly fierce. Many firms lose top team members to other firms or other careers able to offer better work-life balance, better benefits, and better skill development. More recently, the COVID-19 pandemic and the emergence of remote work has given opportunities for employees to pick up and join other firms that are even outside of their current city.
Companies in all sectors must get creative in developing their long-term human capital strategy. Some companies have even turned to M&A for talent acquisition instead of its historic use for growing their business or increasing their competitive advantage. At Finagraph, our M&A firm clients are seeing an explosion of business opportunities but not all are able to seize them due to their own staffing shortages.
To fill this void, accounting and consulting firms can turn to technology to both fill the gaps left by a shrinking workforce and improve their retention rates with reduced burnout.
How Can Technology Be a Solution?
When it comes to staffing and new technology, there’s a bit of a chicken and egg paradox. Technology can help fill gaps created by reduced headcount, but deploying new technology requires a suitable workforce. A report from Gartner found that the talent shortage was the biggest barrier to the adoption of 64% of emerging technologies. In 2020, that number was just 4%. The lack of talent outranked implementation cost and security risks on the list of barriers.
For accounting firms, this means that an effective tech strategy would leverage intelligent technology that can solve increasingly difficult challenges without requiring a complicated implementation. The tech stack must directly relate to the human capital available. And while technology may be advancing at a rapid pace and the workforce is shrinking at an equally blinding rate, there are two areas firms can focus on to have the most impact in aligning the two:
Technology that helps reduce burnout, improving the work experience of existing teams and increasing retention.
Technology that enables teams to do more without requiring complex implementation.
Technology for Talent Retention
Poaching talent has become the norm, causing many companies to rethink how they approach the employee experience. Recent studies show that a highly engaged employee is 87% less likely to leave their current role. Treating the employee experience more like the customer experience can have a huge impact on a company’s retention rate.
For accounting and consulting firms, this means addressing the problem of burnout, especially for their analysts who historically burn the midnight oil to meet stressful deadlines. Firms wanting to retain their top talent should prioritize keeping these analysts engaged and satisfied.
Time-consuming, menial, repetitive tasks are major contributing factors to analyst burnout. Things like manual data entry and manipulation can lead to long hours, late nights, and weekend work. To reduce this retention threat, focus on implementing easy technology like Strongbox that can generate a ready-to-use Excel workbook directly from a client’s accounting software without requiring an analyst to reformat an extensive amount of data.
This type of technology not only reduces the amount of required time but can also drive retention by empowering employees to transition from menial tasks to more sophisticated, meaningful work that engages them.
Technology to Fill the Gaps Caused by Staffing Issues
How can a firm grow when team utilization is already at (or above) 100% and another analyst just put in their notice? Automation. Automation technology reduces the need for human intervention in your processes. A report from McKinsey & Company found that automation could free up to 30% of an employee’s time that can then be allocated to new work, making automation a powerful tool in filling talent voids.
Automation can be incredibly complex and expensive, but automation also exists at a smaller, more manageable scale that makes it easy to adopt. Firms who perform financial due diligence on M&A transactions see technology like automation as the future. In a report from West Monroe, 68% of private equity firms surveyed said they will use more technology and tools (vs people) to get diligence done.
One area in the diligence process where automation and technology can significantly improve the standard process is in the gathering of needed data. Analysts might spend weeks going back and forth with the target company to get the list of required documents needed to complete the deal.
However, Strongbox’s technology connects the analyst with the target company’s accounting software and automatically pulls all the needed information, using machine learning and smart technology, to normalize, clean, and validate the information. What would take weeks without technology can now be done in minutes. Firms can take on more deals with their existing staff.
The Future of Work
Technology alone cannot solve the talent crisis that accounting and consulting firms currently face. But, when approached holistically, aligning the right technology with your team can result in a more engaged staff, more likely to stay with the firm, that can tackle more meaningful work at a greater volume.
Firms can seize the growth opportunity the current market presents without being encumbered by a lack of skilled talent. How will your firm use technology to tackle staffing shortages? Contact our team of technology experts to see how Strongbox can help engage your team, increase your project volume, and expand in the time of a talent shortage.