It is without any doubt that the accounting industry in the UK is facing a skills shortage. According to Broadbean statistics, the industry experienced a 36% drop in the number of accounting job applicants between 2021 and 2022. It is predicted that this percentage is expected to rise due to factors like inflation and increased cost of living in the United Kingdom. Other factors that will greatly drive this shortage in the coming future include,
1. Skills shortage all over services sector.
Reports have it that the demand for blue collar jobs has been dropping at a sharp rate. Many professionals prefer going independent and starting their firms or not looking for normal employment. This shortage of skillsets pushes companies to reimagine their hiring terms and process. For example, accounting firms that could turn away work can today outsource the compliance work @ 50% of their in-house cost. This can help to retain the client with cost savings & potential for earnings growth in future.
2. Migrant visa issues are not being sorted out.
One of the ways that any country can deal with the shortage of skills is by importing the skill. However, the issue associated with migrant visas is endless. This slows down the process and even discourages interested candidates that have the right skills and knowledge. A lack of workers does not mean that a company shuts down in the UK especially if it can outsource the required services.
3. Impact of MTD for ITSA on market.
The MTD for ITSA takes full effect in 2024. By introducing the digital tax, taxpayers will be reporting quarterly to HMRC. This would result in further increase of compliance work. The only option to overcome this would be to outsource.
4. Robotic process automation & AI
Technology has made a significant impact across all industries. Services like bookkeeping can be easily automated. With automation threatening the future of accountants, many of them are interested in alternative ways of making a living. Robotic processes will replace human labor simply because they are cheap and consistent considering that all factors remain the same.
What happens after 7-10 years in accounting?
Automation is going to take over to ease some of the burden of compliance, but by how much is still suspect and not yet determined. Ever since Covid hit, we have learned to expect anything. However, accounting may fail to reach full automation anytime soon due to individual nature of every client. Even if this happens, outsourcing compliance remains the best bet for accountants in future.
Wrap up
Getting quality accounting services or workforce is going to be difficult in the future. It does however not mean that companies will close down. Currently, many companies in the UK are already outsourcing their accounting needs as the weight of manpower shortage gets heavier. At Sapphire, we are always happy to take care of your accounting needs in the UK and help you make life much easier. While it is predicted that automation will do away with human labor in the accounting industry, it may take a while before machines can perfectly solve accounting problems without human involvement.
