How can offshoring resolve an employment shortage in accounting industry
In the accounting industry there is a big elephant in the room, which is that there is an increasing shortage of young accountants, while the demand for accounting and financial services are increasing year by year.
According to the Irish Times (2020) there is an alarming shortage of accountants and financial advisors in Ireland, they need at least 15,000 trainee accountants to fill the gap. The shortage of accountants is much felt, they currently have approximately 5,000 CPAs advising more than 100,000 small and medium sized businesses. This would be detrimental to the health of the accountants and their quality of work. Meanwhile in Australia there is an increasing demand for accountants and financial advisors, especially during the recession. Many business owners and entrepreneurs need financial experts to help them navigate during these dark times. Now, many firms are fast-tracking their accelerations for global growth and expansion. This increase created the demand beyond traditional accounting services, and an increasing need for tax consulting and compliance, also property advisory and cybersecurity consulting. In the United States, the baby boomer generation, who make up the majority of the accounting workforce are slowly retiring and with them the specialized knowledge and talent that they have acquired over the years. According to the American Institute of Certified Public Accountants it estimates that 75% of all accountants will eventually retire within the next 15 years. Meanwhile the succeeding generation who are entering the workforce are seeking flexible and meaningful careers. Which caused the drop of accounting graduates and trainees, over the past years. These traits are not usually associated or linked with accounting. Many thinks accounting is a boring and rigid profession. There should be a fresh take on the value of accounting work.
Companies facing the shortages are able to cope with the problem by hiring non-accounting graduates. These non-accounting graduates comprise 31% of all new graduate hires. Their training focused on candidate’s proficiencies in technology and hoped to translate it to the accounting environment. That is why many accounting firms are investing heavily on accounting technology in order to increase accounting automation and to get real time information. Also , it will be easier to train non-accounting graduates. Another way accounting firms cope with the shortages is through offering remote work. While the intention is to provide incentives and better working conditions to attract new talent, it also has complications. Among remote employees, one issue is Jurisdictional. Which countries will have jurisdiction over disputes and which country’s law will apply to disputes. A foreign company will not be fully aware of the laws, regulation and tax compliances of the remote employee’s country. This will put both parties in a vulnerable position and a standoff.
UpStaff Remote helps foreign accounting firms build their offshore remote team based in the Philippines. UpStaff acts as the middleman providing a safe and legal bridge between the client company and their Filipino offshore remote team. Upstaff is registered in the Philippines, therefore if any legal issues arise, there will be measures that ensure accountability. The company also follows local labor laws that serve to protect their local employees. Upstaff can help global accounting firms with offshore staffing solutions is by facilitating the recruitment, screening, contracts, hiring, IT equipment and other HRM processes. This will give the client company more time and energy to focus on their main services that will further expand their firm. Offshoring is very cost effective and can reduce labor costs by hiring talents from other countries with more affordable rates. A foreign firm can cut back on facility costs to accommodate instead a new local hire, equipment, government mandated benefits and contributions, local taxes, insurances and in house activities just to attract and retain local talents.
Offshoring can make a company more globally competitive and grow exponentially without sacrificing the quality of work by hiring the best talents. Diversity makes a company stronger due to their different cultures and educational backgrounds, which helps decision makers and teams have a wider scope of the world. Collaboration between diverse teams will result in more innovative and resourceful decision making- which is a catalyst for the accounting firm’s business growth.