Despite broader economic pressures, the practice market remains resilient and continue to face unique challenges in recruitment, retention, and skills development.
Demand for talent despite economic pressures
The accountancy and finance practice market remains one of the most candidate-driven sectors, with demand for talent significantly outpacing supply. Unlike other industries experiencing economic slowdowns or hiring freezes, the demand for skilled professionals in practice is as robust as ever.
Businesses must resist the temptation to assume that broader economic downturns will lead to an increase in candidate availability. Instead, firms must double down on proactive recruitment strategies and innovative approaches to attract and retain talent.
Without meaningful action, the gap between available roles and qualified personnel will only widen.
Addressing the skills gap: sponsorship and upskilling
One of the most pressing challenges for the practice sector is the growing skills gap. This is exacerbated by two trends: the scarcity of junior talent and the evolving demands of the industry, particularly around digital transformation due to AI.
Practices are increasingly reliant on mid-level hires who lack foundational knowledge gained through junior roles – a shortfall that will have long-term implications.
To address these issues, firms should explore talent pools outside their traditional recruiting boundaries. For example, sponsorship visas could unlock a wealth of untapped talent from regions like Asia and South Africa, where finance professionals often possess skills aligned with UK requirements.
While sponsorship may seem expensive or complex, firms that take the initiative to explore these options will gain a competitive edge.
Additionally, investing in upskilling programmes can help mitigate the skills gap. Firms must prioritise nurturing talent through structured training, apprenticeships, and financial support for professional qualifications. By developing talent internally, businesses can build a pipeline of skilled professionals ready to step into critical roles in the years to come.
The impact of digital transformation on talent demand
The digitisation of tax and the growing adoption of cloud-based accounting systems have fundamentally reshaped the skill sets required in the practice sector. Roles now demand not just technical accounting expertise, but also proficiency in digital tools and systems.
Younger professionals often possess these system-savvy skills but may lack a foundational understanding of traditional accounting practices.
To navigate this dual challenge, firms must create comprehensive training plans for individuals that blend technical systems knowledge with traditional accounting principles. This approach will ensure that new hires have the well-rounded capabilities needed to succeed moving forward.
Retention: a key to long-term stability
With candidates in high demand, firms must take active steps to keep their best talent. Regular pay reviews are a simple yet effective strategy. Incremental annual increases of between three and four per cent can prevent employees from seeking large pay jumps elsewhere, which often cost firms significantly more in counteroffers.
Beyond pay, firms must create environments where employees feel valued and supported. Flexible working arrangements remain a non-negotiable expectation for many professionals. While fully remote roles are declining, hybrid working is now the norm.
Firms must ensure their policies strike the right balance between flexibility and collaboration. For younger employees, in-office time can be used for mentorship and skills development. However, instead of mandating office attendance, firms should focus on making the workplace a desirable destination.
This requires genuine cultural improvements, not superficial perks like beer fridges or pet-friendly policies. A strong company culture that prioritises inclusivity, professional development, and employee wellbeing will go much further in retaining talent.
Diversity and inclusion: a business imperative
The lack of diversity in smaller firms remains a significant issue within the sector. Practices outside the top 50 often reflect homogenous hiring patterns, which not only hinder inclusivity but also deter younger professionals and people from a more diverse range of backgrounds who prioritise workplace culture and equality.
To attract and retain the next generation of talent, practices must commit to building diverse and inclusive teams. This means actively addressing biases in hiring, creating mentorship programmes for underrepresented groups, and promoting a culture that values different perspectives.
Diversity is no longer a ‘nice-to-have’ but a necessity for firms seeking to remain competitive in the modern workplace.
Shifting priorities in candidate expectations
As the workforce evolves, so do expectations from employees. Entry- and mid-level professionals continue to prioritise study support, both financial and time-based, but they also expect more from employers in terms of benefits, career development, and workplace culture.
Job security remains a key concern, but the enduring demand for accountancy services provides reassurance. Even as the nature of work shifts, practices will remain essential in providing advisory and assurance services.
Firms that align their offerings with these emerging priorities will position themselves as employers of choice.
Preparing for the future
The challenges facing the practice sector are significant, but they are not insurmountable. Firms that take proactive steps to address talent shortages, embrace diversity, and invest in upskilling will be well-positioned to thrive in 2025 and beyond.
The key is to remain adaptable and forward-thinking, ensuring that both the workforce and workplace are prepared for the demands of the industry.
Download your copy of the Reed accountancy and finance practice salary guide 2025 now.
