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July 6, 2016

ICAEW calls for mandatory work experience for young people

By Heather Jimaa

The lack of adequate career advice is exacerbating skills shortages and is also having a negative impact on the country’s productivity, a report by the UK Parliament’s Sub-Committee on Education, Skills and the Economy has warned.

In response to the report, Mark Protherough, executive director, learning and professional development at the Institute of Chartered Accountants in England and Wales (ICAEW) said: "Too many young people are leaving education without having had the chance to fully consider their future options or how their skills and experiences fit with opportunities in the jobs market."

He also goes on to say that more resources are vital in communicating the benefits of all career options to young people.

In the report titled: The Education Skills and the Economy report on Careers Advice, which was published yesterday, the sub-committee urges the government to incentivise schools to improve, and "downgrade those where careers provision is sub-standard."

It also maintains that policy changes and initiatives introduced in recent years have failed to make any improvemnets, and have actually been "counter-productive." The report goes on to say that new bodies recently introduced have failed to make any difference.

Neil Carmichael MP, chair of the Education Committee, said: "At a time when it is vital we equip young people with the right skills for their working lives, it’s concerning that so many are being failed by the guidance they receive."

Brexit and skills shortageThis is especially the case when it comes to the accounting proffession in the UK, as there has been a rise in the number of work permits issued to non-EU accountants.

Statistics published by SJD Accountancy show a 65.4% increase in the number of non-EU accountants since 2010. Moreover, the recent Brexit vote could further exacerbate matters, with the possibility of a change in migration laws.

According to recent research carried out by APSCo member Randstad, the UK will see a shortfall of 10,200 qualified accountants by 2050 due to many factors including skills shortages and restrictive migration policies and work permit laws.

However, a shortage in the number of accountants is not limited to the UK. Other countries such Australia and Canada also seem to be joining the bandwagon as they too are seeing a limited number of accountancy professionals to meet the burgeoning demand.

According to figures released in a 2015 Australian Government Department of Employment labour market research paper on Accountants, a quarter of surveyed accounting vacancies remained unfilled six weeks after advertising in 2015.

"There were, on average, around 22 applicants per vacancy who were known to hold relevant qualifications at the bachelor degree or higher level1, but just 2.6 per vacancy were assessed as being suitable," the report added.

Moreover, the recent spike in salaries has not helped matters, as they contribute to lower turnover figures, meaning there are fewer accountants available in the market. The Accounting and Finance Recruitment Market Trends & Salaries Report published by contracting company Ambition and covered in a recent issue of The Accountant magazine states: "Accountants salaries have increased around 8 to 10 percent over the past year."

The report also reveals that the Big Four appear to be gaining some ground in the battle with industry to keep staff revealing that "they have been very successful in retaining their accountants now that salaries are in line with the market place."

Over in North America a similar issue is being faced as is revealed by the 2016 Salary Guide which states that top accounting, finance and business systems professionals are "hard to find". And those with the most sought-after skills are "often already employed."

This is particularly a problem as the country is seeing a sharp increase in demand for the skilled workforce: "Business growth is driving healthy demand for accountants in both the corporate and public accounting sectors. General accounting skills are in demand," states the report.

Despite it being an on-going issue there doesn’t appear to be a light at the end of the tunnel. When it comes to the supply and demand of skilled accountants, what seem to be positive measures, such as salary increases and a rise in business activity, are actually making matter worse. Furthermore, the fact that the issue also stems from a lack of appropriate support and advice from the offset, it is fair to ask will there ever be enough accountants?

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