The skills crisis means the most experienced accountants are losing out to the incoming generation, says Rebecca Mihalic.
Old hands ‘paying for higher graduate salaries’
Senior accountants are effectively subsidising higher salaries for entry-level recruits as the industry tackles the skills crisis, says BusinessDepot director Rebecca Mihalic, but that in turn is exacerbating the problem of finding experienced staff.
She said the talent shortage and the broader problem of whether accountants were being paid enough went hand-in-hand and needed to be tackled by charging appropriately as well as changing attitudes to recruitment.
Speaking on the latest Accountants Daily podcast, she said she was “horrified” by the average accounting remuneration revealed by a recent CA ANZ survey, which showed the median salary had risen 11 per cent over the past year to $150,000 but pay for those with the most experience was stuck in reverse.
“As an industry, maybe we're not getting paid as much as we want but we are paying our graduates quite well and the people coming in the zero-to-four years are getting paid more than they ever did,” she said.
“However, that's not coming out of better profits, because we're not doing a great job potentially over there.
“It's actually coming out of people at the top end of the organisation. So those people have been working for 20-plus years. The remuneration report showed that they're actually having an a negative impact to their salaries in the last 12 months.
“So they're being paid less so that we can actually fund these higher salary at the entry level spots, so that we are trying to attract people and keep them in the industry.”
The CA ANZ survey showed that salaries had fallen for those with 21 years or more experience, with a median figure of $209,950.
Ms Mihalic said accountants needed to put their firm on a proper business footing and start charging for a “vital” service.
“Even if you're doing just compliance work … make sure that you're charging appropriately for it, it's a vital service,” she said. “Clients need it, it's your ‘keep me out of jail service’ – it's got huge value.
“And then beyond that, the advisory work and everything else on top of it, just making sure that you're pricing for the value that you're actually bringing to your client and not just barely covering your costs, but really being a profitable business venture.
“Stop just focusing on having a service that you're providing, but really run a business.”
She said it was important to add up the real cost of doing business, factoring in overheads and other expenses, rather than just charging an out-of-date hourly rate. It meant having procedures in place to ensure clients were billed when their scope of work expanded beyond the original brief.
And it also required an overhaul of the public’s perception of the profession to introduce realistic fees and help attract newcomers.
“We're not doing a great job – as an industry and also put back onto our member bodies – advocating for what it is that we do.”
“We need to do a better job of explaining what it is that we do to the next generations.”
One long-term solution to the shortage of experienced seniors had to be attracting young recruits and then training them as they worked, rather than relying on graduates whose numbers had been in decline for “at least a decade”.
BusinessDepot was hiring interns and giving them work experience while they qualified to the level that suited them, she said.
“They'll do internships as they work through completing a certificate for accounting and bookkeeping.
“One of the girls who works with me … will be able to make her choice at the end of that qualification whether she just sits at that qualification for a little while and work mostly on the accounting prep work, but not tax work.
“And she might eventually want to become a qualified bookkeeper or accounting technician, and could go that path.
“Or she could take the qualification that she's done at TAFE and go and rejoin a more traditional path – she could go to university later, she could go on to do her public practice program later.
“These things are open and flexible. And I think that's what's really important to position for more junior and younger people. It’s flexibility and options they want and that’s a huge mind shift for our industry.”
Ms Mihalic said welcoming the younger generation also meant coming to terms with the post-pandemic norm of greater workplace flexibility, which is “probably going to be the saving grace of our industry”.
“As a business owner, I understand the challenges that come with that. Flexible work doesn't mean work from home all the time, it doesn't mean that you lose your culture and it doesn't mean that you lose contact with your staff, it's just a different approach.
“It's a give-and-take system – don't feel that you just have to fully give to your employees, but you need to be open to having that conversation.
“There's always going to be rules around everything and you can set up a situation where your employees feel that they've got the flexibility that they need and that they are demanding now.
“After being able to prove we can work from home during COVID it's hard for us to say no.”