In the Australian accounting industry, retention rates are a challenge with many accounting firms reporting experiencing a high turnover rate coupled with a shortage of skilled and driven accountants. A study from CFO Brew found that turnover within CPA firms averaged 15% and in professional services firms, including the Big Four, averaged 13.4% in 2022.
Before figuring out how your firm can reduce its turnover rate and retain passionate staff, it’s important to decipher the ‘why?’. Why does the Australian accounting industry seem to struggle to recruit and retain talented staff? What factors play into the current environment that causes such a high rate of turnover? Why is it so hard to find skilled accountants who want to foster a career with your firm?
- Competitive labor market - The low unemployment rate in Australia within the accounting industry creates a competitive marketplace which allows accountants to jump from opportunities when a fresh offer is presented. A survey conducted this year by Chartered Accountants Australia and New Zealand found that a taxation accountant was the second highest job to qualify as being at risk of a national shortage.
- Burnout and lack of balance - A study by FloQast found that 99% of accountants report feeling burnout. High stress, peak tax seasons, lack of work/life balance can all contribute to an accountant feeling the impact of burnout. Rigid ideals matched with understaffed offices can create tension within the industry, while lack of recognition can contribute to low morale and low incentive.
- Lack of career development - According to CPA Australia, accountants are citing the lack of promotional opportunities as a primary reason for leaving their employer. Online forum websites like Reddit allow accountants to post anonymously and users are reporting consistently about the lack of career progression they’re facing. Without a clear path of growth, staff can find themselves pivoting to other firms or a change of career completely.
- Skills shortage - The accounting industry is reporting a severe shortage of skills across firms within Australia. Surveys across CA ANZ and CPA Australia indicate that vacancy fill rates are below 67% for many accounting roles. Regional accountants are experiencing a shortage of general accountants while firms within city centres are finding it difficult to recruit accountants for specific skills like taxation accountants or external auditors. The retirement of older generations is a major factor contributing to this skill shortage, with younger generations showing a lack of interest in the field.
Over the past year, Advancetrack has been collating essential research into the global skills shortage within the industry. What has become a groundbreaking piece of research gives participants the opportunity to report their experiences with an annual report that’s generated shedding light on this pressing issue. You can take part and have your say in the 2025 survey here.
The Australian accounting industry is in a transitional period where values of the past need to be updated to incorporate values of the present. Some firms are seeking talent from remote or hybrid staff while others are overhauling their firm’s values to include a better work/life balance. Some Australian companies are finding success outsourcing their compliance work to offshore teams while focusing on other components of their business. From embracing new technology to fostering a dynamic and flexible workplace to training and upskilling your staff - the future of the accounting industry will be a combination of all factors when looking to succeed.
Take a look at part 2 of this blog: Four strategies to manage retention within your accounting firm
