5 Effective Strategies to Counter Resourcing Challenges in Audit and Accounting Firms
The global accounting services market is forecast to be worth $735.94 bn by 2025 ~ Research and Markets
This stat is a testimony to the growing prominence of accounting and auditing firms worldwide. This proliferation can be attributed to economic uncertainties, ever-changing tax rules, and regulations, global expansion of companies, etc.
To keep up with these rapidly changing trends and ensure growth in the competitive global market, an accounting and auditing firm requires resources with diverse skills, including several niche expertise such as forensics, actuary, etc.
However, various resourcing challenges, such as a shortage of skilled consultants, seasonal fluctuations, etc., make it difficult for these firms to build and maintain an optimized talent pool.
This informative article explains the major resourcing challenges of accounting and auditing firms and how SAVIOM’s enterprise resource management software can help counter them.
So, let’s get started.
Characteristics of Accounting and Auditing Firms
An accounting consultancy firm provides customized and knowledge-based services like corporate accounting/finance advisory, tax consulting, auditing, forensic accounting, etc., to clients. The various roles involved are accountant, auditor, tax advisor, budget analyst, risk analyst, etc.
One noticeable characteristic of an accounting and auditing firm is the significant seasonal fluctuations in consultant demands. For instance, the demand for tax consultants goes up during every financial year-end as corporates seek assistance with filing tax returns. Therefore, it becomes challenging to cater to the seasonal surge in consultant demands, especially for small to mid-sized firms with budget constraints.
Moreover, as the accounting industry is knowledge-intensive, these firms face a shortage of skilled consultants, especially in a multi-project environment. Resultantly, the existing workforce, especially niche-skilled consultants like actuaries, are booked on multiple projects beyond their capacities. It, thus, leads to employee burnout and, eventually, unplanned attrition in the long run. Additionally, the ever-rising digital transformation and evolving accounting and tax regulations make it imperative that consultants stay updated with the latest knowledge for a competitive edge.
However, audit and accounting firms, particularly small and mid-sized, face various resourcing challenges due to increased global competition. Sometimes, they fail to pay competitive salaries and other monetary benefits, making it a challenge to hire and retain skilled consultants.
Given the features and primary resourcing challenges, the following section elucidates the best strategies to combat them.
Ways to Overcome Resourcing Challenges in Audit and Accounting Firms
As discussed, maintaining a large talent pool with varied skills is not easy for accounting firms. However, one can follow a few proven practices below to counter resourcing challenges and maintain an optimized workforce.
2.1 Forecast and Plan Consultants’ Demands Ahead of Time
A lack of visibility into future project demands causes last-minute firefighting for required accounting/auditing consultants. It can eventually cause expensive hiring, budget/schedule overruns, subpar deliverable quality, etc. To avoid this, resource managers should gain foresight into upcoming projects’ consultant demands ahead of the curve.
This will enable them to implement suitable resourcing measures such as training and upskilling to fill the skill gaps. That way, they can identify cost-effective and competent accounting resources. Furthermore, if requisite skills are not found internally, project-based or skill-based hiring can be initiated, based on business requirements.
2.2 Create a Balanced Mix of Permanent and Contingent Workforce
Hiring a permanent consultant pool with all the requisite skills is infeasible for accounting consultancy firms due to budget limitations. Also, finding billable projects for the expensive critical-skilled consultants during seasonal troughs becomes challenging, increasing their idle time and billable losses.
Therefore, to avoid this, managers can look into current and future project requirements and determine if they are one-off or recurring. Based on this evaluation, they can hire permanent consultants for recurring demands and an on-demand workforce for one-time requirements. This way, they can establish the right balance between permanent and contingent accounting consultants and accomplish all projects successfully.
2.3 Maximize Billable Utilization of the Accounting Workforce
Resource managers must evaluate consultants’ current and future bookings to predict their billable and non-billable utilization rates correctly. It helps them determine those whose billable utilization rates are below the minimum criteria set by the firm. They can then mobilize these resources from non-billable to billable opportunities proactively to maximize their productive utilization.
The projects’ timelines can also be brought forward to deploy idle consultants on and maximize productive utilization. Further, underutilized professionals can be allocated to critical high-priority projects if the professionals already working on them are overbooked to ease their workload. Selling excess capacity can also be an efficient way to maximize consultant billable utilization.
2.4 Apply Resource Optimization Techniques During Seasonal Fluctuation
As mentioned above, niche-skilled accounting professionals are often overbooked during seasonal peaks. On the contrary, finding appropriate jobs for such professionals during the trough period is arduous, causing underutilization and billable losses. To avoid these instances, managers can implement appropriate optimization techniques.
For projects with flexible deadlines, one can use resource leveling to change the start or end date or readjust the consultant’s demand against their capacity to ease their workload. For projects with stringent timelines, managers can leverage resource smoothing to assign additional consultants to complete the project without overburdening project team members.
2.5 Implement Regular Training/Upskilling Programs for Consultants
Accounting firms need to build and maintain a resource pool equipped with knowledge of the latest accounting/tax laws and regulations. Furthermore, accounting/auditing consultancy skills are continuously evolving with increased demand for expertise in technology, analytics, etc. So, training the workforce for the same is imperative to prevent skill obsolescence.
For that, organizations can examine the industry to check for any new skills and competencies that must be built. Next, resource managers can coordinate with line managers and HR to implement suitable training/upskilling programs for consultants while considering their schedules and interest. It won’t only help employees stay competitive and relevant for multi-faceted projects but also engage and retain them.
Now that the best practices to counter resourcing challenges are understood, let’s understand how resource management software can help.
How Can Resource Management Software Help?
Resource management software provides 360-degree visibility into various auditing/accounting projects, non-project activities, vacations, admin tasks, etc., and respective bookings. This functionality, combined with advanced filters, including team, department, competency, etc., helps audit or tax managers screen consultants’ profiles easily and find the best-fit consultants for all projects.
It also lets resource managers view consultants by location and deploy global resources from low-cost locations to reduce project costs. Additionally, the capacity vs. demand reports can identify the existing skill gaps and proactively bridge them with suitable internal or external resourcing measures. Further, by providing foresight into consultants’ current and future schedules, this tool helps managers predict their utilization levels and take measures to maximize them beforehand.
Additionally, various business intelligence reports, like forecast-vs-actual and utilization, provide insights into consultants’ utilization levels, identify overburdened consultants, and take optimization measures to ease their workload. Also, project vacancy reports help assess the upcoming project resource demands and determine if they are one-off or recurring. This evaluation helps create the right blend of permanent and contingent workforce and manage seasonal peaks efficiently.
The accounting consultancy industry has undeniably a promising future owing to the ever-growing accounting needs worldwide. However, this industry often witnesses various resourcing challenges, as discussed above. So, one must implement the appropriate strategies and equip a robust resource management solution to overcome them and ensure the firm’s success and sustainability.