Aided by new technology, accounting firms have dramatically increased their capacities in just a few short years. Powerful software solutions have enabled new services, like data analytics, and bolstered existing ones, like audit, through automation and artificial intelligence. However as firms tech up, they need more expertise to unlock and maintain the full value of these solutions, which has led to intense competition for those who possess those skills.
Accountants are far from the only ones who need tech talent. This means they are competing not only with other firms but, well, every type of business out there, including the tech industry. Shawn Slavin, head of the Information Technology Alliance, said this will serve to drive up costs as firms attempt to attract specialized talent to work for them.
"When you look at how much technology has evolved in the last decade — Google, Facebook, the metaverse, blockchain, NFTs — there's so much out there that it's made a talent war. The industry has woken up to this need for technology talent, but now it is competing for talent everyone wants right now," he said.
Part of this is because many technologies are becoming very specialized, requiring different experts for different purposes. He compared it with a hospital: To say they have doctors would be too vague. They have lung specialists, heart surgeons, neurologists, oncologists and many more, all of whom are needed to handle the multitude of circumstances that lead people to the hospital in the first place.
"Now you have data scientists, app developers — all of them are very hard to find and very in demand if we want to unlock this technology," he said.
This is a relatively new development. There was a time not so long ago, Slavin recalled, when accountants used mainly off-the-shelf products — they would go to the office supply store and get a copy of, say, tax software stored on a CD-ROM. Once installed, it pretty much worked as expected. Slavin said there is a misconception that, today, people can do the same with AI or machine learning or dashboards.
"It is not just a flip of a light switch thing. I think the leadership has to tune into a different frequency than it has in the past, and needs a mindset that thinks differently about this technology and what it takes to unlock the value of its potential. It needs new IT professionals who think more along the lines of solving complex problems with this technology. I think the off-the-shelf mentality needs to go. These new products, you can't just open a box and install the software and have it work," he said.
Part of this comes from the persistence of a certain mindset that believes that, while the technology may enable activity with business value, it does not itself drive it. More progressive firms, however, have taken efforts to expand their business through the use of technology and use it to drive its direction. The old mindset uses technology to make existing processes more efficient. The newer mindset uses technology to create entire new service lines.
"The firms that are a little more ahead of the pack are using technology to create new strategic advisory business lines, and old business lines are reinvented with technology at the core. There's even a lot of places where [technology] leads to new revenue-generating opportunities," he said.
This can't be done, however, without staff who have the know-how to really use the technologies to their full potential. This will be required for firms to move out of the traditional compliance services and into more value-added engagements that allow accountants to be the true trusted professionals for their clients. Slavin said that technology, even at a small level, can at least help by freeing up capacity for broader, more strategic thinking.
"When it comes in, it takes care of the mundane work. You're taking care of people and talent issues and workload compression issues by freeing capacity in your key resources and unlocking talent to go upmarket a little more," he said.
He is confident that this talent issue will eventually be solved, noting that young accountants are already studying technology much more than those of previous generations. Once they enter the workforce, they will bring this knowledge with them, providing firms with the expertise they need. Accounting leaders just have to wait a little while for this to happen.
"I think the role will have a technology infusion behind it. More specifically, with what these professionals [learned] at school, their talent and expertise and alignment with business leaders [means] they'll be a more valued resource and will use their skills more than ever. I think the potential for an accountant in the future will outpace the potential today," he said.
