Recruitment crisis stifles growth rates

Growth among the UK’s biggest accountancy firms is being inhibited by an inability to recruit the right staff, according to the Accountancy Age Top 50 league table published today.

Link: Accountancy Age Top 50

The industry may have breathed a sigh of relief on the news that an increase in revenues has propelled the sector out of the doldrums ­ at £6.7bn, combined fee income is up more than 6% on last year. But as demand for qualified staff reaches an all-time high, an extremely tight recruitment market is leaving many firms struggling to fill vacancies.

Last year, 82% of Top 50 firms said they intended to take on more staff and 70% touted plans to increase partner numbers. In reality, 40% of firms have reduced headcounts, and almost two thirds have either the same number of, or fewer, partners.

Average staff attrition rates ­ currently 18% across all staff and 26% among newly qualifieds ­ illustrate the extent to which firms are competing not only with each other, but increasingly with large businesses.

Kristin Watson of the education and training department of the ICAEW, said the tight recruitment market was driving demand among investment banks and other City institutions to train accountants themselves, rather than poach staff from practice.

Firms are also having to be increasingly creative in the way they appeal to potential new recruits. KPMG is investing in online selection tools from HR consultancy Cubiks to help reduce the recruitment headache.

Keith Dugdale, KPMG’s director of national recruitment and resourcing, said online personality profiling had slashed recruitment times by around 40%. ‘Previously, we lost out to other Big Four firms because our recruitment processes were too slow. In a growing market that is increasingly competitive, we’ve been able to recruit far more effectively and quickly.’

Albert Ellis, chief executive of recruitment firm Harvey Nash, said full employment meant firms needed to develop their brands. ‘If people have multiple offers, then brand is king. A company that looks after its people, rewards staff well and has a good reputation, will succeed.’

Meanwhile, the revelation that just 4% of partners in the Top 50 come from ethnic minorities coincided with a call to action for senior executives to tackle the issue of racial diversity.

Chairman of Race for Opportunity Allan Leighton said: ‘Developing business practice that addresses race is a no-brainer. The ethnic minority population in the UK has an annual disposable income spending power of £32bn. Cater effectively to this sector and you will see rewards.’

HEADLINE FIGURES

• £6.7bn Top 50 fee income
• 150% fee income rise at fastest-growing firm, Vantis
• £4.8bn Big Four fees
• £1.7bn mid-tier fees
• £204m small firms fees
• £2.31m best fees per partner
• 91% partners are male
• 4% partners are from ethnic minorities