TAKEAWAYS
Addressing the talent drain issue in Singapore’s accounting sector is a pressing matter. According to the Accounting and Corporate Regulatory Authority (ACRA)’s Audit Quality Indicators, for the 12-month period ended September 2022, the average attrition rates of Big Four and non-Big Four (in the listed companies segment) audit firms were 39% and 49% respectively. This is a significant increase from just two years earlier in 2020, which were 24% and 31% respectively. While high turnover and retention are perennial issues, these challenges have exacerbated. This article will delve into some of the contributing factors and present possible ways to plug the talent drain.
In recent years, businesses and their operating environments have undergone major changes. For example, digital transformation has accelerated in an unprecedented manner, there is increased emphasis on the green agenda, and crypto assets and their associated risks have added complexities to the business landscape. These changes have resulted in heightened accounting and regulatory scrutiny, adding much pressure on the accountant, who is expected to keep up with changes at a much faster pace.
Furthermore, being well-versed in technical accounting standards, though still a critical skill set, is no longer sufficient for accountants to thrive in the current environment. Accountants are also expected to be a trusted business advisor, covering a broad range of topics ranging from leveraging technology to optimise the book-closing process, to improving the controls environment in view of emerging risks. Having good business acumen and being equipped with digital skills such as data analytics, data storytelling, and even using artificial intelligence to detect anomalies, have become crucial.
Consequently, such increased expectations add further strain to the demanding job nature of accounting, which is likely to result in even longer working hours without the right tools and support system. It does not help that the accounting profession is also seemingly faced with an “image issue” of losing lustre. Talent flow trends, as reported in the news, have highlighted that recent batches of students in Singapore are less inclined than before towards accountancy; instead, they are gunning for hot courses such as data science, environmental sustainability and more. When compared to other specialisations – without a clear understanding of what can be achieved in the accounting profession – accounting can be misunderstood as being not as well remunerated and having a slower career progression. Junior and mid-career accountants are also leaving the profession for better work-life balance, or for other sectors such as fintech, where career prospects are viewed as being more attractive.
Despite these challenges, there are equally many good reasons to be in the accounting profession, which underline why many of us have chosen to specialise in and remain steadfastly committed to. What accountants do are integral to enabling transparency and informed decision-making, as well as building trust with investors, stakeholders and the wider community. While technology, business models and customer preferences will evolve over time, the fundamental purpose of the accounting profession will always be relevant to the business world throughout the ups and downs of the full economic cycle. It is therefore imperative that the accounting sector come together to introduce the much-needed changes. Here are some recommendations:
1) Total rewards package
To win the war for accounting talent, organisations should go beyond cash rewards and develop a more holistic employee value proposition. For example, PwC Singapore seeks to address this with the launch of its refreshed people value proposition in 2022, which focuses on creating the right and best value for its employees. A key feature is to allow employees to “work anywhere” through flexible work arrangements. To ensure its people are future-ready, the firm also invests an average of 200,000 training hours annually, covering areas including digital upskilling and environmental, social and governance (ESG) factors. It is important to note that such initiatives should be customised for different organisations based on their different needs and available resources.
2) Hybrid working arrangements
The COVID-19 pandemic has hastened the adoption of flexible working arrangements. With life normalising, organisations ought to avoid falling back to the traditional mindset where employees’ performance is perceived to be positively correlated to time spent in the office. PwC’s “Global Workforce Hopes and Fears Survey 2022” found that employees in Singapore prefer to work in a hybrid environment, with seven in 10 respondents preferring some mix of in-person and remote work arrangements, signalling that remote working is here to stay.
For the accounting sector, advancements in technology, coupled with the establishment of robust system controls frameworks, have enabled accounting systems to reside on the cloud and is accessible remotely. This allows most work performed by an accountant to be done out of the office, wherever they are.
3) Tech-enabled and human-led
The speed of technological advancements has picked up significantly, with its impact felt keenly in all industries. For the accounting sector, while technology has enhanced the overall working environment, it has also triggered the debate on whether accounting roles will soon be replaced by machines. In the same “Hopes and Fears Survey” by PwC, nearly 40% of respondents from the Singapore workforce said they are concerned that their role will be replaced by technology in the next three years. This was of higher concern among the younger generation, with nearly half of the Gen Zs surveyed expressing this worry. This is far from true. Accountants will still be required to perform higher-value tasks as lower-value routine tasks are expected to be automated.
With new technologies, such as ChatGPT and Microsoft 365 Copilot which have been headlining the news recently, introducing new ways of working, accountants ought to embrace technological changes and take the lead to reimagine the role of accounting in the new world. Organisations should provide the right level and type of upskilling resources to help accountants leverage the power of technology. Accountants have a natural advantage as they have direct access to big data within the business. With the right digital training, they can harness the information, drive insights for the organisations and value-add to their roles.
4) Continuous learning and upskilling
The private sector is not alone in this undertaking to attract and retain accounting talent. At the Institute of Singapore Chartered Accountants (ISCA)’s Professional Accountants in Business Conference in 2022, Ms Indranee Rajah, Minister in the Prime Minister’s Office and Second Minister for Finance and National Development, had emphasised the importance for accounting professionals to stay skilled. There are government-led support schemes that provide funding support for inhouse and external training programmes, for example, the Monetary Authority of Singapore Financial Training Scheme (FTS)1. Organisations can tap on these schemes to keep their accounting professionals upskilled and abreast of developments.
A concerted effort is needed from the accounting community as a whole to raise the attractiveness of the profession.
About 9% of the 33,689 ISCA members as at end-2022 are undergraduates. To support the profession in having a continuous stream of talents, ISCA offers various undergraduate sponsorship programmes and has expanded the student membership scheme beyond accountancy to the wider academic levels including secondary schools, junior colleges, Institute of Technical Education, polytechnics and universities.
Besides fresh graduates, another pool of potential accountants are mid-level professionals seeking a career change to accounting or who have pivoted to accounting from other related fields. The Experienced Professional Pathway administered by ISCA offers a systematic way for experienced professionals to be recognised as ISCA members and be supported in their professional development, which can be tapped upon to address the talent crunch issue.
In addition to ISCA’s initiatives, the accounting community can play a role by purposefully engaging with future accountants among the youths, so this new generation can pay it forward to its next generation of accountants; this also helps build camaraderie across our community. Also, outreach to youths can be intensified through various channels such as social media, webinars, campus activities and professional career fairs.
In conclusion, the talent drain in the accounting profession is a multifaceted issue that needs to be addressed through a multimodal strategy. A deliberate, methodical approach is crucial to revitalise the profession and restore accounting as the leading career choice. This requires the collaboration of employers, national accountancy body ISCA, and the education sector, supported by the government at the policy level. Employers must reimagine how to combine reward, opportunity, flexibility and purpose to create an optimal working environment for employees. The national accountancy body should continue to lead and refresh the profession’s image by working closely with other stakeholders to attract, retain and expand the talent pool of accounting professionals.
The reversal of the talent drain trend will not happen overnight, and the accounting community must persevere to overcome this issue. With all hands on deck, not only will the talent drain be plugged, we can look forward to future generations of well-trained and high-calibre accounting professionals who will continue to play a pivotal role in the business ecosystem.
Ho Hean Chan is Banking and Capital Markets Assurance Leader, PwC Singapore, and member, ISCA Banking & Finance Committee.
1 The Monetary Authority of Singapore FTS is recognised by the Institute of Banking and Finance. FTS provides 30–90% funding support for financial institutions’ employees inhouse and external training programmes covering topics such as data analytics and sustainable finance.
© 2024 Institute of Singapore Chartered Accountants