Tech sector layoffs have been making headlines for months. Will today’s economic conditions affect the accountancy sector, as well? Three members discuss their views on what the future holds for professionals in finance
Garrett McCarthy
Partner
Hugh McCarthy & Associates
Firms like mine have faced staff recruitment and retention issues for years. Practice is always a challenging environment to hire and retain staff, but it has been particularly bad over the last 12 months.
Given the never-ending regulatory changes and additional burdens on clients, I cannot see any reduction in the demand for staff any time soon. The problems stem from staff affordability, high salary expectations and constant pressure on working arrangements. Are they sustainable, and will clients fund them? This is where I see uncertainty rising over the next two years.
In terms of business, 2023 looks very positive, and feedback from our clients is positive, which is great. Our issues are internal: filling roles and recruiting and retaining new staff at all levels is a huge challenge. The people just aren’t out there, and when they are, the opportunities for them are endless, making it very difficult for small and medium firms to recruit.
As a firm, we must be laser-focused on margin for the foreseeable future, with cost increases across our main areas under pressure. Salaries, recruitment, retention and other staff-related costs are going up significantly. IT and compliance costs are a close second and they are also rising. Clients are very resistant to increasing fees which is the crux of the problem.
I would be bullish for the year ahead, we have a great team which we are looking to grow when we can, and our clients are fantastic. We have problems as an industry, but doesn’t everyone? Most importantly, we have the work, which is never a bad thing.
Neil Hughes
Managing Partner
Baker Tilly
Over the past few months, the tech sector in Ireland has been experiencing a reset. Many of the world’s leading tech companies, with EMEA HQs here in Ireland, have begun ‘right-sizing’ as we have finally waved goodbye to the global pandemic.
After taking on additional staff during the pandemic, these multinationals are now rescaling resources back to their pre-pandemic size, often with very difficult consequences for their people, especially those who have recently joined.
First, it is important to understand what is happening. Decisions in the multinational tech sector are primarily driven by investor sentiment. Investors in tech stocks are now finding alternatives to global equity markets during this era of rising interest rates in the form of safer deposit accounts and bond markets. Large equity players, such as the global tech giants, are resorting to crude cost-cutting to ensure that they remain as attractive as possible in terms of their key profitability metrics to fortify their share price as much as they can while the economic landscape evolves.
As this is the key reason for the deep cuts being made, it is unlikely that the accounting and finance sector will feel any direct negative impact because of the reset. Instead, there is a possibility that the additional people that come into the job market in the coming weeks and months will help ease the acute resource pressures currently being felt by firms in professional practice.
Although there may not be many direct finance graduates coming out of the tech firms, our profession has long moved past being a discipline for commerce or finance graduates only. Those graduates with strong analytical skills and a positive attitude can undoubtedly pivot and excel in the accountancy profession.
If the profession can evolve to find a place for those who have not come through the traditional channels for the Chartered Accountants qualification, the outlook for our firm and the wider accountancy sector is very bright.
The pandemic has proven that there will be no let-up in demand for quality financial and business advice. We need to be ready to provide the brightest and best minds to meet the requirements of our clients.
Ornaith Giblin
Consultant
Barden
While it is estimated that there have been 140,000 tech layoffs globally since March 2022, the impact on Ireland has been estimated to be closer to 2,000. Most layoffs to date have been focused on operations with little to no impact on finance teams, and any fallout is likely to have a limited effect on the accountancy profession in Ireland. We have not seen any material risk for accountants across the tech sector from a job security point of view.
As accountants are employed across all industries, we don’t foresee a series of events that would lead to a similar level of uncertainty. Overall, Irish unemployment numbers are at 4.3 percent in December 2022, nearly the lowest for over 20 years.
We have seen the demand for accountants far exceeding the supply in the last 18 months, more than in any other period of time. The tech sector no doubt has contributed to that, and demand will be slightly denuded as a result, but we still expect the current significant imbalance that exists in the Irish market between the supply and demand of accountants to continue.
From an industry perspective, the availability of talent will be a concern in the coming years.
Despite the perception of headwinds, current demand is far outstripping the supply of accountants from the previous peak of Q2 2008.
From an individual accountant’s perspective, the outlook in the short- to medium-term is positive. While the sector is not impervious to macroeconomic factors, we would see the current strong demand for accountants continuing through 2023.