Across the EU, economies are on the brink of recession. From the UK Cost of Living Crisis to the global Great Resignation, there are several factors at play that are contributing to a potential economic crash. Surviving a recession as an individual, or even as a business, means finding a steady income in a solid field, to weather the storm.
There are few sectors that represent long-term and stable job security, with accountancy, healthcare and education being three prime examples. But, is it true that accountancy is a recession-proof field, and what might an unstable economy mean for the accountants of today? Read on to find out more.
Are accountants recession proof?
While it can’t be said for certain that all jobs will survive a future recession, the demand for accountants has continued to grow in recent years. Despite a recession, individuals and businesses are still going to need some aspect of wealth management, tax advice and bookkeeping services, arguably more than ever as making money work grows in importance.
In the US alone, there were 1,449,800 accountancy jobs in 2021, with that number expected to grow by 6% by 2031. In the UK and the EU, the story is somewhat similar, with the combined industry employment hitting 1,473,873 by March 2022.
The numbers look positive when it comes to a rising number of opportunities within the sector. However, there are other factors at play when it comes to the actual ownership of accounting firms globally, and it’s that of the Great Resignation.
The Great Resignation is a recent term coined to describe the rapid resignation and short tenure of employees in the wake of the Covid-19 pandemic. Originally used to describe the job shift in the U.S. the Great Resignation has undoubtedly spread to countries around the globe, notably the EU and the UK.
Increased opportunity due to remote and flexible working conditions, alongside new businesses offering competitive packages, have contributed to the Great Resignation. While this may drive benefits for individual employees, it has had its effect on the skills gap for employers, with a potential talent pool not acquiring the necessary skills to keep businesses competitive in new industries. While it’s often attributed to a lack of learning and development, short tenures and new forms of digital accounting are also playing their part.
Combine this with a widespread economic recession that’s predicted to be more significant than expected, and it’s bad news for accounting businesses that need to stay at the cutting edge of new fields.
What does this mean for the accountants of today?
The outlook for the accounting professionals and businesses of today is certainly not as bleak as in other areas like manufacturing or services. For businesses, staying competitive means providing adequate learning and development to retain talent within the business, while benefiting from extra talent in new areas of digital accounting too.
Maintaining growth strategies is critical to retaining talent in accountancy firms, which, according to Broadbean Technology, have experienced a 33% decline in candidates between May and June 2022. We would expect businesses to focus on a number of areas in this case, such as technology investment, review and cost-cutting, advisory services and culture management, forecasting, and the maximisation of operational efficiency.
For individual accountants, the recession will hopefully be a far less demanding time for careers. While there is certainly a danger of business collapse, the jobs market is still predicted to grow competitively, providing a plethora of opportunities to see individuals through tough times. With growth strategies at the forefront of accountancy firms’ priorities towards 2023 and beyond, there may even be some stark benefits for professionals in the field, as well as opportunities to learn and grow beyond their current capabilities.
So, is accountancy recession-proof after all?
Accountancy cannot clearly be defined as a recession-proof industry. However, while other industries are struck by loss-of-custom, or even cash flow problems, we expect that these will not be the challenges that an economic downturn will amass for accounting firms.
Things can look positive for accounting firms who focus on growth strategies, as well as accounting professionals looking to maintain a steady stream of income. Concentrating on areas of digital innovation and staying ahead of the technical and talent-related obstacles is a must for accountancy firms, while continuing to adapt to the changing needs of clients in their own respective industries is critical for future success.
Make the connections to strengthen your growth with INAA
At INAA, we connect accounting firms who aim to deliver quality professional services around a shared vision to make global business personal and take personal business global.
With every industry change, our collaborative association of international businesses is committed to driving the conversation around auditing and accounting.
Join today to start building powerful business relationships.