“The global accounting & auditing market is anticipated to progress at a CAGR of 5.7% to reach US$ 379 billion by the end of 2032.” – GlobeNewswire
The above statistics highlight that the audit and accounting industry is experiencing significant growth and transformation. This is mainly attributed to technological advancement and the adoption of cloud-based accounting, automation, AI, and more. To adapt to this transformation, audit and accounting firms need highly skilled accountants and consultants adroit in technical expertise.
However, workforce challenges such as skill shortages, high employee burnout, early retirement, sub-optimal utilization, etc., stipple the growth of audit and accounting firms.
This is where efficient workforce planning comes into the picture.
It helps foresee future workforce requirements, acquire the right talent, and successfully achieve business goals.
This blog lists the efficient ways to implement workforce planning in the audit and accounting sectors.
Let’s get started!
1. Significance of workforce planning in audit and accounting firms
Workforce planning forecasts, analyzes, and identifies future requirements, assesses gaps, and implements measures to achieve business objectives.
An efficient workforce plan will enable audit and accounting firms to align resource needs with strategic and operational business objectives. For example, a multinational audit and accounting firm want to grow its global client base by 150% in the next 5 years. With a strategic workforce plan, decision makers can assess the future demand for accounting personnel and carefully plan to bridge the gaps within the organizations.
On the other hand, an operational workforce plan focuses on tracking day-to-day operations, identifying immediate resource demands, and addressing ad-hoc changes to enhance operational efficiency. For instance, audit and accounting firms experience a spike in demand for auditors during the fiscal year’s end. Therefore, an operational workforce plan enables accounting firms to hire on-demand financial professionals in advance and provide training to existing internal accountants to prepare for the peak season.
Thus, workforce planning enables accounting organizations to avoid last-minute firefighting, reduce resourcing costs, and maintain a balanced mix of permanent and contingent professionals. Additionally, it also helps maximize the billable consultant utilization and enhances business profitability.
Now, let’s look into ways to help audit and accounting firms use their talent pool best.
2. Steps to implement a workforce plan in audit and accounting firms
An effective workforce plan is critical for audit and accounting firms to boost their sustainability and profitability.
Here are the best ways to implement workforce planning in your organization:
A. Understand the operational and strategic business goals of audit and accounting firms
The first step to creating an efficient workforce plan is evaluating the organization’s long-term and short-term goals and identifying roles required to meet these business objectives. For this, the accounting managers, HR, stakeholders, and executives communicate and coordinate with each other to form the workforce planning strategy.
For instance, the strategic goal of an accounting firm is to diversify its services to asset management in the next 3-5 years. This long-term goal is later divided into smaller milestones of a particular duration, which becomes a significant part of the operational workforce plan. This includes enlisting professionals such as investment managers, financial advisors and investing in software like Robo-advisors.
B. Assess immediate and future accounting project requirements
Once the organizational goals are clear, the next step is to assess immediate and future project demands. This helps accounting resource managers evaluate the demand for consultants and ensure their availability.
For instance, an upcoming audit and accounting firm project must detect financial fraud risks for a client. For this, the firm needs forensic accounting specialists, auditors, risk analysts, Certified Fraud Examiners (CFE), lawyers, etc., to perform research to trace funds and identify assets for recovery.
C. Identify future skill requirements and conduct a gap analysis of accounting personnel
The next step is to analyze and identify future skill requirements. For example, suppose there are various projects lined up, and the firm needs more auditors and consultants skilled in CAATT (Computer-aided-audit tools and techniques).
Therefore, managers would look into the resource pool to identify the consultants and auditors with matching skills. In addition, they would conduct a capacity vs. demand gap analysis to determine whether there are sufficient consultants with CAATT skills to complete the project. In case of any shortages/excess, they can take corrective measures accordingly.
D. Implement a mitigation plan to meet accounting project demands
Once the skill gap has been determined, accounting and audit firms must proactively frame a mitigation plan to bridge the excess and shortages. Next, the HRD will evaluate the business scenario and formulate appropriate strategies for each situation.
The mitigation plan should encapsulate various elements such as recruitment, training, and succession planning strategies.
For excess, they can bring forward project timelines, provide shadowing opportunities, etc. Likewise, for shortages, they can resort to retraining/upskilling measures for the existing consultant pool, implementing out rotation and backfill strategy, or conducting planned hiring. Additionally, they can also facilitate succession planning to identify and prepare consultants for senior roles.
E. Maintain the right mix of permanent and on-demand consultants
As an industry that experiences seasonal peaks, audit and accounting firms requires more accountant and auditors to meet these demands. With an operational workforce plan, the manager would analyze whether the demand is one-off or recurring. Accordingly, they can hire a permanent/contingent workforce or maintain a mix of both.
In addition, the high resourcing costs of niche skilled resources such as forensic accounting specialists, actuaries, etc., make it challenging for firms to maintain a permanent talent pool. For instance, if an accounting firm requires an actuary, a high-cost niche skilled professional, for a project, they can hire them on demand instead of recruiting a permanent resource. This helps control project costs and increase billable opportunities, enhancing the bottom line.
F. Monitor and control accounting workforce plan periodically
The final step is to monitor and control the workforce plan regularly, which helps ensure that it is in the right direction. Workforce planning is an ongoing process measured against certain milestones, timelines, and goals. For example, the firm’s strategic objective is to increase its revenue by 10% in the next 4-6 years.
However, due to evolving market demands, seasonal peaks, troughs, or customers’ changing preferences, accounting firms might have to revise their strategic and operational workforce plan accordingly. For this, they have to monitor the plan using various performance metrics in real-time, identify the areas of progress and improvements, and address any issues.
Now that we have understood the various ways of implementing a workforce plan let’s see how advanced software can help in better workforce planning.
3. How can modern workforce planning software help improve the efficiency of audit and accounting firms?
Workforce planning provides various benefits to audit and accounting companies, such as maximizing billable utilization, timely delivery of projects within the budget, enhancing business profitability, etc.
Implementing advanced workforce planning software streamlines the processes and helps maximize the potential of your audit and accounting personnel.
The tool offers centralized visibility into resource information that helps managers to identify the best-fit accounting personnel for the right project at the correct cost and time.
The tool’s advanced forecasting capabilities and capacity planning feature help analyze future resource requirements to forward plan and meet seasonal demand fluctuations. Accordingly, managers can proactively identify excess/shortfalls of professionals and take resourcing treatments to bridge the gap.
Moreover, it provides a competency matrix that helps audit and accounting firms to implement effective employee retention and succession planning strategies.
The business intelligence reports, such as forecast vs. actuals, financial reports, project vacancy, and utilization heatmaps, provide real-time insights into crucial resource metrics. It helps accounting supervisors track and monitor the consultant’s performance; if there is any variance, they can take course-corrective measures ahead of time. Furthermore, managers can use utilization reports and mobilize skilled accountants from non-billable to billable projects to maximize billable utilization.
Accounting supervisors can create scenarios and check the outcome with the what-if-analysis feature. This will enable them to better their decision-making process. Also, whenever there is a resource constraint, managers can use this feature to narrow down an ideal plan that will help effectively utilize the consultants in current or upcoming projects.
4. Wrapping up
“Quality management starts with building a high-quality workforce.” – Pearl Zhu, Writer & Prolific Blogger.
A skilled labor force is necessary for businesses to be profitable in volatile market conditions. Effective workforce planning enables audit and accounting firms to build and maintain an optimized resource pool. It helps them assess their current and future workforce needs, identify the skill gaps and implement solutions to meet short and long-term goals.
With dynamic workforce planning software, accounting firms can proactively overcome resourcing challenges like poor utilization, silos of information, and talent gaps. In addition, it will positively impact the organization’s profitability and sustainability.
5. The SAVIOM Solution
SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has highly customizable products for project portfolio management, professional service automation, and workforce planning software based on business requirements.