The accountancy and finance practice market is at a crossroads. Economic caution, evolving candidate expectations, and the relentless advance of technology are creating a perfect storm of challenges and opportunities. Firms are finding themselves in a delicate balancing act, trying to attract scarce talent while managing tight budgets and planning for a future where traditional roles are being redefined.
The hiring paradox: caution in a candidate-driven market
A sense of caution has settled over the practice market. While the need for skilled professionals, particularly in tax and audit, remains high, firms are more hesitant and selective than ever when it comes to hiring. This has created a paradoxical situation where, despite a persistent talent shortage, even strong candidates are finding it harder to secure interviews and offers.
Firms are scrutinising applicants with a finer-toothed comb than in previous years. This increased carefulness is a direct response to economic uncertainty. With rising operational costs and squeezed margins, every hire is a significant investment, and businesses are determined to get it right the first time.
This cautious approach has led to a notable stagnation in salaries. For the first time in my memory, the upward trajectory of practice salaries has flattened. While the market is still fundamentally candidate-driven, the momentum has shifted slightly, giving employers a bit more leverage than they've had in the past.
Candidate expectations vs. employer realities
While employers are holding their cards close, expectations among professionals continue to evolve, creating a significant disconnect in several key areas.
The most prominent battleground is hybrid working. Accountancy and finance professionals, now accustomed to flexibility, see it as a standard expectation. Despite this, many practice firms, especially smaller ones, are pushing for a full return to the office. Their reasoning is often tied to cost control and a belief that an in-office presence is essential for collaboration and client service.
Interestingly, it's the larger, top-tier firms that are showing more flexibility. They recognise that offering hybrid work is a powerful retention tool. They empower their client-facing employees to plan meetings around their location, reducing unnecessary travel and improving work-life balance. For smaller firms, failing to offer this flexibility could mean losing top talent to their larger competitors.
Salaries also remain a major point of friction. People are facing a higher cost of living and naturally expect a significant pay rise to justify a career move. Yet, many firms are making low offers. This isn't necessarily a negotiation tactic. For many smaller practices, the money simply isn't there. Rising costs have crippled their ability to offer competitive salaries. This creates a challenging stalemate: professionals need more to move, but firms can't afford to offer it. The best advice I can give accountancy and finance firms that can afford it, is to put their best foot forward from the start. A strong initial offer demonstrates value and significantly increases the chance of securing their desired hire.
The unstoppable rise of AI and technology
Technology, particularly AI, is actively reshaping the structure of accountancy firms today. The impact is most profound at entry level. Transactional, process-driven roles, like bookkeeping, have been largely eliminated already by AI and automation.
This has prompted a fundamental shift in the traditional pyramid structure of accountancy firms. The base of the pyramid, once filled with junior staff handling repetitive tasks, is shrinking. The future model is predicted to look more like a diamond, with the bulk of employees in middle-management and advisory roles, supported by technology, and a leaner structure at both the top and bottom.
This raises a critical question: how will the next generation of accountants learn the fundamentals if the entry-level roles that taught them are disappearing?
On the other hand, this technological shift has increased the value of tech-savvy professionals. Firms are highly interested in part-qualified or newly qualified candidates who possess strong financial modelling and digital skills. The 'Making Tax Digital' initiative has already changed how practices operate, and proficiency with the latest software is essential.
Attracting and retaining top talent
In this complex market, how can firms stand out and keep their best people? The focus is shifting from purely financial incentives to a more holistic approach centred on culture, development, and reputation.
In a market saturated with small and medium-sized practices, reputation is everything. Jobseekers are diligent researchers. They check Google and Glassdoor reviews, and they listen to word-of-mouth within the industry. The accountancy world is small, and a bad reputation travels fast. A strong, positive online presence is now a non-negotiable for any firm serious about attracting talent.
Beyond online reviews, the nature of a firm's client base can be a significant draw. Specialising in exciting or niche industries, like music or tech, can make a practice far more attractive to ambitious professionals looking for engaging work.
The untapped leverage: a path to partnership
One of the most powerful advantages practice firms have over in-house roles is the clear, structured path to partnership. This is a unique selling point that many firms are failing to leverage effectively. By mapping out a clear and credible career progression plan, practices can offer a long-term vision that industry roles often cannot match. This is a crucial strategy for preventing the best accountants from making the traditional move into commerce and industry.
Ultimately, the most effective retention strategy is also your most powerful recruitment tool: looking after the employees you already have. Offering genuine flexible working, investing in professional development, and fostering a positive culture are key. When you focus on the internal employee experience, it doesn't just keep your team intact, it shines outwardly. This builds the very reputation you need to attract the next wave of accountancy and finance talent, making your practice a place where people want to build their careers.
For more insights into the accountancy and finance practice labour market and for reliable salary benchmarks for the sector, download Reed's 2026 accountancy and finance practice salary guide here.
