There is a long-established pattern of hiring activity (demand) around Newly Qualified Accountants which typically peaks in April/May and Sept/Oct each year, coinciding with the end of training contracts.
The cycle looks something like this: Company A goes to market, hires a newly qualified accountant and, 12 -18 months later, as they 1) move to a new company, 2) move internally, 3) leave to travel overseas, and so on… a gap is created again and Company A goes back to the market to hire another newly qualified accountant. Make sense?
This pattern has driven demand for many years but there are a number of new elements at play in 2021 that are creating uncertainty as to the outlook for this year’s newly qualified accountants. These elements include:
Effects on supply:
- Newly qualified accountants will not have the same options to relocate overseas this year; nor did newly qualified accountants last year. Result = higher supply
- The first lockdown in 2020 coincided (April/May) with the end of training contracts in 2020 – very few companies had the processes in place for virtual hiring and induction at that time. Less demand last year meant that people remained in practice and are now available for newly qualified type roles. Result = higher supply.
- As practices have continued to diversify their revenue streams there are far more internal opportunities for newly qualified accountants in larger firms than there were traditionally. Less newly qualified accountants are looking externally post-training contract than in times gone by. Result = lower supply.
Overall however there is most certainly a higher supply of credible people for newly qualified roles outside of practice than one would expect in a normalised market.
Effects on Demand:
- While many companies now have virtual hiring processes in place, virtual induction is trickier. An Audit Senior moving into a financial accounting role in industry, (for example), requires a lot more support and guidance in their first few months in the job (audit work and financial accounting work are very different when it comes to the day-to-day). Consequently, hiring managers are more likely to hire someone with hands-on financial accounting experience than someone transitioning from audit; hence the spike we have seen in demand for people with 1-2 years PQE. Result = reduction in demand for newly qualified accountants as hiring managers favour people that require less induction/coaching.
- People that came out of training contract in 2019 and made their first move out of practice have been hesitant to move on (to other companies or locations) or push for internal promotions given the macro-environment. If those people are not moving, they are not leaving a gap behind them to fill. This is having a very fundamental impact on the recruitment cycle. Result = significant reduction in demand, albeit temporarily.
- Quite frankly some parts of the economy remain effectively closed and are not hiring. Result = reduction in demand.
Overall there is a material reduction in demand for Newly Qualified accountants at present and we expect this to continue over 2021.
When demand is down and supply is up there are some obvious consequences, including:
- Hiring manager driven market – hiring managers have choice and can be increasingly selective in terms of experience, relevant organisational structure and industry exposure (see the Barden Career Model for more on this here >>>). It becomes harder to move between pillars (Financial Services v’s Industry) or to access highly sought after roles (Business Partnering, Commercial, Corporate Finance) in the first step after training contract (all covered in the guide above)
- In a hiring manager-driven market, newly qualified accountants have less choice and need to be more flexible in terms of the roles, location, industry and salary.
In summary, as a result of the these factors the jobs market has become more competitive for newly qualified accountants and the people that are securing the roles out there are the ones that get the best advice, have the best CVs, seek interview preparation support and take it seriously. Luckily Barden and CASSI have all those bases covered for you 😉
Coming out of your training contract in 2021? Do you want to make sure you make the very best first step after qualifying? Do you want a virtual coffee meeting with an expert recruitment consultant; someone who is a qualified accountant, just like you (meet some of our team here >>>)? Do you want a little help to create your very own best financial future? No problem. Just drop us a line today on email@example.com and we will take it from there. Simple.