ISSN: 2201-2141 Labur Market Research - Accuntants Australia May 2015 Occupatins in cluster Rating Number f years in shrtage, 5 years t 2014-15 2211 Accuntants N shrtage 0 Key issues There cntinue t be large numbers f qualified applicants fr accuntant psitins. The key feature f this labur market is the significant number f qualified applicants wh are regarded by emplyers as being unsuitable. There were, n average, arund 22 applicants per vacancy wh were knwn t hld relevant qualificatins at the bachelr degree r higher level 1, but just 2.6 per vacancy were assessed as being suitable. There is a marked variatin in the size f candidate fields between metrplitan and reginal vacancies, with reginal emplyers attracting fewer applicants. Nnetheless, there were still arund 13 applicants fr each reginal vacancy, n average, suggesting cmpetitin fr available psitins is strng in mst lcatins. Less than 2 per cent f surveyed emplyers did nt attract any applicants fr their vacancies (belw the average acrss all assessed ccupatins f 5 per cent). Almst a quarter f surveyed vacancies remained unfilled six weeks after advertising in 2015, but unfilled vacancies were limited principally t New Suth Wales (despite there being 18 r mre qualified applicants fr each unfilled vacancy in the state and sme emplyers receiving many unslicited applicatins frm experienced accuntants) and reginal Queensland. The research suggests that there is a significant discrepancy between emplyers needs and the skills f applicants. Demand fr accuntants, thugh, is subdued and sme emplyers (ntably in reginal Queensland) displayed n urgency t fill their vacancies, preferring t wait fr an ideal candidate. Key factrs in relatin t applicants unsuitability relate t experience. In particular, there is a mismatch between the level f experience f applicants and that sught by emplyers and between the specific experience f applicants and the specialisatin required fr available vacancies. Pr cmmunicatin skills cntinues t be nted as an imprtant reasn that many applicants are regarded as unsuitable. The number f dmestic student cmpletins in bachelr degree studies in accunting is lw cmpared with internatinal student cmpletins in this field, and the number f dmestic student cmpletins specialising in accunting has nt changed significantly ver the last few years. 2 Emplyment utcmes fr dmestic accunting graduates are at their weakest level since the early 1990s recessin. 3 1 This may understate the real number as sme emplyers did nt assess all f the large number f applicatins they received and were cnsequently unable t determine applicants qualificatins 2 Department f Educatin, Higher Educatin Student Data Cllectin: Award Curse Cmpletins, Custmised tables Labur Market Research and Analysis Branch Department f Emplyment Page 1
Survey cverage and results Vacancies were surveyed acrss the three individual ccupatins included in the accuntant categry in the Australian and New Zealand Standard Classificatin f Occupatins (ANZSCO), i.e. accuntant (general), management accuntant and taxatin accuntant. Althugh 2011 Census data shw that arund 90 per cent f accuntants are accuntants (general), the surveyed vacancies were split mre evenly acrss the three ccupatins. The surveyed vacancies included a range f specialisatins and tasks as well as levels f senirity, cvering junir psitins t senir supervisry rles, and included specialist accunting firms as well as cmpanies perating acrss ther industry sectrs. Almst 30 per cent f surveyed vacancies were in reginal areas. This cmpares with arund 20 per cent f accunting emplyment being in reginal lcatins 4. Emplyers generally sught bachelr degree qualified accuntants with many als requiring certificatin as a Chartered Accuntant (CA) r Certified Practising Accuntant (CPA) and a minimum f five years f experience. There were similar candidate numbers in 2013-14 and 2014-15. In 2014-15, there were 34.0 applicants per vacancy, n average, f whm 22.4 held accunting qualificatins at the bachelr degree r higher level, but just 2.6 per vacancy were cnsidered by emplyers t be suitable. By cmparisn, in 2013-14 emplyers attracted 36.0 applicants per vacancy n average, f whm 5.8 were cnsidered t be suitable. Arund 45 per cent f surveyed emplyers attracted in excess f 20 qualified applicants, with 14 per cent attracting mre than 50, and 16 per cent attracted fewer than five. There was a ntable fall (f 12 percentage pints in the prprtin f vacancies filled in 2014-15 t 76 per cent. This is arund the same as the prprtin filled acrss all assessed ccupatins (73 per cent) but slightly belw the average fr all assessed prfessins (78 per cent). Figure 1: Prprtin f vacancies filled (%), average number f applicants and suitable applicants per vacancy (n.), Accuntants, 2007-08 t 2014-15 Surce: Department f Emplyment, Survey f Emplyers wh have Recently Advertised 3 GCA, Graduate Destinatins Tables and Figures, 2013 and GCA, GradStats, 2014 4 ABS, Census f Ppulatin and Husing, 2011 Labur Market Research and Analysis Branch Department f Emplyment Page 2
A few vacancies were unfilled because applicants lacked the required level r type f experience. Others attracted suitable candidates, but they did nt accept ffers f emplyment as they were seeking higher remuneratin which emplyers were unwilling r unable t prvide, r they withdrew their applicatins befre an ffer was made. A small number f vacancies which attracted 20 r mre applicants remained unfilled despite attracting qualified applicants, as these accuntants were cnsidered t be unsuitable r the preferred applicant withdrew. A lwer prprtin f vacancies was filled in reginal lcatins than in metrplitan areas (65 per cent cmpared with 81 per cent), but reginal emplyers generally attracted large numbers f applicants and had the chice f multiple suitable applicants (12.7 applicants per vacancy, n average, f whm 1.7 were cnsidered t be suitable). All emplyers wh were recruiting fr reginal vacancies attracted applicants and very few did nt have interest frm suitable applicants. Unsuitable applicants It was mre difficult t determine the number f applicants wh were qualified in this year s research, as sme emplyers nted that they did nt assess all f the large number f applicatins they received and were cnsequently unable t prvide infrmatin abut the number f candidates wh held relevant bachelr degrees r higher qualificatins. Sme applicants were unsuitable because they were unqualified (althugh sme were clse t finalising their studies). Nnetheless, there were large fields f qualified but unsuitable applicants. Key reasns applicants were nt cnsidered by emplyers t be suitable were insufficient experience (emplyers reprted that they ften attracted large numbers f graduates fr psitins which required significant years f experience) lack f specific experience (such as in the prvisin f strategic taxatin advice, cmmercial r business r in a particular sectr) inadequate knwledge f Australian accunting (sme were verseas qualified and had little Australian experience) inadequate written and ral cmmunicatin skills nt being CA r CPA accredited inability t liaise face-t-face with a diverse client base lack f understanding f the emplyers business needs. Other cmmentatrs supprt the imprtance f strng cmmunicatin skills t be suitable fr accunting emplyment. Mr Peter Rebuck, retiring head f accunting at the University f New Suth Wales nted "Pr cmmunicatin [skills] is a significant reasn why many new grads dn't get placed" and that "Accunting is als a peple-based activity. If yu can't wrk in teams r prefer t wrk alne, pick anther career." 5 5 Australian Financial Review, India is the cmpetitin, retiring prfessr tells students, 23 February 2015 Labur Market Research and Analysis Branch Department f Emplyment Page 3
Demand and supply trends Emplyment There was abve average grwth in the level f emplyment f accuntants ver the five years t May 2015 (up by 8.5 per cent cmpared with 7.2 per cent fr all ccupatins ), althugh grwth was weaker than that fr prfessinals as a whle (up by 13.4 per cent). There was relatively lw grwth ver the year t May 2015 and emplyment fell slightly between late 2014 and mid 2015 (Figure 2). ABS Labur Frce Survey 6 figures shw that emplyment f accuntants increased by 0.8 per cent (r 1,500) ver the year t May 2015, t 183,900. This grwth rate is belw the all ccupatins average f 1.8 per cent and the rate fr prfessinals (4.5 per cent). Accuntants prvide services t rganisatins acrss all industries. In 2014, thugh, 50.2 per cent f accuntants were emplyed in Prfessinal, Scientific and Technical Services, 8.8 per cent in Financial and Insurance Services, 5.4 per cent in Public Administratin and Safety and 5.2 per cent in Manufacturing. 7 Figure 2: Emplyment, Accuntants, 10 years t May 2015 ( 000) 250 200 150 100 50 0 Surce: ABS, Labur Frce, Department f Emplyment trend Vacancy levels Althugh emplyment has risen, there has been n real recvery in the level f advertised vacancies. There were 1.6 per cent mre vacancies advertised fr accuntants ver the year t May 2015 cmpared with the previus year, but advertised vacancy levels are arund 60 per cent belw the peak demand perid f mid-2008 (Figure 3). 8 6 ABS, Labur Frce, May 2015, Department f Emplyment trend 7 ABS, Labur Frce, Annual average 2014, Custmised table 8 Department f Emplyment, Internet Vacancy Index, 12 mnth mving average Labur Market Research and Analysis Branch Department f Emplyment Page 4
Figure 3: Internet Vacancy Index, Accuntants, Dec 2006 t May 2015 140 120 100 80 60 40 20 0 Surce: Department f Emplyment, Internet Vacancy Index, 12 mnth mving average (Dec 2006 = 100) Training Abut 78 per cent f accuntants hld a bachelr degree r higher qualificatin. 9 There are a number f curses which satisfy entry requirements t the prfessin, s examining higher educatin data by curse specialisatin prvides the mst useful basis fr analysis. Cmpletins data by curse specialisatin shw that the number f dmestic student cmpletins in accunting has nt change markedly ver the last few years. Mre than 7,000 dmestic students (bachelr degree and pstgraduate) graduated with a university qualificatin specialising in the field f accunting in 2013 (a rise f arund 2 per cent cmpared with 2012). 10 The number f dmestic students cmpleting a bachelr r pst-graduate degree and specialising in accunting has varied relatively little since 2006 (numbering in the range 7,000 t 7,600 almst every year in the perid) cmpared with the marked rise in higher educatin cmpletins acrss all fields f educatin. Figure 4: Higher educatin cmpletins by curse specialisatin, Accunting, 2006 t 2013 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 4556 Dmestic - Bachelr Internatinal - Bachelr 5495 6218 5805 1507 1443 1621 1505 1733 1526 9989 9614 56565572 58546246 6991 7565 8235 8482 5961 6023 5582 6043 5782 5778 Surce: Department f Educatin, Higher Educatin Student Data Cllectin, ASCED Accunting 6577 Dmestic - Pstgraduate Internatinal - Pstgraduate 6639 4556 1153 1306 2006 2007 2008 2009 2010 2011 2012 2013 4647 9 ABS, Census f Ppulatin and Husing, 2011 10 Department f Educatin, Higher Educatin Student Data Cllectin: Award Curse Cmpletins, Custmised table Labur Market Research and Analysis Branch Department f Emplyment Page 5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 The number f internatinal students graduating with a qualificatin in the field f accunting is significantly larger than the dmestic chrt, but internatinal student cmpletins peaked in 2011 befre falling in each f the subsequent years. Graduate utcmes Graduate Careers Australia (GCA) 11 data shw that emplyment utcmes fr accunting graduates have sftened in recent years (Figure 5). The 2014 GCA Australian Graduate Survey shws that 73.9 per cent f 2013 bachelr degree accunting graduates were wrking full-time (as a prprtin f thse available fr full-time wrk fur mnths after graduatin), the lwest level since 1992. While the prprtin f accunting graduates emplyed was slightly strnger than the average fr all bachelr degree graduates (68.1 per cent), it was arund 14.7 percentage pints lwer than that recrded fr these graduates in the 2008 survey (which shwed the strngest utcmes ver the past decade). Figures fr masters graduates frm the 2014 survey suggest emplyment utcmes cntinue t be weak, with 66.3 per cent f thse wh were available fr full-time wrk being emplyed fulltime, well belw the average fr all masters graduates (80.5 per cent), and 14.1 percentage pints lwer than in the 2005 survey. Figure 5: Prprtin in full-time emplyment, Accunting graduates, 2005 t 2014 100 90 80 70 60 (%) 50 40 30 20 10 0 86.9 85.9 86.4 88.6 85.1 79.1 78.3 79.9 77.4 73.9 80.4 76.1 70.7 75.2 72.3 68.4 68.9 73.2 61.7 66.3 Bachelr Masters Surce: GCA, Graduate Destinatins, custm tables Nte: Refers t the prprtin f dmestic graduates wh were available fr full-time emplyment, wh were in full-time emplyment fur mnths after the cmpletin f their qualificatins 11 GCA, Graduate Destinatins, custmised tables Labur Market Research and Analysis Branch Department f Emplyment Page 6
GCA data als shw that just half the bachelr degree accunting graduates wh were emplyed fulltime in 2014 wrked as accuntants. Anther 16 per cent were emplyed as clerical and administrative wrkers and 9 per cent as auditrs, cmpany secretaries and crprate treasurers. Table 1: Tp ccupatins, accunting bachelr degree graduates 2014 (% f thse emplyed full-time fur mnths after graduatin) Tp five ccupatins % Accuntants 49.6 Clerical and Administrative Wrkers 16.4 Auditrs, Cmpany Secretaries and Crprate Treasurers 9.0 Business, Human Resurce and Marketing Prfessinals 2.1 Sales Wrkers 2.1 Surce: GCA, Graduate Destinatins, 2014, custmised table In 2013, the median starting salary fr accunting bachelr degree graduates was $50,000, slightly belw the average fr all ccupatins ($52,500) 12. A number f studies and media reprts als prvide cmmentary n graduate labur markets in accunting and the prspects fr accunting students. Many f these pint t the particular difficulty internatinal graduates experience. Sme suggest that such graduates are excluded frm many tp graduate emplyers and thers cmment that mst f the small number f entry-level jbs in accunting specify the need fr permanent residency. 13 Other indicatrs and utlk Demand fr accuntants varies fr many reasns, such as changes in taxatin and ther cmmercial laws, changes in the demand fr financial advice, the verall level f accunting wrk dne in Australia and the general level f activity in all sectrs f business. Cmmentary is smewhat varied abut the current state f the labur market fr accuntants. Media reprts suggest that sme mid-tier accunting firms received almst 2,000 applicatins fr 85 graduate psitins in 2014, equivalent t arund 24 applicants per jb. 14 Hays quarterly reprt, hwever, suggests that there is a pickup in recruitment activity and candidate cnfidence. The reprt als ntes that the number f available candidates is decreasing leading t skill shrtages which in sme cases are becming acute. 15 The reprt des nt specify the nature f the shrtages and the suggestin f significant shrtages is nt supprted by the Department s research r ther evidence, including media articles which nte that educatrs cncede that Australia s tertiary system is prducing t many accuntants, with the wrng skills, fr the current market t absrb. 16 12 GCA, GradStats, 2013 Data are fr median starting salaries f bachelr degree graduates in first full-time emplyment and aged less than 25. 13 Australian Financial Review, $55,000 accunting degree desn t add up, 6 August 2014; Australian Financial Review, Little chance f a jb fr internatinal accunting graduates, 6 August 2014; Australian Financial Review, Freign accunting students put in t hard basket, 12 August 2014 14 Australian Financial Review, Few Jbs, but freign students still arrive, 17 September 2014 15 Hays, Quarterly Reprt, Accuntancy & Finance - Cmmerce & Industry, July - September 2015, www.hays.cm.au/reprt/accuntancyfinance---cmmerce-industry-695 (last accessed 7 July 2015) 16 Australian Financial Review, Brisbane student will earn $10K mre than peers after graduatin, 12 August 2015 Labur Market Research and Analysis Branch Department f Emplyment Page 7
There have als been suggestins that wrk previusly dne by graduates has been sent ffshre. Mr Martin Bugeja, head f accunting at the University f Technlgy Sydney is quted as saying that internatinalisatin f accunting had made the jb market mre challenging fr Australian accunting graduates in the past three years as big chartered accunting firms, investment banks and large crpratins tk entry-level jbs ffshre. 17 Mr Bugeja als suggests that students that didn't place in the tp 20 per cent n grades were struggling t secure emplyment. In terms f future demand fr accuntants in Australia, mst cmmentatrs suggest there will be relatively large numbers f new jbs. CPA Australia and the Institute f Chartered Accuntants Australia suggest that ver the medium, term penings fr accunting jbs will number arund 11,000 per annum. This is in additin t unquantified demand fr accuntants wrking in management r related financial and ther services. 18 Rbert Half s research shws that mre than half f CEOs in Australia say that they expect t recruit new finance and accunting prfessinals in 2015. 19 Technlgy changes and ff-shring are, thugh, likely t cntinue t effect demand fr accuntants in Australia. A reprt released by Chartered Accuntants Australia and New Zealand (CAANZ) and RMIT highlights several challenges in terms f demand fr Australian accuntants, including ffshring f wrk and the transfrmatin frm manual t autmated prcessing which it ntes is likely t result in a lss f accunting jbs and affect current chartered accuntants (wh it suggests will need t up-skill) as well as new graduates. 20 Sme industry surces suggest that the lwer Australian dllar may affect the quality f accunting wrk undertaken ffshre. 21 The Department f Emplyment prjects that, ver the five years t Nvember 2019, emplyment f accuntants will increase by arund 13.3 per cent r 25,700, abve the rate f grwth prjected acrss all ccupatins (10.0 per cent), but belw the average fr all prfessins (14.2 per cent). 22 Replacement demand, thugh, is likely t be relatively lw. ABS jb turnver data shw that, annually, 5.2 per cent f accuntants, auditrs and cmpany secretaries leave their ccupatin grup (cmpared with 11.4 per cent acrss all ccupatins) 23. A relatively lw prprtin f accuntants are aged 45 years r lder (33.5 per cent, cmpared with 39.1 per cent acrss all ccupatins) and the median age f accuntants is 38 years cmpared with 40 fr all ccupatins. 24 17 Australian Financial Review, India is the cmpetitin, retiring prfessr tells students, 23 February 2015 18 CPA and Chartered Accuntants Australia and New Zealand, Jint submissin t the Department f Industry, http://industry.gv.au/office- f-the-chief-ecnmist/skilledoccupatinlist/dcuments/2015submissins/cpa-australia-and-chartered-accuntants-australia-and-new- Zealand.pdf (last accessed 7 July 2015) 19 Rbert Half, 2015 Rbert Half Salary Guide, www.rberthalf.cm.au/accunting-salary-guide (last accessed 7 July 2015) 20 Evans.E, Burritt.J, Guthrie.J, Chartered Accuntants Australia and New Zealand and RMIT, Future Prfing the Prfessin: Preparing Business Leaders and Finance Prfessinals fr 2025 21 AccuntantsDaily, Delitte warns accuntants n ffshring, 7 July 2015, www.accuntantsdaily.cm.au/breaking-news/8135-delittewarns-accuntants-n-quality-f-ffshring (last accessed n 7 July 2015) 22 Department f Emplyment, Occupatin Emplyment Prjectins t Nvember 2019 23 ABS, Labur Mbility, February 2013 24 ABS, Labur Frce, Annual average 2014, Custmised table Labur Market Research and Analysis Branch Department f Emplyment Page 8
A number f articles fcus n the changing rles f accunting firms and n subsequent skill sets fr accuntants. The accunting labur market, while nt alne amng skilled ccupatins in this regard, appears t have a marked gap between applicant skills and attributes and thse required by emplyers, which results in relatively large numbers f qualified but unsuitable applicants fr advertised vacancies. The Hays Quarterly reprt states There has als been an increase in rles that require well runded experience rather than ne particular skill set and ntes that all emplyers are being very clear in their requirement that candidates must have systems experience. Cultural fit is imprtant t. 25 Jasn Dale f CAANZ is cited in the reprt released by CAANZ and RMIT as nting that the challenges facing the accunting prfessin relate mre t skills gaps between graduate attributes and emplyer requirements than t verall demand fr accuntants. He utlines a number f attributes that graduates require, such as critical thinking, decisin-making skills, strng cmmunicatin skills and a fcus n ethics. 26 Sme accunting firms suggest they are starting t hear criticism f the quality f graduates, and suggest that this may be because f a shift in the type f skills prfessinal firms need. 27 Others, thugh, suggest that 2015 had prduced a bigger pl f higher-quality graduates t select frm than he had seen in eight years. 28 25 Hays, Quarterly Reprt, Accuntancy & Finance - Cmmerce & Industry, July - September 2015, www.hays.cm.au/reprt/accuntancyfinance---cmmerce-industry-695 (last accessed 7 July 2015) 26 Evans.E, Burritt.J, Guthrie.J, Chartered Accuntants Australia and New Zealand and RMIT, Future Prfing the Prfessin: Preparing Business Leaders and Finance Prfessinals fr 2025 27 Australian Financial Review, Few jbs, but freign students still arrive, 17 September 2014 28 Australian Financial Review, India is the cmpetitin, retiring prfessr tells students, 23 February 2015 Labur Market Research and Analysis Branch Department f Emplyment Page 9