Covid-19: impact on the accounting & finance jobs market

After a busy 2019 – where accounting & finance vacancies grew by 21%, 2020 is shaping up to be a very different year, with Covid-19 at the centre of this change. 

For all businesses worldwide, finance professionals will be integral to their smooth running as they seek to navigate the biggest market shock since the 2008 Global Financial Crisis (GFC).

Through a combination of grants, state back loans and tax relief, the Government has enabled businesses to ‘buy time’ and has provided help for companies to navigate their cashflow pressures. With Government measures focussed primarily on survival during lockdown, inevitably those companies which were less capitalised pre-Covid may be at risk of closure. 

With finance as the core of all continuity strategies, accounting & finance professionals will need to prove their worth at a management level – where difficult decisions are made regarding cost lines. 

Despite the ability of businesses to furlough, it is estimated that unemployment will rise by up to 2 million as a result of the Covid-19 crisis. 

So, what does this mean for jobs within accounting and finance? 

In a nutshell, businesses may well cut back on low to mid-level finance roles, as transactions slow down and the need for such roles diminishes. In contrast, senior finance managers who can help plan cash management, liquidity and cost control are likely to be elevated in status. For Accountancy Firms; the biggest growth area for 2020 is likely to be in the insolvency and restructuring teams.

Trends in accountancy firms

For Accountancy Firms, this year will pose unique challenges which have no comparison in recent times. Whilst activity in 2019 was buoyant, for example, there was a visible surge in activity in Q1 2019 (post Brexit extension recruitment surge), with more than double the vacancies of the prior two quarters combined, this year already looks quite different.

To start with, the sector was already grappling with how best to advise clients regarding the changes to IR35 (off-payroll working) along with the potential implications of the Digital Services Tax. 

At the same time, the Big 4 have been taken to task for their audit services – with none of them being able to meet the Competition and Markets Authority’s quality audit target of 90%. As a result, recruitment into audit surged in 2019 – growing by +74% in the last year. 

Now with Covid-19 hitting, insolvency departments are likely to be busier than they have been in a decade. For context, when looking at the impact of the GFC, this led to a spike in insolvencies of +36% above the subsequent ten-year average. Whilst the Government are implementing counter measures to mitigate the worst impact, UK GDP fell by 19.1% in the three months to May 2020 –  meaning Insolvency Practitioners will be in demand.

The other factor likely to impact the Accountancy Firms is that as the crisis hits, there may well be a wave of consolidatory mergers as businesses look to cut costs and combine resources to ride out this crisis. With that, there is the potential for a spike of work for Corporate Finance teams under pressure to make deals happen. 

However overall for Accountancy Firms, the main challenge of the Covid-19 crisis will be onboarding, – how best to introduce people to the business at a time when everyone is working from home, and to do this as efficiently and quickly as possible in order to have a significant advantage over competitors.

Trends in financial services

Within Financial Services the impact of Brexit was no doubt visible in 2019 – with overall vacancies falling year-on-year, specifically in the Banking sector. With that, there has also been a drop in vacancies for Accountants of -2.8% year-on-year. 

Conversely, within the Insurance sector, recruitment has remained buoyant, with volumes up +19% last year. However, the greatest growth has been within Fintech.

As a result, whilst it is often said that the impact of technology is to reduce jobs, when looking at roles for qualified accountants, there has been a net increase year-on-year when including Fintech into Financial Services. 

The surge within Fintech is especially noticeable when comparing the period of 2017 to 2019, with volumes up +61% over the period. 

Impact of Covid-19 

Now with the Covid-19 crisis hitting, the question will be how banks and insurance companies adapt to the change in priorities. For banks who have been under pressure to make finance available, the challenge will be squaring the mandate laid down by Government against mandated lending ratios. Also, whilst Government is acting as a guarantor, this is only for 80% meaning banks will remain cautious about who they lend to, to avoid bad debts. 

Analysed by function, Financial Accounting and Reporting roles dominate, where these account for 30% of the total jobs advertised in the field. The second largest area of recruitment is for Management Accounting and Financial Management, which has also seen the greatest increases over the past few years, with volumes up +55%. There has also been a significant uplift in MI Analysts, with vacancies up by +47%.

We see similar trends within the Fintech businesses, in that Management Accounting and Financial Management roles have seen a significant increase year-on-year of +142%, making it the most recruited for function. However, perhaps in a sign of the increased regulatory pressure FinTech’s are coming under, the fastest growing area overall has been for Internal Audit.

Looking into 2020, whilst vacancies in Q1 held steady the truer picture won’t be clear until later in the year. 

Trends in Commerce & Industry

Across Commerce & Industry (C&I) businesses have been increasing the size of their finance teams over the past three years, with every industry recording more vacancies for accountants in 2019 than 2017. 

However with the Covid-19 Crisis hitting, certain sectors will be impacted more than others. For example, we would expect to see a freeze in Consumer Goods and Services, whilst at the same time there is a notable expansion in hiring within the Healthcare and Pharmaceuticals industry. 

Looking back at 2019, it is in the North of England especially that recruitment has been the most buoyant – with volumes up +137% in the North West and +70% in Yorkshire and the Humber, making these regions the fastest growing. 

Unexpectedly, London dominates accounting for 38% of all the Accounting vacancies. Equally what is interesting with this, is that despite many major businesses relocating away from the capital, the region is still outgrowing most, in part because it remains a hotbed for venture capital (VC) funding. 

By function, it is Management Accounting and Financial Management which has the most vacancies, where year-on-year 2017-19 volumes were up +70%. 

Interestingly, there has also been a surge in Tax roles. As mentioned previously, the new digital services tax regime coming into effect will hit technology companies specifically, so it is likely they increase their teams to compensate. Similarly the IR35 issue continues, with businesses needing to ensure compliance where blanket bans are not an option.

It is apparent that the most fluctuation in hiring will be amongst sectors within commerce & industry. Added to this was the move for government to not put in a request for a Brexit extension. As a result, there is likely to be a secondary market shock when the withdrawal agreement comes to an end on January 1 2021 – with many businesses still unaware of the scale of the preparations they need to undertake. 

Whilst we are only at the beginning of this long road of market change and upheaval, one thing that has been certain in the past few months in the vital role that accounting & finance professionals will be playing across the board in helping businesses, individuals and the economy in navigating through the pandemic and beyond. 

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