Private equity’s growing influence on accountancy talent

Private equity investment is increasingly reshaping the UK accountancy profession, with its influence now extending well beyond ownership structures into the way firms recruit, reward and develop their people. 

As deal activity accelerates across the mid-tier, the sector is becoming something of a testing ground for how private equity-backed professional services firms can balance growth, efficiency and talent development in an industry that has traditionally relied on long-term partnership models.

The UK market presents a particularly distinctive environment for this experiment. Its strong mid-tier of regional and national firms, combined with regulatory oversight from bodies such as the Institute of Chartered Accountants in England and Wales (ICAEW) and the Financial Reporting Council (FRC), has historically reinforced a professional culture centred on partnership, autonomy and long-term career progression. With the arrival of private equity capital, however, this is beginning to challenge many of those assumptions, prompting firms to rethink everything from remuneration structures to the nature of leadership roles.

A new battle for senior talent

One of the most visible changes is the way firms are competing for senior talent. Private equity-backed firms are increasingly willing to offer aggressive compensation packages in order to attract experienced professionals who can help drive rapid growth during relatively short investment cycles.

Recent developments at Grant Thornton illustrate the scale of this shift. Following investment from Cinven, the firm introduced a new reward framework designed to offer a significant premium on market benchmarks, with some packages reportedly offering up to a 50% uplift compared with typical industry compensation levels.

Alongside higher pay, the structure of rewards is evolving. Rather than relying solely on traditional partnership equity, firms are experimenting with employee benefit trusts and enhanced bonus arrangements designed to align employee incentives with private equity exit timelines. The aim is to create a model that retains senior leaders while still allowing investors to maintain a more centralised ownership structure.

“Automation and the adoption of AI are not yet advanced enough to replace the developmental function those roles provide.” – Paul Lodder, VP of accounting product strategy at Dext

At the same time, hiring at the top of the profession is expanding rather than contracting. Grant Thornton appointed more than 100 new partners and directors during 2025 alone as part of a strategy designed to strengthen leadership capacity and accelerate growth following the investment.

Technology investment and the junior pipeline

However, the impact of private equity is not limited to senior pay packets. It is also influencing the types of skills firms prioritise when recruiting, as investment increasingly flows into technology platforms and digital transformation programmes.

Paul Lodder, vice president of accounting product strategy at Dext, says the narrative that private equity investment is hollowing out parts of the profession contains some truth, but risks overlooking the broader transformation under way.

“The narrative that increased private equity investment is gutting junior roles through a sharper focus on margins and automation has some basis, but it is far from the full picture,” he says. “There is an argument that PE-backed firms demand greater discipline around profitability and efficiency, which accelerates the automation and centralisation of lower-margin trainee roles. In that sense, margin pressure may contribute to a leaner junior intake.”

Private equity capital is also allowing firms to recruit from outside the traditional accounting talent pool, bringing in data specialists, software engineers and digital transformation professionals who can help develop new services.

According to Shru Morris, chief executive of Dow Schofield Watts, this shift reflects a broader change in how firms think about the types of employees they need.

“Firms backed by private equity may be looking for a slightly different demographic of employee – potentially more ‘doers’ focused on delivery rather than future strategic leaders aiming for equity partnership,” Morris explains. “At the same time, a lot of PE investment is going into technology platforms and operational efficiency, which means firms are also seeking people who can add value through technology-enabled services.”

Yet while technology investment is changing hiring priorities, both Morris and Lodder argue that the profession is still grappling with a deeper question: how to modernise service delivery without undermining the traditional training structures that have historically developed future leaders.

Automation and artificial intelligence are increasingly capable of handling routine accounting tasks, but Lodder believes the profession has not yet fully adapted its training model to reflect this shift.

“Automation and the adoption of AI are not yet advanced enough to replace the developmental function those roles provide,” he says. “While technology is reducing manual processing, most firms have not fundamentally redesigned training for an AI-enabled model. This means foundational accounting skills are still built through the repetition of reconciliations, journals, compliance work and supervised exposure. AI can complete routine tasks but humans are still vital to provide oversight on these.”

According to Lodder, the risk for firms is that efficiency-driven models could reduce entry-level roles before new training frameworks are established.

“If firms reduce that layer without rethinking how capability is developed, the long-term risk is a compressed pipeline and weaker mid-tier talent,” he explains. “The issue is about whether efficiency-driven models are evolving training quickly enough to sustain the profession’s future capability.”

These structural changes are occurring alongside a broader redefinition of what partnership means within private equity-backed firms. For decades, the promise of equity partnership has been one of the profession’s strongest incentives for ambitious professionals, offering both financial rewards and a significant degree of strategic influence.

Partnership in a PE-backed profession

Morris believes private equity investment is already reshaping that dynamic. “Private equity investment is changing the traditional partner model in many firms. Historically, partnership meant true equity ownership and significant decision-making power. In some PE-backed firms, however, the partner role is becoming more akin to a salaried position within a larger organisation,” she explains. “As a result, there may be a group of senior managers and aspiring partners who feel that the route to equity and influence has changed. Some of those individuals may decide that the environment no longer suits them, particularly if they want autonomy and a seat at the decision-making table.”

These changes are beginning to surface in recruitment discussions, as Morris has noticed at Dow Schofield Watts. Candidates are seeking greater clarity about ownership structures and decision-making authority.

“Yes, we are seeing more conversations with candidates about this than we were 12 months ago. Much of that stems from the changing nature of partnership in firms that have taken on private equity investment,” she says. “Some senior professionals want greater decision-making power over the vision of the firm, the types of clients they work with, and the services they deliver. If that autonomy becomes more limited within a larger PE-backed organisation, they may start looking elsewhere.”

“Firms backed by private equity may be looking for a slightly different demographic of employee – potentially more ‘doers’ focused on delivery rather than future strategic leaders aiming for equity partnership.” – Shru Morris, CEO of Dow Schofield Watts

In some cases, professionals who originally joined smaller regional practices for their entrepreneurial culture may find themselves working within much larger organisations following a private equity-backed acquisition.

“We’re also seeing cases where candidates joined regional firms because they preferred a smaller, more personal environment, only to find themselves part of a much larger PE-backed group after an acquisition,” Morris adds. “For some people, that loss of identity or autonomy is a catalyst for moving on.”

These shifts are closely tied to the consolidation strategy that underpins much of private equity’s activity in the accountancy market. Rather than relying solely on organic hiring, investors typically pursue buy-and-build models that expand firms rapidly through acquisitions.

Research from the advisory firm Moore Kingston Smith suggests this approach has become increasingly dominant across Europe’s professional services sector, with more than half of private equity deals in 2025 taking the form of bolt-on acquisitions.

In practice, this often means a private equity-backed platform firm acquiring smaller regional practices and integrating their staff into a larger group. While this strategy can accelerate growth, it also creates significant cultural and operational challenges as organisations attempt to merge teams that previously operated with very different working styles and identities.

For Morris, this dynamic is likely to reshape the structure of the profession itself over the coming years.

“We may see the profession split into two slightly different talent ecosystems,” she points out. “On one side, private equity-backed firms will likely focus more heavily on technology-enabled services, compliance work, and scalable platforms. These organisations will employ professionals who can operate effectively within that model. On the other side, more entrepreneurial professionals may gravitate toward boutique firms where they can focus on high-margin advisory work, build strong client relationships, and exercise greater autonomy.”

For Lodder, the key challenge for firms navigating this transition will be maintaining a sustainable talent pipeline while embracing the efficiency gains that technology and investment can deliver.

Private equity capital may be accelerating the pace of change within the profession, but the underlying challenge remains the same as it has always been: ensuring that firms continue to develop the next generation of skilled professionals.

Morris believes the sector ultimately stands to benefit from the influx of investment, provided firms recognise that financial performance alone cannot define long-term success.

“Private equity entering professional services is ultimately a positive development,” she says. “It brings investment, technology, and innovation to a sector that had remained relatively unchanged for decades.”

However, she emphasises that the profession’s future will still depend on its ability to attract and retain talented people.

“Professional services is fundamentally a people business,” she concludes. “The firms that succeed in the long term will be those that build strong, lasting client relationships, and that depends heavily on attracting and motivating top talent.”