Outsourcing is Hurting Training
In recent years, the accounting profession has witnessed a significant shift in how tasks are delegated within public accounting firms. Outsourcing, once a sporadic practice, has now become commonplace, particularly in the realm of entry-level tasks such as the preparation of audit and tax workpapers. While outsourcing may initially seem like a cost-effective solution, its long-term consequences on domestic talent within the industry are alarming. Today, we are going to discuss how outsourcing is having a negative impact on domestic talent development. Let’s jump in!
The Erosion of Opportunities for New Staff:
Traditionally, public accounting firms served as training grounds for budding accountants, providing invaluable hands-on experience and mentorship opportunities. However, the outsourcing of entry-level tasks has deprived new staff of crucial learning experiences. Instead of tackling these fundamental assignments themselves, staff are either not being hired as much or are acting as reviewers for an offshore accountant’s work. Outsourcing of these kinds of tasks can create two problems for public accounting firms:
There are LESS ONSHORE STAFF learning from the work experience. Typically, firms promote from within and the staff of today are the senior associates of tomorrow. If there are less staff to develop, the pool of talent for senior associates is inherently smaller.
The onshore staff are GETTING LESS EXPOSURE to the fundamental areas that shape their learning experience at the public accounting firm. Less exposure to this type of work early on in someone’s career can considerably slow down their career growth.
While some tasks are great targets for outsourcing, using an offshore team without properly considering the talent development needs of local new hires may not work out in the long run. Even with extra training courses, staff might not be as prepared as their predecessors when it comes to the fundamentals of the job because of an excess of outsourcing.
The Importance of In-House Training through Entry-Level Tasks:
The tasks typically outsourced in public accounting firms, such as the preparation of simple audit and tax workpapers, may appear mundane at first glance. However, they play a crucial role in the development of new staff members. These entry-level tasks serve as the foundation upon which more complex accounting principles are built. By engaging in hands-on work, new staff gain exposure to fundamental concepts, develop critical analytical skills, and learn the intricacies of accounting software and methodologies.
Tasks like reconciling accounts, preparing trial balances, and organizing financial statements may seem routine, but they can provide invaluable insight into the client and firm’s operations at a fundamental level. They offer new staff the opportunity to understand the nuances of different industries, familiarize themselves with client-specific challenges, and develop the attention to detail necessary for accurate financial reporting.
Moreover, tackling these entry-level tasks under the guidance of experienced professionals allows new staff to ask questions, seek clarification, and learn best practices firsthand. The mentorship and guidance provided during these formative experiences are invaluable in shaping the future trajectory of their careers. I can personally attest to the value I’ve received from performing these tasks over a number of years because they laid the groundwork for tackling more complex issues down the line. As new staff progress in their careers, they build upon the knowledge and skills acquired through these entry-level tasks, gradually assuming greater responsibilities and tackling more challenging assignments. Without the opportunity to engage in these fundamental tasks, new staff are ill-equipped to navigate the complexities of higher-level accounting work, hindering their professional growth and potentially limiting themselves within the firm.
The Impact on Young Domestic Talent:
Outsourcing of entry-level tasks not only deprives new staff of essential learning opportunities but also undermines their career progression and professional fulfillment. Young domestic talent, eager to embark on their accounting careers, are often sidelined as outsourcing takes precedence.
Furthermore, the lack of hands-on experience hampers their skill development and confidence in tackling complex accounting challenges. Unlike their predecessors who benefited from immersive learning experiences within the firm, today's young professionals are at risk of being left behind, ill-prepared to navigate the intricacies of the profession. Many young accounting professionals learn by doing, and it often takes multiple iterations of doing work, getting review comments, revisions, and direct exposure to issues to really grasp certain concepts. Additionally, staff build their confidence through these experiences, and are rightfully less confident in areas where they have less hands-on experience. By having less experience, many staff won’t be able to grow their career as effectively.
Moreover, the outsourcing trend perpetuates a vicious cycle, as firms increasingly seek experienced hires to compensate for the lack of skill development among their entry-level staff. This further marginalizes young domestic talent, who are often overlooked in favor of more seasoned candidates, exacerbating their sense of disillusionment and hindering their upward mobility within the firm.
In essence, the outsourcing of entry-level tasks not only deprives new staff of critical learning opportunities but also undermines the holistic development of future accounting professionals. By prioritizing in-house training and providing new staff with meaningful work experiences, public accounting firms can cultivate a skilled and resilient workforce capable of addressing the evolving needs of clients and the industry.