Accounting firms are struggling to find and retain qualified staff, especially in areas such as audit, tax, and advisory which means the accounting industry is facing a serious talent crisis in the US.
According to the AICPA, the number of accounting graduates has declined by 4% since 2016, and the number of CPA exam candidates has dropped by 36% since 2010. At the same time, the demand for accounting services is increasing, driven by factors such as globalization, digitalization, regulatory changes, and business complexity.
As a result, the shortage of accountants can have negative impacts on the quality of service, client satisfaction, and profitability of accounting firms.
How can accounting firms overcome this challenge and access a larger pool of talent? One possible solution is to leverage remote hiring models, which allow firms to either outsource some or all of their business functions to external providers located in different geographical locations are directly hire professionals offshore.
Benefits of remote hiring models for accounting firms
Remote hiring is about far more than just the bottom line. Modern accounting practices now view outsourcing staffing as a tool to build eight crucial strategic capabilities beyond cost cutting, but just to make a quit picture, here is a summary of the many benefits of hiring professionals remotely:
Cost savings: Remote hiring can help reduce labor costs, as well as overhead expenses such as office space, equipment, and travel.
Access to a skilled workforce: Remote hiring can provide access to a wider and more diverse range of talent, with different skills, experiences, and qualifications.
Flexibility and scalability: Remote hiring can enable firms to adjust their workforce size and composition according to their changing needs and demands.
Innovation and competitiveness: Remote hiring can help firms tap into new markets, technologies, and best practices, and enhance their service offerings and value proposition.
However, not all remote hiring models are for everyone. There is a distinct difference between hiring freelancers, contractors and remote employees. Depending on the nature and scope of the outsourced functions, the location and characteristics of the provider, and the level of integration and collaboration between the parties, remote hiring models can vary in terms of their advantages and disadvantages.
Freelance Model
The freelance model involves hiring independent contractors or freelancers to perform specific tasks or projects on a short-term or ad-hoc basis. For example, an accounting firm may hire a freelance accountant to prepare a tax return for a client, or a freelance web developer to create a website for the firm.
The freelance model can be attractive for accounting firms that need to fill temporary or seasonal gaps in their workforce, or that require specialized skills or expertise that are not available in-house. The freelance model can also offer high flexibility and low commitment, as firms can choose from a large pool of freelancers with different rates, availability, and quality.
However, the freelance model also has some drawbacks. For instance:
- Quality and reliability: The quality and reliability of freelancers can vary widely, and it can be difficult to verify their credentials, reputation, and performance. Freelancers may also lack accountability and loyalty to the firm, and may not deliver the expected results or meet the deadlines.
- Communication and coordination: The communication and coordination between the firm and the freelancers can be challenging, especially if they are located in different time zones or speak different languages. Freelancers may also have limited access to the firm’s systems, data, and processes, which can affect their efficiency and effectiveness.
- Compliance and security: The compliance and security risks associated with freelancers can be high, as they may not follow the firm’s policies, standards, and regulations. Freelancers may also pose a threat to the firm’s intellectual property, confidential information, and client relationships.
Global Team Model (Global Delivery Model)
The global team model (also known as the global delivery model) involves hiring a team of professionals from a global service provider to perform certain business functions or processes on an ongoing basis. For example, an accounting firm may hire a team of accountants from a global outsourcing company to handle its bookkeeping or payroll services.
The global team model can be beneficial for accounting firms that need to outsource large-scale or complex functions or processes that require high quality and efficiency. The global team model can also offer significant cost savings, as global service providers often operate in low-cost countries with abundant talent.
The global team model also presents these challenges:
- Cultural and linguistic differences: The cultural and linguistic differences between the firm and the global service provider can cause misunderstandings, conflicts, and errors.
- Time zone differences: The time zone differences between the firm and the global service provider can create communication delays and inefficiencies. The firm may also have limited visibility and control over the global team’s activities and performance.
Virtual Team Model
The virtual team model involves hiring a team of professionals from a virtual service provider to perform certain business functions or processes on an ongoing basis. For example, an accounting firm may hire a team of accountants from a virtual accounting company to handle its financial reporting or audit services.
The virtual team model can be advantageous for accounting firms that need to outsource specialized or niche functions or processes that require high expertise and quality. The virtual team model can also offer high flexibility and scalability, as virtual service providers often operate in a cloud-based environment with advanced technologies and tools.
However, the virtual team model also has some limitations. For instance:
- Trust and collaboration: The trust and collaboration between the firm and the virtual service provider can be low, as they may not have a personal or face-to-face relationship. The firm may also have difficulty in managing and monitoring the virtual team’s performance and output.
- Integration and alignment: The virtual service provider may have different systems, processes, and cultures. The firm may also have to deal with compatibility and interoperability issues with the virtual service provider’s technologies and platforms.
- Security and privacy: The security and privacy risks associated with outsourcing to a virtual service provider can be high, as the firm may have to share sensitive data and information with a third party that operates in a remote and online environment.
Dedicated Team Model (Remote Outsourcing Team)
The dedicated team model involves hiring a team of professionals from a remote service provider to work exclusively for the firm on a long-term basis. For example, an accounting firm may hire a team of accountants from a remote outsourcing company to act as an extension of its in-house staff.
The dedicated team model can be appealing for accounting firms that need to outsource core or strategic functions or processes that require high involvement and commitment. The dedicated team model can also offer high quality and efficiency, as remote service providers often have high standards and qualifications.
However, the dedicated team model also has some drawbacks. For example:
- Cost and complexity: The cost and complexity of outsourcing to a dedicated team can be high, as the firm may have to pay a fixed monthly fee regardless of the workload or output. The firm may also have to invest in training, equipment, and infrastructure for the dedicated team.
- Management and supervision: The management and supervision of the dedicated team can be demanding, as the firm may have to provide regular feedback, guidance, and support. The firm may also have to deal with potential conflicts or disputes with the dedicated team members or the remote service provider.
- Dependency and risk: The dependency and risk associated with outsourcing to a dedicated team can be high, as the firm may rely heavily on the dedicated team for its critical functions or processes. The firm may also face difficulties in replacing or terminating the dedicated team if needed.
Nearshore staffing
The nearshore staffing model involves hiring specific professionals from a nearshore service provider to perform certain business functions or processes on an ongoing basis. For example, an accounting firm may hire accountants from a nearshore outsourcing company located in South America to handle its tax or advisory services. These professionals become integral parts of the in-office team and the firm has complete control of the working relationship with the employee.
The nearshore outsourcing staffing model can be advantageous for accounting firms that need to scale or fill complete functions long-term. The nearshore staffing model can also offer cost savings, access to a skilled workforce, and innovation and competitiveness.
Some challenges of the nearshore staffing model:
- Quality and reliability: The quality and reliability of nearshore professional can vary depending on their experience, reputation, and performance. Nearshore service providers need to conduct thorough background checks and compatibility interviews.
- Communication and coordination: With regular offshoring, the communication and coordination between the firm and the employees can be affected by language barriers, cultural differences, or technical issues. Although these issues are less pronounced in nearshore hiring, they are not completely absent. That's why it is important to work with nearshore providers that pre-vet language proficiency and skills
Why Choose South America for Nearshore Outsource Staffing?
As globalization and digitization continue to redefine our world, companies worldwide can now easily tap into the potential of global talent, including the rich pool of South American professionals. In this sense, South America is an ideal destination for nearshore outsource staffing for accounting firms in the US and here is why:
Cultural compatibility
South America shares many cultural values and norms with the US, such as professionalism, work ethic, customer orientation, and business etiquette. South American accountants are also familiar with the US accounting standards, regulations, and practices, and can easily adapt to the firm’s culture and expectations.
Time zone similarity
South America has a similar or compatible time zone with the US, which facilitates real-time communication, collaboration, and coordination. South American accountants can work in sync with the firm’s staff and clients, and provide timely and responsive service.
Geographical proximity
South America is geographically close to the US, which reduces travel time and costs. South American accountants can also visit the firm’s offices or clients’ locations if needed, and provide face-to-face interaction and support.
Cost savings
South America offers lower labor costs than the US, without compromising on quality or productivity. South American accountants have high levels of education, training, and experience, and can deliver high-quality work at competitive rates.
Access to a skilled workforce
South America has a large and diverse pool of talent, with different skills, qualifications, and specialties. South American accountants can handle various accounting functions or processes, such as bookkeeping, tax preparation, financial reporting, audit, advisory, etc.
Innovation and competitiveness
South America has a dynamic and innovative business environment, with access to new technologies, markets, and opportunities. South American accountants can help the firm stay ahead of the curve and gain a competitive edge in the global market.
Conclusion
The shortage of qualified accountants in the United States poses a significant challenge for accounting firms. To address this issue, firms are adopting new and strategic hiring models that offer flexibility, cost-effectiveness, and access to a global talent pool.
While each model has its advantages, Nearshore Staffing, particularly from South American countries, emerges as a highly attractive option due to its proximity, cost-effectiveness, cultural affinity, language proficiency, and scalability.
Hiring your next best employee doesn’t have to be difficult, not costly. You can have a highly qualify professional within only a few weeks if you know where to look and who to partner with. Yes, finding your offshore accountants might require some initial effort, but the potential benefits in the long run—increased productivity, cost savings, and an enhanced talent pool—can make it a rewarding strategy for your firm.
