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Small firms must bite the bullet on technology because migration alone will fail to solve the chronic skills shortage.
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Why cloud tech and AI hold the keys to attracting talent
02 February 2024
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The government’s changes to skilled migration will not be enough to arrest the structural issues that are leaving the professional services industry with a deep and chronic skills shortage and an unhappy workforce.
We’re seeing attention shift from the industry’s HR managers to its technology experts as company leadership looks to tech investments. Specifically, decision-makers are eyeing a combination of generative AI and cloud infrastructure to ensure the talent the industry already has stays happy while operational efficiencies are secured.
Many in the professional services industry are still breathing a sigh of relief from the government’s 10-year migration strategy. The centrepiece of the strategy is the Skills in Demand Visa, which aims to better connect in-demand professions with the right employers in Australia.
Professional services is one of the most, if not the most, in-demand careers in Australia. As a result, many in the industry have been looking to the migration strategy with some optimism that it might finally solve the talent problem.
Unfortunately, that position looks too optimistic. According to the ABS, Australia will need 338,362 accountants by 2026 – almost 10,000 extra a year. That is a substantial and sustained shift in the percentage of Australians and overseas migrants who view professional services as an attractive career.
While the industry will receive some relief from the shift in migration policy, it will take some time for those changes to filter down. Meanwhile, the structural issues driving the staff shortage remain.
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As reported by Accountants Daily, top talent is frustrated by work pressures and inflexible hours. Highly skilled workers are switching to data and finance jobs, known for their legendary flexible work arrangements, thanks to better pay and conditions. Industry bodies CA ANZ and CPA Australia alluded to this reality in their submission to the government late last year.
“Even accepting the conservatism of the official (ABS) forecasts, in round figures, the growth represents another 31,000 new jobs in the profession over the next five years, and 58,000 over 10 years. Add to this those who retire or otherwise exit the profession or leave the country, then the number who need to enter the profession or the country to meet replacement and new demand is clearly large,” the industry bodies said.
The reality is the professional services industry is shedding talent to competing sectors and will continue to do so unless it closes the gap. That means investing in technology and there is a reason to hurry.
The recently released CA ANZ annual pay survey found 45 per cent of members with experience of five years or less won a pay rise of 7.6 per cent or above in the past year.
The professional services sector has consistently lagged behind other sectors when it comes to modernising its IT infrastructure. This is where a lot of its inability to compete on flexible work arrangements comes from because outdated IT infrastructure means you’re less able to deliver remote access, collaboration tools, data accessibility and strong cyber security.
Managers therefore need to keep everyone in the same place as much as possible. But skilled workers want more workplace flexibility. The data also indicates this is especially true when it comes to workers with young children or those from diverse backgrounds. Most migrants are young, want a family and of course, have diverse backgrounds.
Finally, poor IT infrastructure investments mean your technology team can’t scale the business quickly when demand increases. This is one of the biggest challenges our professional clients have faced over the last few years as demand for their services has grown. As firms expand, improving operational efficiency, protecting data integrity and responding to evolving cyber threats become paramount. If you don't take a cloud-first approach, costs explode, things become unworkable, and talent leaves.
When it comes to generative AI, the situation reminds me of the Goldilocks story. Everything is either too cold or too hot.
With the too cold, most firms are missing a trick when it comes to their slow integration of AI into operations. Embedding technologies such as AI capabilities can help firms analyse project data, financial metrics and client feedback to uncover hidden patterns and trends to inform strategic initiatives, improve resource allocation and, ultimately, drive profitability. It also makes the job of your overworked staff easier.
But on the too-hot side, other firms don’t have a foundation on how to use AI and are flying into it solo without taking counsel and thinking it through. We’ve seen a few examples of companies jumping the gun, adding to the confusion and cyber security risks. This ultimately doesn't help staff but is just another tool to use.
Smaller firms must get it right but they “remained cautious” according to surveys by mid-tiers. That is not sustainable in the race for talent.
Thankfully, when it comes to generative AI and cloud infrastructure, actions from the government have been much more encouraging for the professional services sector than the announcements on migration. Its recently announced generative AI strategy has taken a pragmatic approach that was embraced by industry stakeholders, including the Technology Council of Australia. Firms should feel empowered to embrace the technology for their own devices.
Meanwhile, the government’s Cyber Security Strategy, announced late last year, has made provisions for small operators, which will help a broader push to upgrade IT infrastructure. Any firm will also slash risks to reputation and business continuity by taking a proactive approach to cyber.
Professional services firms can make their industry a much more attractive proposition for generations of new talent that’s about to come through our borders and universities. Doing so will require a big upgrade in the technology that underpins it, but it will also ensure the sector is not reliant on decisions from Canberra.
Shane Maher is managing director at managed services provider Intelliworx.
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