New research from Avalara, a provider of tax compliance automation software for businesses of all sizes, has found that 84% of CFOs surveyed in the United States (U.S.) and United Kingdom (U.K.) face a significant talent shortage within their accounting and finance teams. The problem is more severe in the UK, with nearly all (92%) surveyed CFOs in the country struggling to recruit their needed finance talent compared to three-quarters (76%) of CFOs surveyed in the U.S. The survey also revealed that 47% of CFOs believe employee burnout around hours and menial tasks, as well as accounting and finance professionals changing careers were notable factors for the diminishing talent pool.
“Finance leaders must balance their company’s business dynamics while navigating unpredictable waters, given the pressures of high inflation, growing talent gaps, and concerns over an impending recession,” said Ross Tennenbaum, CFO of Avalara. “The rise of artificial intelligence will help finance leaders around the world find new ways to drive savings and help make their current teams more energized by streamlining and automating repetitive accounting and financial tasks to help manage the accountant talent shortage gap that the majority of CFOs are facing.”
Talent shortages are growing across finance functions
Eight in 10 (81%) CFOs report a talent shortage in accounting roles, which sparks concerns over the future of financial departments. What’s more, as nearly half (49%) of CFOs report the need for Financial Planning and Analysis (FP&A) expertise within their organizations, many businesses may lack the headcount for forward-looking financial operations.
The findings confirm the widening accountants shortage across both the U.S. and U.K. being driven by several factors.
Two-thirds (63%) of CFOs believe there’s a lack of experienced talent, a view supported by over half (54%) of respondents that consider today’s shortage a result of fewer people majoring in finance functions.
“The accounting profession continues to experience historic challenges in attracting and retaining qualified staff, and automation has risen to the fore in helping to address these gaps and help firms scale services,” said Jim Bourke, Managing Director of Advisory Services at WithumSmith+Brown. “Withum is actively evaluating how our staff can leverage more AI-infused technologies to help streamline and automate routine accounting tasks, focus on the bigger picture, better serve clients, and manage reduced headcounts. Already, we can see the emerging technology help our staff focus effort where it’s needed, on client-facing advisory and forward planning, and we see where AI will play an essential role in areas like financial reporting, compliance, audit, and data analysis.”
AI adoption grows amid talent shortage
The accounting and finance talent shortage has prompted many CFOs to evolve their approach to staffing, with many of these leaders looking to equip their existing teams with intelligent automation technology that will streamline work. Almost all (92%) of U.S. and U.K. CFOs surveyed agree that AI tools will help businesses find efficiencies, drive productivity, and increase profitability. These CFOs are acting on this belief, with 89% planning to invest in AI to streamline their finance functions. Furthermore, nearly half (44%) of CFOs are making immediate moves and are set to adopt AI by the end of 2023.
Of those looking to adopt AI, most CFOs (56%) seek vendor cooperation with their internal teams, highlighting the importance of third-party vendors. One in five (22%) CFOs are set to rely on outside vendors too, with fewer than a quarter (21%) wishing to build in-house AI solutions.
“AI holds transformative potential for finance and accounting. Imagine finance professionals conversing with their data as they would with an assistant. AI can act as a research and data analyst, boosting productivity,” said Vsu Subramanian, SVP of Content Engineering and AI at Avalara. “Moving forward, a strong partnership between finance and tech leaders is essential to effectively integrate AI. This will not only enhance efficiency within the finance department but also alleviate the global talent shortage in accounting. By automating mundane tasks, AI can empower teams and uncover savings. Companies that embrace AI now will stand out and reap greater benefits than those who hesitate.”
Concerns over a recession loom among finance leaders
Half of CFOs (51%) indicated that they’re still anticipating a recession and are operating in “cutback mode” in preparation for an economic downturn. When asked what sources CFOs look to for reliable indications of a recession, three-fourths (76%) responded with consumer spending. More than half of CFOs noted that the Consumer Price Index and Producer Price Index are reliable indicators of a recession (59% and 57%, respectively).
To learn more about Avalara’s 2023 CFO pulse survey findings, please click here. To learn more about how Avalara automates tax compliance requirements for accounting and finance professionals, visit avalara.com.
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