Market Trends in Practice Core Services H2 2021

There is good news to report across the labour market in general. The most recent statistics indicate that the market is continuing to recover with the number of payroll employees returning to pre-pandemic levels, and new job vacancies in the last quarter were at a record high.

The world of Public Practice has seen this echoed and, if anything, there has been an even higher demand for services in Accounts, Audit, Outsourcing and Tax.

We have also seen continued confidence in the UK professional services market with more external firms (UK and International) investing in Practices with seemingly little effect from post pandemic/Brexit economic impacts.

Outsourcing

International outsourcing has grown steadily throughout the year with seemingly few signs of businesses moving their UK entities into other parts of the EU.

There has been a real focus on UK accountants producing a more value-add and commercial service through the provision of management accounts/outsourced finance.

This has meant that some more menial tasks such as basic bookkeeping have been outsourced internationally.

Acquisitions & Investments

There has been a continued investment within the profession. Over the past six to nine months, private equity houses and other larger professional services firms have been buying up other smaller practices. For example, Gerald Edelman this year become part of the ETL Group, adding to their impressive portfolio of mid-tier practices such as SRLV and MGR Weston Kay in London alone.

Other small and mid-tier firms have received significant investment this year and are looking to grow aggressively through hiring in existing and new service lines, and through acquisition of complementary services, as they look to provide a more complete offering.

This suggests that there is huge confidence in the UK accounting market and the general feeling in the sector remains positive, as long as the skills are in supply.

Tax

Currently there is a huge demand for both private client and corporate tax candidates; with the latter having seen very little candidate movement as in general that population seemingly content in their roles or seeking to move into industry.The demand in the US/UK market is growing at a notable rate which further backs up the points around investments and the ever-growing confidence in the UK economy.

Research and Development (R&D)

In a recent Financial Times report it said that the Research & Development market in the UK continues to grow year on year (13-14% in the last 12 months).

There has been a huge amount of claims made in the software and life sciences markets and there may be many more to come in pharmaceuticals for obvious reasons that we are yet to see claims for.

Overall, the R&D market is buoyant, remains extremely positive and there is real entrepreneurial spirit in this sector with new boutiques popping up on a regular basis.

One area of huge growth with the R&D market is within the computer sciences sector. With more and more people doing technology degrees, masters and doctorates, and only so many coding jobs available, there is a shift in people using this education within other sectors.

Relocators: expectation vs reality

At the end of last year there was an anticipation that the market would see lots of relocators – specifically people who were looking to move out of London and back to their family homes in other counties and cities.

However, the new hybrid working world has made a big difference to the job market and, on the whole, the London job market is probably more popular now than ever.

Before Covid, some jobseekers were not prepared to go to London five days a week, and were therefore happy to take a lower salary in a more local firm.

But since the shift in flexible working polices, people are finding they can now consider roles in London, which offer more money and require less frequent commutes to the office. 2 days per week to commute is far more palatable than the previous expectation of 5 days a week

This increased demand in London has meant that more regional firms sadly continue to struggle to attract the best staff. Locations such as Kent, Bedfordshire, Berkshire, and Northern Hertfordshire are now competing even more with the pull of London.

Hybrid working

With the end of restrictions in September, companies have had to formalise their working policies. Bigger firms have been encouraging staff to return to the office, but ultimately leave it down to the discretion of the employee and their manager.

Smaller firms that can’t adapt will ultimately be the ones that are going to be most hit. Most firms will now have a formal policy in place that goes beyond the end of this year that will allow people to continue to work remotely where they can.

What we will find is that, if your company offers outsourced or cloud-based accounting with limited flexibility around working, questions such as ‘how can you embrace technology and get your clients to embrace the technology if you’re not prepared to do the same?’ will be raised.

International relocators

As borders reopen, we are seeing early signs of an influx of Hong Kong nationals on BNO visas coming to the UK. Many of these professionals have Audit experience so this is likely to have a positive impact on the market.

Salaries

Overall, salaries have crept up over the past 18 months, but not significantly. For more detailed salary information download our latest salary guides below:

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