IS 331 Professional and Workplace Communication : Accounting Labor Mar

You may use news media in addition to peer-reviewed journals from databases such as ABI-PROQUEST, EBSCO and

Introduction:

The purpose of this assignment is to provide an overview on the accounting labor market in Australia. The study also analyzes about the performance, characteristics and career potential of the accounting labor market in Australia.  This study is to identify nature as well as structure of Australia’s accounting industry in terms of income, expenditure, employment and its total contribution to the Australian economy. The Australian accounting sector mainly comprises of entities that are engaged in provision of auditing, bookkeeping and accounting services. The services that are provided by the entities cover certain areas of financial reporting, auditing and taxation. Large number of entities offer business advice as well as assistance for the aforementioned services. In fact, global financial crisis served as antidote in the accounting sector since crisis caused more persons to seek the accountants help for identifying as well as adopting cost-cutting measures. At present, the majority of companies in the accounting sector of this nation are mainly small in size. The non- employing establishments presently accounts for near about 50% of the sectors enterprises, which means less number of laborers are working in this industry (Thomason & Ward, 2012).

The Accounting labor market in Australia: characteristics and career potential

Characteristics of the Australian accounting labor market

Present situation of the accounting labor market

The researchers have found out that the supply of the accounting laborers general exceeds demand. The advertised positions of accounting has attracted huge number of candidates who are qualified by degree. There are few instances that reflects that the employers of few firms cannot select their candidates as they are not suitable for the selected post in accounting firms. Moreover, such firms usually avoid to select such candidates in their company as such people have inadequate experiences, do not match the position requirements and thus have bad communication skills. Since then, the employers of this industry in Australia select less number of candidates for the accounting services. In the year 2017, every surveyed employer in this industry attracted candidates for its accountant vacancies. The researchers have found out that near around one third of the employers in accountant labor market attracted more than 40 applicants. However, the competition in the accounting market was stronger in the metropolitan areas as compared to regional areas. In addition to this, the accounting industry in Australia has been experiencing rapid change in technology over the last few years. Even the accounting entities are offshoring its accounting work, which were undertaken by the laborers in the past (Howieson et al., 2014). Recent evidences reflect that the accountants of this country are mainly expanding into diverse activities.

Employment in accounting market

Since the accounting enterprises are broadening its range of services that is far beyond the traditional offerings and the businesses are becoming highly data- oriented as well as analytical, different types of workers are entering this market along with other business graduates. The accounting entities are providing services outside traditional accounting services but such entities are presently finding it difficult for searching candidates with right experience as well as knowledge. But still there is no shortage of accountants in this country and the wage pressure is also lower as compared to other states (Guthrie, Burritt & Evans, 2012). The hiring of laborers in this industry increased by near around 3.8% and the wages of this industry also grown at lower rate by around 3.4%. The accounting labor market offers huge opportunities for the new entrants. Even though overall concentration in this industry is low, accounting market provides significant barriers to other new entrants (Blackmore, Gribble & Rahimi 2017). As the accounting industry in Australia is more labor – intensive than capital- intensive, the new accounting practices in the organizations do not bear high cost for the start- up.

Research Findings

The findings of the research reflects that in the year 2017, almost every organizations in this industry have attracted applicants while recruiting for accountant. In comparison with previous years, near about 7% of the employers surveyed across every occupations did not attract any candidates for the vacancies. Since the year 2009, there has been large number of candidates for the accounting vacancies. In the year 2017, the average number of candidates per vacancy was 36.8 as compared with 13.5 for assessed professions and 14.3 across assessed occupations. Over the last few years, the competition of accountant in the accounting labor market has been relatively strong even though employers in the metropolitan areas have attracted significantly larger fields of candidates than its regional counterparts. Recent evidences reflect that the metropolitan employers in Victoria and Western Australia have received higher applicants per accounting vacancy as compared to regional employers. In the metropolitan areas, near around 79% of the accountant vacancies have been filled while 74% of vacancies have been filled in the regional areas. This highlights that the competition of the accountant laborers have been higher in metropolitan areas of this country as compared to regional areas. Böckerman and Vainiomäki (2013) found out that the inequality between the filling of vacancies in metropolitan and regional areas have been more prominent in Australia as compared to other nations.

Figure 1: Disparity between accountant vacancies that are filled in regional and metropolitan areas in Australia during the years 2013-2017.

Source: (Evans & Poullaos, 2012)

The above figure reflects that the total proportion of accountant laborers vacancies filled have fluctuated over the last few years. The labor market researchers have found out that considerable proportion of the accountant laborers were considered as unsuitable despite holding proper qualifications. In the year 2017, 81% of the qualified accountants were considered as unsuitable, which in turn resulted to huge competition in the accountant labor market. The employers in this industry often said that lack of proper experience as the main reason behind which the accountant individuals were considered unsuitable. The researchers have found out that the individuals applying for the accountant vacancies usually lack experience in particular areas that involves- taxation or any other general experience. In fact, large number of candidates lacked proper communication skills that are required to liaise with the clients. In fact, the researchers have reported that accounting graduates are lacking skills, which the employers have been seeking (Van Akkeren, Buckby & MacKenzie, 2013).

Demand and supply of accountant laborers trends

There were near around 189,100 accountant laborers employed in the year 2017. Peichl, and Siegloch (2012) found  out that employment has increased by about 15.1% over the last five years. This reflected that the employment rate in this accounting labor market has grown double across the occupations. In fact, the accountants were employed across the industries. In the year 2016, near around 48.2% of the accountants were employed in Technical, professional, scientific services, about 10.9% were employed in the financial services and 5.7% were in the public administration and manufacturing services. In addition to this, the total number of vacancies for accountants have decreased considerable since the year 2008, but this have stabilized in the past five years. There were around 4.7% vacancies advertised for the accountants on the internet over the year 2017 as compared to the year 2016 where the advertised level of vacancies were around 60% below peak demand period to mid of the year 2008 (Carnegie, 2014).

Career potential 

The labor market research on accountants in Australia reflects that there are certain courses that satisfy the entry requirements to accounting profession. Recent evidences reflect that the total number of the domestic students in accounting course completion has not changed over the past few years (Evans & Poullaos, 2012). The total number of students completing postgraduate degree as well as specializing in accounting has been significantly larger than that of domestic cohort. In fact, foreign student’s completion of accounting course peaked in the year 2011 with around 16,600 foreign graduates as compared to 7600 domestic graduates.  Recent facts also highlights that in the year 2015, for all the students residing in Australia who have qualification with specialization in accounting, there were double the foreign students.

Although the accountants have higher career potential with respect to other profession, the career potential for accountants has been low for the last few years in Australia (Poschke, 2013). There has been evidence of accountant surplus at entry level along with the graduates experiencing less employment outcomes as well as low pay rates. In the year 2016, the starting salary for the domestic accounting graduates was $53,500 below the total average for other graduates of $57,800. The employment outcomes for the accountant graduates declined slightly since the year 2008, with around 76.2% in full- time employment in the year 2016. The GOS( Graduate outcome survey) in the year 2016 reflects that near about 76.2% of the accounting graduates were working for full-time. While the total proportion of employed accounting graduates was stronger than average undergraduate graduates degree, the outcome of employment are 12% lower in comparison with the year 2008. The matching of occupations for the accounting graduates has been relatively poor. In the year 2016, the persons who found full- time job, near around 52.3% have secured jobs as accountants and 8.4% as company secretaries and auditors. On the other hand, 20% were mainly employed in the clerical as well as administrative positions in the accounting enterprises. Li (2014) recommends that the foreign students who mainly graduate with the Australian degrees are however experiencing high difficulty in searching for any kind of entry level accounting jobs owing to supply of foreign accounting graduates that exceeds the available jobs. Some of the employers also considered tertiary training as insufficient and unaligned with the requirements.

McDowall, Jackling and Natoli (2012) opines that being an accountant was one of the safest career choices in Australia. But for the last few years, the career potential for accounting students in Australia has become poor. Lack of Australian students interest in accounting came as the federal government as well as accounting bodies have argued over that the accountants finds it hard to find a job. While Australians have been deserting accounting profession, huge number of international accounting students has increased and thus prompting fight between government and accounting entities about the total number of required accountants (Chan & Ryan, 2013). The total number of Australians that are studying accounting has declined  to 20% since the year 2001 and hence the international students are vastly outnumbering the local graduates (accounting today.com, 2018).

The accounting industry in this nation has been experiencing rapid change in technology and thus the accounting nature of work is evolving at present years. Since more administrative as well as repetitive  tasks has become automated, rising proportion of the accountants workload involves communicating options and analytical thinking for persuading others to take certain action. Recent evidences have highlighted that the accounting entities are offshoring its accounting work and thus hires less number of accountant in the market (Sin, Reid & Jones, 2012). However, the employers are now-a-days seeking accountants with their transferable skills as they have to work in diverse business areas (Leong & Kavanagh, 2013).

Conclusion:

From the above discussion, it can be concluded that accounting is the most regarded careers in business world. The current economic challenges reflect that the accountants are vital for the businesses for meeting the requirements of the business environments. In fact, in case of economic downturn, the accountant in Australia helps the enterprise to improve its business operations with their knowledge. They also assures that organization are profitable as well as financially efficient. In Australia, the career potential for accountant has become low as compared to other profession. The main reason behind this is that the accountant graduates in Australia are facing difficulties to find a job in this nation and are also paid less as compared to other graduates. Moreover, the international students are pursuing accounting as career options more than domestic students in Australia. This is because accountant in other nations have huge career growth with respect to that in Australia. The international students are facing tough competition in the accounting labor market of this nation as the Australian employers mainly prefer domestic accountants to foreign accountants.

References:

accounting today.com (2018). Majority of Australian accounting students are foreign, face tough job market. Retrieved from <https://www.accountingtoday.com/opinion/majority-of-australian-accounting-students-are-foreign-face-tough-job-market.> online. [accessed on 26^th August , 2018].

Blackmore, J., Gribble, C., & Rahimi, M. (2017). International education, the formation of capital and graduate employment: Chinese accounting graduates’ experiences of the Australian labour market. Critical Studies in Education, 58(1), 69-88.

Böckerman, P., & Vainiomäki, J. (2013). Stature and life-time labor market outcomes: Accounting for unobserved differences. Labour Economics, 24, 86-96.

Carnegie, G. (2014). Pastoral accounting in colonial Australia: a case study of unregulated accounting. Routledge.

Chan, H. T., & Ryan, S. (2013). Challenging stereotypes: International accounting students in Australia. Journal of Modern Accounting and Auditing, 9(2), 169.

Evans, E., & Poullaos, C. (2012). A brief history of the various pathways to the accounting profession in Australia. Emerging pathways for the next generation of accountants, 3, 16-26.

Guthrie, J., Burritt, R., & Evans, E. (2012). Challenges for accounting pathways in Australia in 2012: an introduction. Emerging pathways for the next generation of accountants, 9.

Howieson, B., Hancock, P., Segal, N., Kavanagh, M., Tempone, I., & Kent, J. (2014). Who should teach what? Australian perceptions of the roles of universities and practice in the education of professional accountants. Journal of Accounting Education, 32(3), 259-275.

Leong, R., & Kavanagh, M. (2013). A work integrated learning (WIL) framework to develop graduate skills and attributes in an Australian university's accounting program. Asia-Pacific Journal of Cooperative Education, 14(1), 1-14.

Li, I. W. (2014). Labour market performance of Indigenous university graduates in Australia: An ORU perspective. Australian Journal of Labour Economics, 17(2), 87.

McDowall, T., Jackling, B., & Natoli, R. (2012). Are we there yet? Changing perceptions of accounting as a career preference. The International Journal of Learning, 18(4), 335-352.

Peichl, A., & Siegloch, S. (2012). Accounting for labor demand effects in structural labor supply models. Labour Economics, 19(1), 129-138.

Poschke, M. (2013). Who becomes an entrepreneur? Labor market prospects and occupational choice. Journal of Economic Dynamics and Control, 37(3), 693-710.

Sin, S., Reid, A., & Jones, A. (2012). An exploration of students' conceptions of accounting work. Accounting Education, 21(4), 323-340.

Thomason, R., & Ward, D. (2012). Contemporary professional pathways: CPA Australia. Emerging Pathways for the Next Generation of Accountants, 3, 57-64.

Van Akkeren, J., Buckby, S., & MacKenzie, K. (2013). A metamorphosis of the traditional accountant: an insight into forensic accounting services in Australia. Pacific Accounting Review, 25(2), 188-216.