The Wize Way

Episode 122: The Labor Shortage Tsunami - Are You Prepared?

• Wize Mentoring for Accountants and Bookkeepers • Season 2 • Episode 122

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In this special episode of The Wize Guys Podcast, Brenton Ward and Jamie Johns tackle one of the most pressing debates facing accounting and bookkeeping firms today: the future of work.

As demographic shifts, remote work, and offshoring reshape the landscape, traditional hiring methods are falling short. Jamie highlights the growing labor shortage and why firms must adapt or risk being left behind.

They discuss how offering flexible work arrangements and embracing technology can give firms a competitive edge. With real-world examples and practical advice, this episode is a must-listen for anyone looking to future-proof their business.

Don’t miss out on these insights to help your firm thrive in a rapidly changing world!

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PS: Whenever you’re ready… here are the fastest 3 ways we can help you fix and grow your accounting firm:

1. Download our famous Wize Freedom Strategy Map for FREE - Find out the 96 projects every firm owner must implement to build a $5M+ firm that can run without them - Download here

2. Need to Hire right now? Book at 1:1 FREE hiring assessment with our WizeTalent recruiters to help find your next best employee locally or offshore – Click Here

3. Book a 1:1 Wize Discovery Session – Spend 30mins with our Wize CEO, Jamie Johns, a $7M firm owner who is ready to give you his entire business plan to build a firm that can run without you – Find out more here

Brenton Ward:

From Wize Mentoring is The Wize Guys Podcast, a show about accounting and bookkeeping practice owners and the many stories, lessons, and tips from their experience of transitioning from a time- poor practice to a business that runs without them. I hope you enjoy and subscribe.

Jamie Johns:

Hi, Jamie Great to see you again. How are you? Yeah, good Brenton, good mate, Going really well.

Brenton Ward:

So today I want to talk to you about a topic that seems to be popping up quite often in our Wize Talent recruitment agency at the moment, and that is around the debate of having team members work from home or coming back in and working more permanently from the office and anything and everything in between that.

Brenton Ward:

So we've come up against a few circumstances recently where firms looking to hire locally are trying to go the traditional path of wanting someone in the office, you know, five days a week and coming up against quite a few challenges in their hiring process or finding someone. So I want to unpack that with you today because you're obviously hiring through Wize Talent and also hiring for Sky, pretty much on an almost permanent basis these days. I want to look at it from two sides of the conversation. First, unpack the recruitment side, what are the implications of that decision? And then also look to once the team members are in managing a team and some of the things that you've come up against over the last few years since we've had this whole shift in hybrid remote working. So we might start with the recruitment side of things. What are you seeing both within Wize Talent and in your own firm at Sky, as what are you seeing around this topic and what's kind of bubbling to the surface for you talking to firm owners?

Jamie Johns:

Yeah, it's a really great and pertinent topic, Brenton, because look, just to give you context, there's a tsunami, I believe, coming all right. So, without being too dramatic, I think there is a tsunami coming, good way to kick off the podcast yeah good way to pick the podcast off, that's right, but look, the reason there is is there's probably around.

Jamie Johns:

You know four or five big mega trends if I can call them mega trends because I'm always reading. You know four or five big megatrends if I can call them megatrends because I'm always reading. You know what's happening in our industry and related industries, but you know, one of them is what we call population collapse. You know. So population collapse, or the fertility rate in Australia and Western developed countries, has been dropping. You know, I think it's been dropping since probably, you know, the 1950s and 60s, and essentially what that means is we're not replacing the people that are passing on, and particularly in the developed countries.

Jamie Johns:

It just means that the elderly population is becoming demographically more than the younger generation. So what does that mean in a practical sense? It essentially means in a successful economy there are less people to do the work. So it's a little bit like a wedge. You know, at the top of the triangle you've got, you know, a big majority of the population which are more elderly. Then in the middle, you know, you've got your sort of typical 40s and 50s population or that demographic is less, and then as you go down from 40, 30 in the 20s, there are just fewer people, and you can do your own research on this. That's happening in a lot of western developed countries. South Korea's got a real problem with it, you know, Australia is no different, and the USA, and so what our governments have been doing is really making sure that skilled immigration is ramped up to fill the labor gap so that's sort of one of the things population collapses, you know Elon Musk said it's one of the biggest challenges of the 21st century.

Jamie Johns:

So again, you can look it up yourself. But it's a little bit of a silent killer like people don't talk about it.

Brenton Ward:

Brenton, it's a really interesting one and you, you know pass on the stories that you're reading on this topic and it seems like it's starting to pop into mainstream news a little bit more regularly at the moment, this topic of population collapse. But for most people you know the rhetoric you know I would have heard for the last 10 years is that the world is overpopulated and there's going to be too many people on earth. And so what you're saying there is you know, the likes of Elon Musk is saying it's actually.

Brenton Ward:

The issue is the opposite. We don't have enough people.

Jamie Johns:

We just simply don't have enough people to do the work. You know it has labor impacts, it has economic impacts. So you know that's one of these waves that is coming and it's arrived but it's probably getting bigger. The other sort of three things I think the other ones is that in Australia at least you know you can look it up in the Finn Review, but there's about the finn review have done their research for the Australian Bureau of Statistics and there's about five trillion dollars worth of assets to transfer to the next generation in the next 10 years from now onwards.

Jamie Johns:

So you know, if you think of $5 trillion, you know property, businesses, securities, you know all the main asset sort of allocation areas when that transfers, that's work. So you know you need tax lawyers, lawyers, you need succession planning, tax calculations, you need new entities. So I think what you'll see with that five trillion dollars transferring is a massive demand on lawyers and accountants and bookkeepers, you know. So you're going to see demand be as strong as it ever has in compliance and in the professional services that we do. So that's really the second one to give you context to this discussion. The third point is I think the average age of a registered tax agent is around 55.

Jamie Johns:

So, you can look that up yourself. No transcript was in accountants daily. The other day I read an article that and I've seen in the USA as well that in the last three or so years commerce graduates have dropped off you know by about 40. So it's not cool to be an accountant anymore in public practice right?

Jamie Johns:

So if you take all these four waves together, what you're simply looking at is demand and supply. So essentially, there's going to be a massive demand for professional services in our industries, but the qualified people to supply the advice will be less and less. And so, you know, that's where there's evidence of wages in our industry outstripping inflation as well. And you know, I was on a webinar the other day with Ignition. I think it was 58% of the poll or the respondents said that they've got issues with profitability or they need to know how to increase their profitability. And you know the other thing I'd say, Brenton, we've already sort of seen this in the financial planning industry in Australia where, since the Royal Commission of Financial Planning, lots and lots of financial planners have left the industry and the cost of compliance for financial advice has just gone up.

Brenton Ward:

Yeah, it almost had the opposite effect of what the government wanted.

Jamie Johns:

Yeah, so that's what I'm sort of seeing globally and within my own firm. Wize Talent is helping firms find it difficult to find the right staff. And the other thing is Brenton. We've seen a massive growth in offshoring, haven't we? Like over the last 10 years, and so there's been lots of firms who really, really push back against offshoring or hiring overseas to get their work done. And then you know, I've had people come to me just said, look, I simply need capacity, I need staff to get the work done I think we're certainly moving.

Brenton Ward:

You know, if we were sitting here five or six years ago, only we were still in that sort of early adopter phase of offshoring. I mean, you're a very early adopter of it at Sky. So even if we have moved into that sort of early majority phase now, there's still a whole lot of firms out there that haven't copped on to the offshoring that will want to over the next couple of years, certainly with this issue as well, which makes that supply-demand tension in that space as well, but it's supply and demand there as well, and then the sort of other flow-on effect.

Jamie Johns:

What we're going to discuss is when you don't have people in the office. It's like, well, how can people work successfully from a remote location? And so if you're not afraid or familiar with, you know team members working remotely, hiring can then become a real challenge in a pool that's getting smaller, you know.

Brenton Ward:

Yeah of talent. Yeah, so let's unpack the hiring piece for a little bit because there are a couple of layers to this issue that we've seen working with firm owners and it doesn't matter. It's like country agnostic, it doesn't matter what country we go to. These layers exist and the problems that firm owners are facing are the same, the first one being that they're not looking at these bigger picture problems they're not aware of them not aware of them.

Brenton Ward:

So their outlook on hiring is how it was for the last 10 years okay, we're busy, we need to find the next accountant or bookkeeper, put the ads in the papers and the online job platforms, and why aren't we getting anyone?

Jamie Johns:

Apply to our roles and that's what's happening. You see, like traditionally, you know you'd whack an ad on seek and you'd have a heap of candidates and you know, a few years ago you'd fulfill the role relatively quickly. But what's happening now is, with that traditional, you know you must come into the office model. Depending on the sort of where you are in regional or suburban Australia, those roles are then taking longer to fill. The firms that are offering flexibility, the firms that are offering a hybrid model of employment, not requiring you to know their team to drive to work every day or have a mix or totally at home or a hybrid of remote, they're the ones that are winning. They're the ones that are getting their hires fulfilled first and ever since COVID it's changed the game. You know it's really changed the game and we saw a lot of.

Jamie Johns:

You know housing prices in regional Australia go up. You know I was only talking to a chap today that you know it's getting harder to sell commercial property. It's just a reality of the times and you know we had Elon Musk bring out Starlink, and so you know you can work from anywhere these days. It doesn't matter if you're in country Victoria. You know you can basically get 250 megabits a second. So you know, then we've got Zoom and Microsoft Teams and has those tools. It's really making it less attractive for candidates and applicants to actually come into the office, and you want them to work there five days a week, yeah. So it's all about being attractive. You know like you need to be an attractive firm to work at and you know that's sort of where it starts, particularly with the marketing with candidates.

Brenton Ward:

So if we can look at a couple of specific scenarios that we faced recently, just to provide context and have firm owners relate to these situations, because if we look at offshoring, obviously offshoring is going to be remote because they're in a different part of the world. So we kind of accept that, you know, we accept that those positions are going to be remote and most in most cases those positions aren't client facing or client interactive in most cases. So the roles that we have been coming up against, these debates about remote versus in the office, a client manager or client facing roles. Now the comments that we're getting over and over again is, you know, our firm's different. Our clients wouldn't take that, you know. They need to know they can come into the office and see people whenever they need to see them.

Brenton Ward:

And again, it's this kind of previous times thinking and you've had to have a couple of blunt conversations with firm owners to, you know, bring them into current reality. Can you have those blunt conversations with us owners to bring them into the current reality? Can you have those blunt conversations with us now? So, anyone who's going through this thinking, listening to this, you need to hear this.

Jamie Johns:

Yeah Well, the thing is, Brenton, the world has changed. That's the whole point of what we've just discussed. The world is changing and the world will continue to change, and we've all seen the rise of AI, and I'm blown away when I speak to Chat GPT and how it responds. So the first thing is you've got to realize that if you don't move with the times, you'll get left behind. I think that's the first thing. To say that it's a realization that things are changing fast, and I think they often change faster than we even realize. So it's important to keep abreast of these big mega trends that are happening so that your firm can really adjust the sales and ride where the waves are going. Because while you've got those challenges, Brenton, the next 10 years, I say, is a gold rush. The next 10 years is really a gold rush for bookkeeping and accounting firms who are really organized, are well managed, know how to hire staff and I'd say, really important to know how to keep them so, in the sense of working remotely and offering competitive packages and making jobs look attractive.

Jamie Johns:

A lot of the pushback we get is around well, I need this particular person to be at the desk and training the other staff. That's a very rigorous argument. A lot of people put forward that Mary needs to be at the desk next to their colleagues to train them. And look, I really reject that. The reason is that often when you're actually sitting at the desk and showing someone, most of the time the training never gets recorded, right, so the training never gets recorded. But if we're remote as we are I'm here in Australia, and you're in Ireland we can record this and I can share my screen and I can show in super detail right, because you want to micro train and not micromanage but I can show anyone in super detail and record it exactly what to do, right? So that argument really flies out the door.

Jamie Johns:

I think when people raise that brand, they're more just addressing a symptom or a fear and not an underlying problem. And often the underlying problem is that they just don't trust the person being at home. It's sort of like we talk about having hygiene over health. You can do timesheets, and you can have all the policies in the world, but if the person that you've hired underlying or the health, is not trustworthy or has integrity, then you've got to question why you're hiring them in the first place. Because what I found is someone is good at the office and does a great job. The office turns up on time, does their timesheet, and does all the things correctly from an integrity and honesty point of view around accountability, and turns up the meetings. That same person will do the same thing at home you know, 99 of the time.

Jamie Johns:

But if you find someone that's at the office you know is always late, tardy, or late for meetings doesn't really contribute. Again, it'll probably just exaggerate that when they're at home. So true, yeah. So my experience is particularly around that argument that you need someone there at the desk in the office to train them. It just doesn't hold water because of that underlying integrity. If you can hire someone and let's not forget the three pillars to hiring Brenton if you look at a pyramid, the biggest base on the bottom bit is integrity and honesty, and the next one is energy and responsiveness, in the middle of the triangle, and the smallest bit at the top, at the tip, is the skills and experience. That's how Warren Buffett hires the richest guy in the world with one of the biggest, a fantastic business, Berkshire Hathaway, that owns many businesses. That's literally how they hire. So if you're hiring upside down and just focusing on the skills and experience but you're not focusing on the honesty, integrity, you know, without saying it bluntly, like you've got it wrong.

Brenton Ward:

Yeah.

Jamie Johns:

So that first argument about you need to be in the office, it just doesn't hold water because I know for myself I've worked from home over five years I'm actually involved in, I think, five or six different businesses these days, including recruitment. You know yourself, Brenton, that we've both trained people internationally and in other countries who deal directly with the clients. You know, like Dani from Wize Talent, for example. Classic example. She talks with clients every day, but you know, we've really micro-trained her to do her job, so you know. So there's a classic example.

Brenton Ward:

To touch on Dani as an example. This is someone who's in Kyabrum, so for anyone around the world, kyabrum's, this tiny little country town in central Victoria. If we were saying we only wanted a Dani in the office in Melbourne with yeah, with Jamie, we would never have come across Dani, and she's one of our star players at Wize absolute star and the key.

Jamie Johns:

There were just micro- train people. So it just doesn't hold water that you need people in the office to train them. It really doesn't hold water. And you know so I'm quite passionate about it because, like it's just one of these things that you know, that I've lived, I guess. So as long as the person's got honesty, integrity, you know they're energetic and really it's unlimited what you can train someone on computers.

Brenton Ward:

I just want to pull out a couple of things that you said there because I think it's important to touch on. And there's an underlying issue here and it's not we need them in the office because our clients want them in the office. It's something you said there where it's actually our lack of feeling of control over that team member because if they're in the office we can see what they're doing and you know, we know that they're at their desk and we know they're working, as opposed to this like feeling of not knowing what they're doing and are they even working, and because they're in a different location. How do you get firm owners to get over that? Because I'm assuming it comes back to. Well, it's actually the systems and the processes that you wrap around the work environment to remove that sense of I'm not feeling in control of my team anymore to answer that question is Brenton.

Jamie Johns:

It's good delegation. You know, good delegation is the key, whether you're in the office or remotely. You know, if something's not working remotely, then it's only an extension of something that would typically not work in the office. One of the things where firms fall down with this is setting clear KPIs, like setting clear, measurable KPIs that identify when the person is working well or when they're not working well. But if you don't have those goalposts, you will tend to act out of fear and you'll tend to micromanage like you'll be checking oh, is this done yet? Is this done yet? Is this done yet? Whereas know, whereas good delegation, it avoids micromanaging and, with micromanaging, becomes fear. So I think, as a leader and as a manager, you need to learn how to manage and learn how to delegate effectively by really sort of three steps. One is to set clear goals. This is the target in your role. This is what we expect. Clear goals, this is the target in your role, and this is what we expect. The second step then is to coach and mentor them, using the skills they've got, on how to achieve those goals, and so not to abdicate but to delegate effectively. And then, sort of thirdly, get out of the way. I say get out of the way because it can be very tempting just to continually contact and, you know, just annoy the person when they're just trying to get on with the job. So the sort of three steps there I'm shortened of how to delegate effectively. But you know, like I was talking to someone the other day, Brenton, they don't have budgeted hours for any jobs, and then we heard of staff pushing back and saying, oh no, we don't, it's too stressful having budgeted hours for my jobs. So you sort of hear all these different angles. So that's sort of really the piece around the argument that someone needs to be offered so that the other staff can train them. And then, of course, Brenton, the other key stakeholder in our businesses is the clients. Yeah, so we'll tackle that one.

Jamie Johns:

And the argument there goes is the person needs to be in the office because the clients come into the office all the time, they have meetings in the office all the time, and that type of thing. And look, at the end of the day, it comes back to educating your clients on how your business runs. And, provided the service levels don't drop off, you're fine. There are lots of firms these days, Brenton, that we meet that don't even have a physical office. They're doing millions of dollars, hundreds of thousands, millions of dollars, and they don't have a physical office.

Jamie Johns:

I think the argument there, Brenton, that we've seen is that our clients are used to seeing staff face-to-face in person. So you need to be in the office because we need to discuss very technical, detailed tax strategies, for example. That was one I read the other day. You know, tax strategies, for example. That was when I read the other day, you know. So does that argument hold? Is it watertight? I would say it isn't on the proviso. That I think. Sometimes, particularly with a senior client manager or client managers, it's nice if they can meet the client once off in person. In saying that doesn't really hold water, like some of the largest clients that I've dealt with over the years throughout Australia, even at Sky Accountants, I hadn't met them for two years, you know. So, yeah, our marketing would work and we'd get a lead. The lead turns out to be, you know, 10, 20, 30. You know one case, I think you know it ended up being one of our biggest clients and a $100,000 fee and we haven't met the client until 12 months into the engagement.

Jamie Johns:

The demographic is important, Brenton. Like, if you've got a lot of elderly clients, for example, and they can't use the computer, well, you know that will change things, then yeah, that will change things 100%. But you know, know, as a rule of thumb, most people I've dealt with under 50 know how to jump on Zoom. You know I give away my age but, yeah, like most people will jump on Zoom. And provided your office has got great technology, that's another thing. Like if you, going down this path, make sure you invest in good technology where you know, in your boardroom, for example, you know you've got a screen that you can project to. You want to make sure that you've got a microphone that everyone can hear. So you just need these little key aspects around remote working, if a client manager is working from home that everyone can see and hear clearly.

Brenton Ward:

Yeah, I think that's an overlooked thing and it's so easy to solve because anyone who has had a bad experience in the virtual world it's typically down to the camera glitches all the time or they can't hear like that. Yeah, that's right, they can't hear audibly very well, or that's where it becomes frustrating. You know, you've got a good headset on, we've both got good cameras and they combine probably cost 200 bucks, you know, yeah that's right.

Jamie Johns:

Yeah, the days, the, the technology, that where it was too expensive is gone, you know. So, yeah, provided you've got great technology if you do have an office, that if the clients do want to come to the office and there's, you know, an office manager there, for example, and the client manager doesn't need to be there. The technology is a massive part of the solution. Yeah, you know, as long as you've got someone in the office to help, you know how to set it up, you know. So our office managers will go in and they're just trained to know what to do and have it tested before the person arrives and all that sort of thing. So that's if someone does go to the office.

Jamie Johns:

And the other reality is too, Brenton, most of the communication with clients a lot of the time throughout the year is done on the phone. The argument that goes on that says you know well, you need to be in the office all the time and you know, in reality, I would say a lot of accounts communicate with their clients on email you know, which is overused and also on the phone, because that's a great way to communicate what you're trying to get across no-transcript and send them out or email them as well. So you know. But you know I will take the point that if clients are elderly clients, it can be more difficult with the use of technology. But as time goes on, you know, our kids are born with, not born with. But when our kids go to school, and you know, computers are just taught from day one, aren't they?

Brenton Ward:

And as the years go, on it's just, you know, it is like second nature and if we come full circle back to a firm owner sitting there going yep, I understand that. I understand the's here. I need to have a look inside my firm, but I'm still sitting here, frustrated in the hiring process. I'm looking for someone locally. I'm looking for a new client manager. We can't keep up with the work that we've got. What are you saying to them to walk away from this and take action?

Jamie Johns:

Yeah, open your mind up and put your job advertisement in it, so that the person can work remotely, that they can work from home. Save travel time, save cost. You know, just you know save rent you know, you can save rent.

Jamie Johns:

You know it's so like there's so many benefits from working remotely and just look at what you're fearing. Look at the health over the hygiene, so you know if there's someone in the office that you know you're going to trust when they're in the office but you can't trust them at home. I just question why one would think like that. You should be able to trust someone anywhere and that's what you're after when you hire honesty, integrity piece, energy, and responsiveness and look at the skills and experience.

Jamie Johns:

Last, but you're just going to be a reality of the territory these days, over the next 10 years, that firms that are offering working- from- home arrangements will win over the firms that just strictly want the person in the office. That is what I believe the reality is and you can test it for yourself. You know the industry is just going to be more competitive as the demand for our services increases, but the people that can supply those services and do it professionally will be limited. So it's simple demand and supply. So it's move with the times. Offer your jobs where they can work from home and then if you embrace the change and you can manage that change, your firm will win in the end yeah, love it.

Brenton Ward:

I think we'll leave it there, Jamie, I think that's um unpacked a good few of the layers in that conversation, so I hope everyone's gotten value from that conversation. If you are still finding yourself frustrated in that hiring process, do reach out to us at Wize Talent. We'd be more than happy to point you in the right direction, and we've got a whole bag of tools that you probably don't have in your own firm that we can help you out with there. And, if you liked some of the conversations that we're having within this episode around team structure and setting KPIs and some of those things, have a scroll through our other episodes, because there are plenty of episodes diving into each of those individual topics. If you can't find what you're looking for, do reach out to us here at Wize and we'll send you in the right direction again. So, Jamie, thanks, as always. See you on another episode.

Jamie Johns:

All right, Thanks, Brenton. Bye everyone.