Every single business has to manage its books, correctly account for its revenue and expenses and pay taxes (well most businesses). Accounting is the language of business. Every business can be boiled down, categorized and understood through a double-entry bookkeeping system. Your books are the source of truth on your business and so many business and regulatory processes depend on having clean, accurate and audited books.
Unfortunately the United States is in the middle of a multi-year and worsening shortage of accounting talent. The US is facing a shortage of 340,000 accountants today despite median wages jumping to $80,000 in the last decade (eye-popping numbers for accounting old-timers).
However, thanks to growing comfort with remote work thanks to the COVID-19 pandemic, American businesses are increasingly filling the shortage of American accounting talent by hiring offshore accounting talent from around the world. Simply supply and demand as well as cost considerations are forcing American companies to build globally distributed finance and accounting teams. The genie is out of the bottle and the trend is gaining momentum. So we decided to roll up our sleeves, crunch the numbers and take a look at which countries in the world are the best to hire offshore accounting talent from.
Why Hire Global Finance and Accounting Talent?
So why should you consider hiring global finance and accounting talent? There are three simple reasons: hiring from a bigger talent pool, cost savings and improved employee retention. The worsening shortage of finance and accounting talent in the US has become an enormous pain point for accounting firms, enterprises and even SMBs.
Competition for accounting talent in the US is intense, salaries continue to rise rapidly and the rate of new graduates versus retirements is slanted in the wrong direction. Everyone in the US is fighting over a shrinking talent pool of 1.6 million accountants and auditors (of which 660,000 are chartered financial analysts) in a country that has over 33 million businesses alone! To say it is an uphill battle to find a motivated, experienced and affordable accountant is an understatement.
However, getting comfortable with remote work helps unlock the huge global finance and accounting talent pool. Globally there are at least 2.1 million chartered financial analysts (CFAs) of which only 30% are based in the US. Expanding your hiring pipeline to include global talent makes it far easier to fill open roles quickly. Similarly, it’s far easier to hire top candidates in other countries than in the US where competition for the best is intense.
Besides simply filling roles quickly and hiring top candidates, expanding your hiring pipeline to include global talent also has one major benefit: cost savings. Salaries for global accounting talent can range from $18,000 – $42,000 a year depending on the country and experience level. In contrast, the median salary for an accountant in the US today is about $80,000 dollars while starting salaries at Big 4 firms are often $100,000 a year now!
These cost savings are huge and can allow you to hire 2-3 accountants for the price of one or reinvest these savings into growing your revenue or improving your product. At the end of the day productivity is about making more with less and hiring global talent can be a huge productivity unlock.
Lastly, building a distributed and global team can also help significantly improve employee retention. The shortage of US accounting talent has led retention of finance and accounting talent to drop as candidates are poached and lured away by higher salaries or better working hours. In contrast, when you hire global talent you will pay a significant premium (while still unlocking huge cost savings) compared to talent working for local companies of 50-100% which is impossible for local companies to compete with.
Overall, as an American company you should consider going global to access the huge global talent pool, unlock cost savings and improve your employee retention all at once.
What Are The Best Countries for Hiring Global Finance and Accounting Talent?
Accounting is truly a global profession. In fact, the International Federation of Accountants (IFAC) includes over 135 member countries while Institute of Chartered Accountants in England and Wales (ICAEW) includes over 147 member countries. Similarly, big accounting firms like PWC and EY have offices and teams in 150 countries globally.
Accounting expertise is globally distributed and the chances of finding talent that has worked at Big 4 firms or other reputable companies are high. So which countries are the best places to hire offshore accounting talent from? Here are our top five countries:
- The Philippines
- Mexico
- Pakistan
- India
- Sri Lanka
Let’s walk through each country in more detail below.
Philippines
One of the most popular countries for hiring global talent across many job functions is the Philippines. Today the Philippines has a pool of 200,000 CPAs with a few thousand more graduating every year. The Philippines has become a popular country to hire from for a few reasons: high English fluency, a strong education system and historical connections with the US.
A staggering 47% of Filipinos are fluent in English while about 75% of the population are competent. The high degree of English fluency presents a huge advantage when it comes to American companies looking to hire global accounting talent that can slot in day one.
The Philippines also has a strong education system with over 1900 universities and with over 13% of the population college-educated today. The high levels of English fluency and strong education system creates a healthy pipeline of talent that is interested in working for American companies given the higher salaries.
Lastly, the Philippines has a lot of historical connections with the US. From 1898 – 1946 the Philippines was an unincorporated territory of the United States after Spain ceded the territory to the US after its defeat in the Spanish-American War of 1898. This period of time created a lot of linkages between the US and the Philippines and laid the foundation for the high level of English fluency we see today.
Mexico
Mexico is rapidly becoming a popular country to hire finance and accounting talent from for two main reasons: the large pool of accountants and its proximity to the US.
Today Mexico has over 460,000 accountants and auditors today compared to 1.6 million in the US. This huge pool of talent is an appealing source of talent to help plug the shortage of accounting talent in the US.
Besides the huge pool of talent, Mexico’s proximity and deep linkages to the US make it one of the best destinations to hire offshore accountants from. Mexico is the US’ biggest trading partner and there are 37 million people of Mexican descent in the US today. The economic and cultural linkages between the two countries are deep and remote work is opening up a new frontier for cooperation between the two countries.
Last but not least, Mexico shares the same time zones as the US making it easy for your team in Mexico to work the same hours as their onshore counterparts.
Pakistan
Pakistan has emerged as a growing hub for accounting firms looking to build offshore finance and accounting teams. While the Institute of Chartered Accountants of Pakistan (ICAP) counts only 10,000 people as members, Pakistan has a much larger pool of offshore bookkeeping talent.
As a former British colony, English is the co-official language and is commonly found in elite business and educational institutions. Pakistan also is more affordable than other popular markets for hiring offshore talent such as India or Mexico.
India
India has long been one of the most popular destinations for US corporations to build offshore teams. It’s so popular that there are even academic papers written about it! India is an appealing destination to build an offshore team for a few reasons:
- Large Population: India’s population is now the world’s biggest and very young with more than 65% of the population under the age of 35
- High English Fluency: As a former British colony, English fluency is high across India especially in elite professions and education institutions
- Strong Education System: India has the world’s second-largest higher education system with 58,000 higher education institutions and an incredible 43 million students currently enrolled in higher education
Lastly and most importantly, the supply of finance and accounting talent is one of the largest in the world outside the United States. The Institute of Chartered Accountants of India (ICAI) counts over 350,000 people as members. Along with the other advantages mentioned above, India is an appealing market for hiring offshore finance and accounting professionals.
Sri Lanka
Sri Lanka is a bit of a diamond in the rough when it comes to hiring offshore talent. While most people probably can’t point to the country on a map, it secretly is a great source of talent. While its population is small at 22 million, the country benefits from relatively high English fluency with 22% of the population speaking English.
The country has about 45,000 registered accountants between its two main national accounting organizations – CA Sri Lanka and the ACCA. Sri Lanka, like Pakistan, is a relatively more affordable country for hiring offshore talent compared to more popular countries.
Conclusion
The growing shortage of accounting talent is only going to get worse over the next decade. Some combination of automation and offshore talent is going to help plug this gap. Businesses simply have no choice. The shortage of accounting talent is affecting everyone from large enterprises to SMBs and accounting firms. Each type of business will pursue a different combination of solutions to help plug this gap but offshore talent will feature prominently for most of them.
In our view, the five best countries to hire offshore finance and accounting talent from today are the Philippines, Mexico, Pakistan, India and Sri Lanka. But finding, vetting and hiring great offshore talent is half the battle. Learning how to effectively manage offshore talent is a critical component for helping turn your onshore and offshore team into a well-oiled machine. The age of the global finance and accounting team is truly here.
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