Talent as a strategic risk: Why mid-tier firms must rethink workforce resilience in 2025

The ICAEW’s Evolution of Mid-Tier Accountancy Firms 2025 report highlights a profound shift in the pressures shaping mid-tier accountancy firms. While recruitment and retention dominated headlines in previous years, the report shows a new priority emerging: capability. Firms are increasingly concerned not merely with how many people they employ, but whether those people possess the right skills, leadership qualities, and resilience to meet the profession’s evolving demands.

This shift is strongly reflected in the report’s findings. Although recruitment remains a top-three challenge for 56% of firms, this has decreased from 67% in 2024, suggesting that volume-based talent pressures are gradually stabilising. Retention pressures have also fallen, with just 28% of firms citing it among their top three challenges — down significantly from 60% the previous year. Yet, instead of signalling relief, these reductions reveal a redirection of concern. Firms are now focused on future-proofing the skills of their people, supporting capability development, and strengthening their managerial and leadership pipelines.

Indeed, three-quarters of firms identify upskilling as a high priority for their operating models over the next three years. This strategic shift reflects a recognition that the future of the profession — shaped by digital transformation, shifting client expectations, and emerging advisory opportunities — will depend on whether firms can equip their people to navigate a more technologically enabled and insight-driven landscape.

At the organisational level, the report identifies “future-proofing skills” as a significant challenge, with 22% of firms ranking it as their top concern and 44% placing it among their top three. These figures highlight the profession’s acknowledgment that capability gaps are no longer isolated or easily contained. They influence staff confidence, service consistency, project oversight and, ultimately, client satisfaction.

Marsh sees these patterns reflected in the firms we support. When skills development fails to keep pace with client demands or technological change, the impact often appears not just in operational efficiency but in heightened risk exposures. Rapid adoption of new tools and advisory approaches without appropriate training can lead to judgement errors, inconsistencies, or oversight issues. While the ICAEW report does not comment on insurance dynamics, our experience indicates that capability gaps are increasingly connected to the quality and reliability of professional output.

Alongside skills, culture and cohesion are emerging as critical resilience factors. The ICAEW reports that 58% of firms identify contrasting generational work ethos as a meaningful talent challenge. This is one of the most striking findings in the report, and it reflects the fundamental reconfiguration of expectations across the profession.

Generational cohorts often hold different views on working patterns, communication norms, progression speed, and professional identity. These differences, if unmanaged, can influence morale, retention, collaboration, and the overall employee experience.

The impact of hybrid working remains visible as well. Some 22% of firms point to the lingering effect of remote working and lockdown years on professional skills — particularly soft skills, confidence, and the ability to engage face-to-face with clients. These disruptions are not solely a training challenge; they influence team structure, coaching effectiveness, and the distribution of responsibility. As firms rebuild in-person capability, they must consider how hybrid expectations intersect with development needs across generations.

Succession planning emerges as another critical area of vulnerability. Some 39% of firms place it among their top three talent challenges, and 50% of those identifying succession as a challenge cite reluctance among staff to progress into leadership roles. This reluctance is often shaped by perceptions of workload intensity, increased regulatory responsibility, or uncertainty about the nature of leadership in a changed professional environment. Whatever the cause, the impact is clear: talent pipelines are thinner, senior capacity is stretched, and firms risk over-reliance on a small number of long-standing leaders.

These leadership pressures are also reflected in the report’s findings on mergers and acquisitions (M&A). Among firms pursuing or considering transactions, 84% cite the need to access or expand skillsets as a key driver, and 68% refer to securing talent for succession planning. While M&A is a strategic route to strengthen capability, it introduces its own complexities — from integrating teams and cultures to managing differing expectations around responsibility, progression, and working style.

Taken together, the ICAEW’s findings reveal not a single challenge but an interconnected set of dynamics. Skills, generational cohesion, leadership stability, and managerial capacity must be understood collectively, not in isolation. Firms that focus on recruitment alone risk overlooking deeper structural issues that influence resilience.

Where Marsh can add value is in helping firms interpret and act on these themes through the lens of operational and human-capital risk. While the ICAEW report provides the profession’s benchmark insight, firms still face the challenge of assessing how these trends manifest within their own workforce — and where the points of vulnerability lie.

Marsh works with firms to evaluate the stability of their leadership pipelines, assess the distribution of professional competence, understand the influence of workplace dynamics, and map the risks associated with succession, culture, and capability. These conversations help firms view talent not only as a resource but as a foundational component of operational resilience.

Marsh FINPRO provides solutions that help mid-tier firms navigate talent-related risks and build long-term workforce resilience, complementing the challenges highlighted in the ICAEW research.

With nationwide specialist teams in PI, financial lines, and claims advisory — and experience supporting more than 4,000 accountancy clients, including PI advisory to the ICAEW — Marsh provides sector-specific insight and practical solutions to strengthen firms’ most valuable asset: their people.