Technology, talent and operating models: re-designing the mid-tier firm

ICAEW’s 2026 Evolution of Mid-Tier Accountancy Firms research highlights how investment in technology and artificial intelligence (AI) is driving new thinking about workforce design, skills development and career pathways, with many firms still working through the implications. Together, these changes are prompting a fundamental rethink of how mid-tier firms are organised, resourced and positioned for future growth.

Technology and AI: embedded in strategy, moderate in use

More than nine in ten participating firms say that technology plays a key role in delivering their firm’s strategy, and the majority report having a technology strategy that explicitly includes AI adoption.

Most firms place themselves within the ‘early majority’ (the first significant wave of mainstream consumers who adopt a technology) for both technology and AI adoption, rather than as ‘early adopters’ (the very first individuals to embrace and adopt new technologies).

AI use is widespread across firms, but the level of use is described as moderate rather than extensive. It is most used for internal knowledge management and technical research alongside client management activities, with growing use across audit, accounting and tax service line delivery. Almost all mid-tier firms expect both AI and automation use to increase significantly within their operating models over the next three years.

Many firms are investing in upskilling in technology, however only 17% feel able to assess the impact AI will have on their people.

Talent: from recruitment and retention pressures to a focus on skills and generational differences

The talent landscape for mid-tier firms has shifted. While recruitment and retention pressures have eased compared with earlier years of the research, firms are increasingly focussed on skills. Future-proofing skills is now the most significant talent challenge, with particular emphasis on gaps in AI assurance, data and sustainability.

Alongside this, generational differences are becoming more prominent. Over half of firms now cite differing expectations and working styles across generations as one of their top three talent challenges, while succession planning remains a concern.

Operating models: more specialists and more school leavers

Nearly three-quarters of firms anticipate increasing their recruitment of specialised staff, with demand strongest for technology and data analytics roles. Recruitment is also expected to increase in sustainability, regulation and financial advice capabilities although to a lesser extent.

At trainee level, firms expect a shift in the balance between graduates and school leavers. Nearly half of firms expect to increase the number of school leaver trainees, whereas 40% expect to decrease the number of graduate trainees. Firms highlighted several factors influencing hiring decisions, primarily, increases in national insurance contributions, changes to the Level 7 apprenticeships funding and the impact of employment rights legislation.

Resourcing models are also becoming more varied. More mid-tier firms expect to increase offshoring than outsourcing overall, though PE-backed firms are notably more likely to expand outsourcing arrangements.

Louise Coleman, ICAEW’s Chief Membership Officer, reflects that the mid-tier firm is undergoing a deliberate redesign rather than a series of incremental adjustments. “Firms are combining automation, specialisation and alternative resourcing in different ways,” she says. “They are moving away from traditional linear structures and building operating models that can support scale while maintaining professional oversight and quality.”

Coherence, choice and resilience

The findings underline that technology, talent and operating models cannot be viewed in isolation. Mid-tier firms are confident, adaptive and intentional in how they respond to change, but the interplay between technology, skills and structure remains complex.

There is no single operating model emerging from the research. Instead, one of the strengths of the mid-tier sector is the range of approaches firms are taking with different combinations of technology, specialist expertise and resourcing approaches to support quality and growth.

Innovation in these operating models and in how technology and talent are combined within them, is part of what underpins the sector’s resilience. As the profession continues to evolve, it is this diversity of approaches, rather than convergence on a single model, that is likely to support confidence, adaptability and relevance in the years ahead.