South Africa's financial management and auditing sector is searching in vain for 22 000 qualified accountants, according to a research report commissioned by the South African Institute of Chartered Accountants (SAICA).

The situation is forecast to deteriorate in the years ahead.

These are among the findings of a research report released on Wednesday which aimed to determine the magnitude of the skills shortage and establish effective intervention strategies.

The survey's 739 respondent organisations employ 1.253 million people, equivalent to 13.7 percent of economy-wide formal sector employment.

A separate survey of the financial divisions of public and private sector organisations was conducted alongside, one among senior partners of accounting and auditing firms.

"The future looks bleak," said Ignatius Sehoole, SAICA's executive president, "given especially that economic growth is so reliant on people in the financial occupations. We are actively seeking solutions."

The research indicates that South Africa is in an especially difficult position because anticipated five-year business growth expectations among the organisations canvassed may be stifled by a lack of suitably qualified candidates, especially black candidates.

Moreover an alarming 62.3 percent of public sector organisations experience retention problems compared with 18.5 percent in the private sector, with accounting professionals the group that organisations struggle the most to retain.

Additional remuneration incentives are often required to retain financial staff.

The researchers suggest that a total vacancy rate of between seven percent and 12 percent is indicative of skills shortages in financial occupations, with the shortage of black professional accountants presenting the most pressing problem.

Companies surveyed would have employed an additional 740 chartered accountants if there were no supply constraints, regardless of racial classification.

The input to the pipeline of qualified accountants is limited to matriculants with a specific interest in mathematics. In 2006, a paltry 25 217 (6.8 percent of all mathematics candidates) learners passed mathematics at higher grade. It is from this pool that chartered accountants must be attracted – in competition with the engineering, medicine and actuarial disciplines, among others, it said.

In higher education, the number of three-year first degrees graduates increased from 3142 in 1999 to 4978 in 2006, in which year the number of new labour market entrants was 5752 – almost 1000 more students than the graduates produced in the same year.

The researchers suggest this signals that higher education is not producing enough graduates to meet the market demand for new entrants.

While international trends suggest that skills shortages are a worldwide phenomenon, in South Africa the vacancy rate of financial staff in the public sector is 19.1 percent and 3.7 percent in the private sector. The international benchmarks for vacancy rates are 2.7 percent and two percent respectively, the report noted.

"All the evidence presented in this report confirms the existence of skills shortages in the field of financial management, accounting and audit skills. It also confirms that the shortages are experienced from the clerical level through to the professional levels but are more acute at the professional level," said Sehoole.

"We desperately need to find a way of increasing the throughput of quality mathematics matriculants. SAICA is doing its bit; but we can't do it all ourselves."

"SAICA will be engaging with all its members, business and government on the skills issue to develop better-equipped and trained accounting, auditing and financial management staff. SAICA will also be engaging with the Department of Education to get more funding for Thuthuka," he added.

Thuthuka is the education transformation initiative started in 2001 to address transformation and skills shortages in the chartered accountancy profession.

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