Talent Newsletter

Upskilling vs Hiring: Building the Next Generation of Practice Leaders

Jimmy Braimah | January 21, 2026

Leadership succession is now the top challenge for accounting firms, with partner retirements accelerating and over half of professionals considering leaving their current roles. Firms that invest in structured, long-term leadership development see significant gains in retention and performance. However, strategic external hiring remains essential for specialist skills and growth. The most successful firms balance internal development with targeted hiring, ensuring strong integration and transparent career paths. This approach not only secures succession but also boosts firm valuation and market reputation¹⁰. Talent strategy is now the ultimate differentiator for sustainable success.

What You Need to Know

If you’re leading a firm today, you know the talent landscape feels like it’s shifting under your feet. Here are five things every partner should keep front of mind:

Leadership succession is the top worry for most mid-tier firms. Nearly half say it keeps them up at night¹.
Investing in real, structured leadership development isn’t just a nice-to-have. Firms that do it see retention jump by up to 77%⁴.
Hiring from outside is still important—but only when you’re clear on what you need. Bringing in fresh skills and perspectives matters, but most firms stumble when it comes to integrating new hires¹.
The best firms aren’t choosing between growing their own talent and hiring externally. They do both, filling specific gaps with strategic hires, not just whoever looks impressive on paper¹.
Your leadership pipeline is a direct line to your firm’s value. Private equity and potential buyers are looking closely at your succession planning. A strong bench means a stronger valuation¹.

Why this is relevant today

Take a look at what is happening across the profession. In just the last two years, over 360 equity partners retired from the firms Inside Public Accounting surveyed². The pace is picking up, and the real challenge is the gap between those leaving and those ready to step up. ICAEW found that almost half of mid-tier firms put succession planning at the top of their talent worries, and another big chunk are concerned about future-proofing skills¹.

It’s not just about who’s leaving, because the best people are always on someone else’s radar. ACCA’s latest survey says over half of professional accountants expect their next move to be outside their current firm³. That means you are not just competing with other practices, you are up against industry, consulting, and anyone who offers a clearer path forward³.

Why Internal Development Pays Off

Here’s the good news: when you invest in your people, it works. The Firm Catalyst found that firms with solid leadership programs saw productivity rise by 30% and turnover drop by a whopping 77%⁴. Select Advisors Institute tells the story of a mid-sized firm that built a leadership program around mentorship and emotional intelligence and after a year, employee satisfaction was up 40% and client retention rose 25%⁵.

The Growth Partnership tracked what actually changed for people in leadership training: strategic thinking, decision-making, and communication all improved by 28%⁶. When you develop people systematically, you don’t just keep them, you help them thrive.

What Great Leadership Programs Have in Common

After looking at what works, some patterns are clear:

The best programs run for years, not weeks. Upstream Academy’s Emerging Leaders Academy is a great example⁷.
Real projects matter more than workshops. People learn by leading initiatives that matter, with mentors who hold them accountable⁸.
Generic training doesn’t cut it. Effective programs are tailored to the unique challenges of accounting⁸.
Partners have to show up. When firm leaders mentor and guide, everyone sees that this is strategic, not just HR’s problem⁷.
People need to know what they’re aiming for. Clear, public criteria for promotion are essential¹.

When and Why You Should Hire from Outside

Internal development is critical, but sometimes you need to look outside. ICAEW’s research shows that nearly half of firms made acquisitions last year to get capabilities they couldn’t build fast enough in-house¹. External hiring makes sense when you need

specialist expertise right now
you’re breaking into a new market, or
you want to shake up your thinking¹⁹.

But be careful, lateral hires fail more often than anyone likes to admit usually because of culture clash, weak onboarding, or poor communication about why you’re hiring externally¹. Make sure you’re clear, supportive, and intentional.

Getting the Balance Right

The best firms don’t pick one approach over the other, they regularly review their pipeline, map out upcoming retirements, and honestly assess who’s ready to step up². They’re transparent about what they need, promote people who are 70–80% ready and help them grow, and only hire externally when there’s a real gap⁴.

When you do hire from outside, make integration a priority. Structured onboarding, mentorship, and getting new people involved in firm-wide initiatives early makes all the difference¹.

Why This Impacts Your Firm’s Value

Your leadership pipeline isn’t just about continuity, it’s also about value. Investors and PE firms scrutinise how you develop and keep leaders. ICAEW reports that a quarter of mid-tier firms are already PE-backed, and another quarter are likely to pursue investment soon¹. Among independents, 93% have had interest from PE in the last three years¹.

When we speak with candidates, it’s clear they are paying close attention to firm culture. ACCA’s 2024 survey reinforces what we hear every day: 73% of professionals are actively looking for employers who demonstrate a strong commitment to diversity, inclusion, and transparent career progression¹⁰. Candidates want to see that firms genuinely invest in their people and provide clear opportunities to grow.

Baker Thornton’s Perspective

The firms that will win in the next decade aren’t necessarily the biggest, they’re the ones who treat leadership development as a true strategy. The most valuable firms invest in people, are transparent about career paths, and balance systematic internal development with strategic external hiring.

Three things always matter:

Be transparent about advancement¹.
Invest real time and resources in leadership⁴.
Make data-driven decisions about when to grow and when to hire¹.

Talent is now both the ultimate constraint and the biggest differentiator. The partners who focus on people development will lead in value, succession, and long-term success.

Baker Thornton specialises in connecting accounting and CPA practices in the UK, USA and Canada with qualified audit, tax, and accounting professionals who possess deep understanding of practice environments and operational demands. Our focus is on sustainable placements that enhance your team's technical capabilities for emerging regulatory and market challenges, from MTD implementation to capacity planning for peak periods.

Should you be developing your 2026 workforce strategy, we welcome the opportunity to discuss your practice's specific requirements

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