Is the end in sight for the talent shortage?
By Rick Telberg
New signs are emerging that the profession may be approaching a long-awaited inflection point: Productivity gains from new technologies are finally showing up in reductions in hiring plans. That's good news for some; not so much for others.
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Are we on the verge of a CPA glut? Are we going to see lines of unemployed accountants at the entrance of industrial parks holding signs that say, “Will do tax prep for food?"
Well, no. But new data suggests we are seeing a record number of students enrolled in accounting programs. At the same time, there’s been an easing of the hiring rate.
Glut is hardly the projection, according to the American Institute of CPAs 2017 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits. It’s more like a long-awaited filling of accountancy’s perilously thin ranks. The academic pipeline is gushing, and the slight slowing in new hires is coming down from a record high in 2014-15. Future hiring is expected to increase.
The trends report finds that total projected accounting enrollments remain constant with the record level seen in 2014-2015. Bachelor student levels have increased by five percent, though that was balanced by slight decreases in other related degree types. Overall, the numbers were the same, but with a perceptible shift in focus from MBA accounting to tax accounting.
Yvonne Hinson, AICPA Academic-in-Residence, Senior Director, Academic & Student Engagement, says “The high number of undergraduate enrollments in accounting programs bodes well for the goal of continuing a strong pipeline of talent entering the profession.”
"Projected accounting enrollment is still at an all-time high, with no overall change since the record levels seen in 2014-15," Hinson reports. "We have seen a shift, however, in the proportion of bachelor’s versus master’s enrollments. Projected master’s enrollments have declined, returning to pre-2014 levels... There are many reasons students may not be pursuing master’s degrees at the same scale as previous years. The rising cost of college tuition may be compelling students to seek lower-cost alternatives to reach their state’s hourly requirements for CPA licensure."
Nevertheless, the pipeline also bodes well for the majority of CPA Trendlines members who for years have been reporting the difficulty of finding good employees. Staff shortages have contributed to complaints of excruciating tax seasons.
The supply is high and steady
The 2015-16 academic year saw 216,482 enrolled in Bachelor’s programs, up from 207,071 the year before. At the same time, Master’s in Accounting numbers dropped drastically from 39,641 to 29,429. Students pursuing an MBA in Accounting remained relatively stable, inching down from 3,107 to 3,014. Masters in taxation went about as far the other direction, rising from 2,068 to 3,177. The report did not interpret whether the declines were due to graduation or changes in educational pursuits.
The gender proportions continue to be close to the proportions of the general population. A few years ago, it looked like women were going to hold a slight lead in enrollment. From 2006 until about 2008, they held a two-point lead. But in 2009, the lines crossed. By 2011, males accounted for just over half of enrollment, and today, they hold 52 percent of the college-level classroom.
But the demand is dipping
Meanwhile, the hiring of recent graduates by CPA firms has slowed. New adds of professionals with brand-new Bachelor’s degrees were 24,931 in 2014 but only 21,167 in 2016. The drop in hires of those with Master’s degrees was even steeper, down to 13,722 from 18,321.
Hiring projections could be described as guardedly optimistic. Of firms that hired accounting graduates in 2016-17, 45 percent expected to continue hiring at the same rate, but only 14 percent expected to increase hiring. Eighteen percent expected the hiring pace to decline. But that left almost a quarter of CPA firms unsure.
Future hiring of non-accounting graduates is far more unsure. Fully half of firms that had hired new non-accounting graduates in 2016-17 couldn’t say what the future would bring. Only three percent expected hiring to increase, while 23 percent foresaw a decrease.
AICPA President and CEO Barry Melancon is bullish in his interpretation of the trends report.“While technology and data analytics are reshaping the global economy,” he says, “CPAs remain uniquely positioned to take advantage of these trends.”