Firms Culling Clients as Staffing Woes Persist

man in suit exiting office building

Others tap outsourcing, training clerical staff as solutions.

By CPA Trendlines Research

Early results from the CPA Trendlines 2024 Busy Season Barometer: Emerging Issues, Opportunities, and Trends are showing a painfully persistent problem with staff shortages, though it seems the hardship may have improved a bit since last year.

MORE: Revenue Up at 59% of Accounting Firms … and More Good News | Compensation’s Up, but Up Enough to Retain Staff? | Are Accountants Charging Too Little? | ChatGPT for the Reluctant Accountant | CPAs Needed to Help Small Biz Adopt AI | Revenue Growth Is Top Priority for Small Firms | Is the CPA Business Model the Clog in the Pipeline?
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This year, like last year, survey respondents are reporting staffing as the second most common concern. Last year, it was reported by 47 percent, almost tied with the main concern: late or unprepared clients.

This year, uncooperative clients still rank first, at 50 percent, but staffing concerns have dropped to 37 percent.
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Compensation’s Up, but Up Enough to Retain Staff?

young woman seated at laptop counting money

People are leaving the profession. More money is one solution.

By CPA Trendlines Research

The AICPA’s 2023 National Management of an Accounting Practice (MAP) Survey came up with an odd statistic. Kind of hard to believe until you get the context.

The finding: the median employee turnover rate across all CPA firms is … 0 percent.

Yes, that’s a zero.

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But wait. A median, as they say, is only half the story.

The bigger story – the broader context – is that more than half the responding practices had zero turnover, so the median fell at zero percent. But that goose egg doesn’t reflect the reality of firms at the other side of the spectrum.
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Accounting Hiring Hits Another High

line chart
Overall employment in the accounting profession

 

Tax prep is less than half the increase.

By Beth Bellor
CPA Trendlines Research

Is the accounting profession closing its staffing gap?

It sure seems that way, as employment hit an all-time high in January. Women fared well, too, reaching record levels in the field overall and in payroll services.

MORE: Staff Wages Hit Record High | Despite Staffing Crunch, Firms Freeze Pay Raises | Tax & Accounting Firms Grow for 9th Straight Month | Tax & Accounting Profession Grows, but Wages Don’t | Tax and Accounting Pay Advancing at 5.9% Pace | Accounting Jobs Up 4% for Year
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Nationally, unemployment held at 3.7 percent as total nonfarm payroll employment increased 353,000, according to the latest data available to CPA Trendlines Research. Of those new hires, 74,000 came in professional and business services, well above 2023’s monthly average of 14,000.
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Accounting Jobs Back On the Rise

line chart
Overall accounting profession employment

 

Tax prep is an exception.

By Beth Bellor

The accounting profession has regained some ground in the most recent jobs data available to CPA Trendlines Research. There are 1,162,100 people employed in the field, up 4,400 or 0.4 percent for the month and 30,400 or 2.7 percent for the year. The figure is just 1,200 shy of the record set in July.

 

MORE: Staff Wages Hit Record High | Despite Staffing Crunch, Firms Freeze Pay Raises | Tax & Accounting Firms Grow for 9th Straight Month | Tax & Accounting Profession Grows, but Wages Don’t | Tax and Accounting Pay Advancing at 5.9% Pace | Accounting Jobs Up 4% for Year
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Nationally, overall employment – total nonfarm payroll – increased by 216,000 the same month, pegging unemployment at 3.7 percent. Professional and business services added 13,000.

Accountants are putting in 36.2 hours weekly – the highest mark since October 2022 – up half an hour or 1.4 percent for the month and 12 minutes or 0.6 percent for the year.
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Is the CPA Business Model the Clog in the Pipeline?

older woman showing young woman something on office computer screen

Maybe a flip in perception is in order: 150 hours as an investment, not a burden.

By CPA Trendlines Research

The accounting profession is in trouble. Big trouble.

CPA firms experience the problem as a difficulty in finding certified professionals. But the real problem is in the personnel pipeline that feeds the industry, the long, hard, expensive process of becoming a CPA.

MORE: Can Big Data Spot Financial Fraud? | Will Unclogging the Accounting Pro Pipeline Kill Mobility? | Accountants Bullish on Income | Which Niche’s the Best Niche? | Ethics on Sustainability Puzzle Some Accountants | Accountants Hopeful, Concerned and Confused about AI | Survey Respondents See Exciting Year Coming Up | The 7 Categories of Cybersecurity Solutions Firms Need
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To continue the metaphor, it’s also the drain pipe – the increasing flow of professionals out of CPA firms and into retirement. In 2020, 75 percent of CPAs became eligible to hang up their green eyeshades and find something else to do, such as get to know their families and experience the pleasures of daylight.
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Will Unclogging the Accounting Pro Pipeline Kill Mobility?

man placing box on desk to move into new job, with to coworkers in background

Changing the 150-hour requirement could have unintended consequences.

By CPA Trendlines Research

The day-to-day of the CPA may be grueling at times, but one thing makes the day a little easier – the facility of mobility.

Not only can a CPA with a driver’s license in one state drive in other states, but in most cases, they can practice their profession in other states, too. If you’re licensed to practice in one state, you’re good to go in every other state except, coincidentally, the one you can’t drive to.

MORE: Accountants Cozy Up to Clients with CAS | Accountants Torn Over 2024 Economy, Offer Advice | Are You Offering the Right Services? | 42% of Accountants Turn Away Work Over Staff Shortages | Talent Gap Widening: Be Very Scared | Looking for Recent Grads? Good Luck
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Practice mobility is crucial in a business system that often as not transcends state borders, and it’s even more important as professionals work remotely, sitting in one state while practicing in another.
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The Big 3 Success Tips for 2024

three coworkers wearing suits, smiling and talking

Profitability is just part of the picture.

By Matt Rampe
The Rosenberg MAP Survey

Over the next 12 months, three big disruptions will shake the accounting industry.

MORE: Firms Must Choose Best Workplace Model | Tech, Capital Will Drive Accounting Profession Growth | ‘Great Shakeup’ in CPA Firms on the Way | PE, Consolidations to Keep Impacting Accounting Profession
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Fortunately, there are at least three ways that firms can prevail.

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