Payroll Agencies Lead Jobs Growth in the Tax & Accounting Industry

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"The opportunities for CPA firms only increase."

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By Beth Bellor

"It’s a good time to be a CPA," says Brian Esko, and – with some notable exceptions – it's hard to disagree.

The managing director and executive recruiter at Parker & Lynch and Ajilon Search points to an unemployment rate of roughly 1.5 percent for accounting, almost 300,000 new jobs created over the last 12 months and wages rising at roughly 3 percent annually.

MORE ON JOBS: Hiring Trends: Accounting Hits 4.2% Expansion Rate | Hiring Trends Flash Warning Signs of Slowdown in Tax & Accounting | CHARTS: Tax & Accounting Among Biggest Jobs Creators in U.S.
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Esko

"For a CPA, there are more opportunities than ever in the market and companies are doing a better job of rewarding and retaining their people through compensation increases and internal growth opportunities," Esko says.

In this report, CPA Trendlines highlights:

  • Current hiring trends in each of the bookkeeping, payroll, tax and CPA segments of the industry (all data seasonally adjusted)
  • Average hourly wages for key segments
  • Typical hours worked per week
  • Trends concerning women in the accounting workforce

The national unemployment rate was unchanged at 3.7 percent, according to the latest data, with total nonfarm payroll employment rising by 130,000 in August. Overall job growth has averaged 158,000 per month so far this year, below 2018's average monthly gain of 223,000.

Professional and business services gained 37,000 jobs. Monthly increases have averaged 34,000 in 2019, but that's markedly below the 47,000 averaged in 2018.

 

Chart of overall profession employment
Overall profession employment

 

Overall employment in the accounting profession dipped to 1,056,400, down 2,700 or 0.3 percent for the month but up 37,700 or 3.7 percent for the year.

"CPA firms should see the trends of historic low unemployment and the 3-plus% wage increases year over year as indicators that businesses and their clients are doing well enough to make investments in their team," Esko says. "Typically, companies looking to add staff, not just replace open positions, is a good sign the company and economy are moving in the right direction. As new standards and compliance issues arise, the opportunities for CPA firms only increases."

According to CPA Trendlines research, the industry is hitting new records in:

  • Overall hourly earnings
  • Staff employment and earnings
  • CPA firm employment, earnings, and staff earnings
  • Payroll overall employment, staff employment, and staff earnings
  • Women overall and in payroll
  • Bookkeeping

"With the economy moving at this rate, small business clients have not only continued to work with outside CPA firms on tax issues and bookkeeping but we’ve also seen an uptick in their appetite for more consultative services around creating a more formal budgeting and forecasting process to better understand the trends of their business," Esko says. "From the data in the reports and from firsthand work with clients, the demand for data and technology skills with tools like SQL, Tableau, and other similar products is certainly on the rise."

The takeaway: "Investing in yourself by taking some courses would make you more marketable as the industry continues to evolve from a data analytics standpoint," Esko says.

Employees overall are working an average 36.1 hours per week, down 6 minutes or 0.3 percent for the month but up 24 minutes or 1.1 percent for the year. They're earning a new high of $34.27 per hour, up 19 cents for the month and 73 cents for the year, respective increases of 0.6 and 2.2 percent.

Staff numbers 795,400, up 4,000 or 0.5 percent for the latest month and 31,900 or 4.2 percent for the year. They average 34.4 hours, down 6 minutes or 0.3 percent for the month but up 24 minutes or 1.2 percent for the year. They make $26.99 an hour, up 27 cents or 1 percent for the month and 87 cents or 3.3 percent for the year.

CPA FIRMS

CPA firms employ 494,500, up 1,200, or 0.2 percent for the month, and 17,100, or 3.6 percent for the year. Employees work 37.1 hours weekly, down 18 minutes, or 0.8 percent for the month, and 12 minutes, or 0.5 percent for the year. They earn $36.65, up 35 cents or 1 percent for the month, and 62 cents, or 1.7 percent for the year.

Staff at CPA firms number 355,600, up 900 or 0.3 percent for the month, and 11,100, or 3.2 percent, for the year. They work 35.8 hours, down 18 minutes, or 0.8 percent for the month, and 24 minutes, or 1.1 percent for the year. They make $28.02 an hour, up 37 cents, or 1.3 percent for the month, and $1.10, or 4.1 percent for the year.

TAX PREPARATION SERVICES

Tax preparation services employ 105,200, down 400 or 0.4 percent for the month, but up 2,700 or 2.6 percent for the year.

PAYROLL SERVICES

Chart of payroll services employment
Payroll services employment

 

Payroll services hit 195,600 in their 17th straight month of growth. That figure is up 1,300, or 0.7 percent for the month, and 19,900, or 11.3 percent for the year.

Employees are averaging 35.4 hours per week, down 18 minutes, or 0.8 percent for the month, but up 30 minutes, or 1.4 percent for the year. They make $31.34 an hour, up 30 cents or 1 percent for the month, and 66 cents, or 2.2 percent for the year.

Chart of payroll services staff employment
Payroll services staff employment

 

Staff at payroll services number 165,600, up 1,300, or 0.8 percent for the month, and 17,700, or a stunning 12 percent for the year. They work 34.2 hours weekly, down 18 minutes or 0.9 percent for the month, and half an hour, or 1.4 percent for the year. Their earnings average, $27.61, up 40 cents for the month and 39 cents for the year, increases of 1.5 percent and 1.4 percent respectively.

BOOKKEEPING

Other accounting services hit a record 266,200, up 700, or 0.3 percent for the month and 2,900 or 1.1 percent for the year.

WOMEN

Women in accounting number 676,000, up 4,800, or 0.7 percent for the month, and 38,500, or 6 percent for the year.

Women at CPA firms number 305,200, up 4,200, or 1.4 percent for the month, and 14,200, or 4.9 percent for the year.

Chart of women in payroll services
Women in payroll services

 

Women in payroll topped 100,000 for the first time to hit 101,100, up 1,500, or 1.5 percent for the month, and 14,900 or 17.3 percent for the year.

 

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