Looking for Fresh Accounting Grads? Good Luck

The pipeline is just a trickle.

Join the new staffing survey.

Benchmark your firm.
Be the first to get the winning strategies.

By CPA Trendlines Research

The American Institute of CPAs 2023 Trends report on new graduation data has good news and bad.

Which would you like first?

MORE: CPA Biz Is Booming, But for How Long? | Survey Respondents See Exciting Year Coming Up | SURVEY: Accountants Economic Outlook Brightens | Research: Accounting Pros Cautiously Optimistic about Generative AI | Why the U.S. Must Act Now to Protect Our Online Privacy
Exclusively for PRO Members. Log in here or upgrade to PRO today.

Spoiler alert: Even the good news is pretty bad.

The report gathers data on accounting education, the CPA exam and public accounting firms’ hiring of recent grads. It presents data collected since 1994 when 45,469 students graduated with a bachelor’s degree in accounting and 6,153 took master’s degrees. This year’s report is based on 2022 data.

The numbers peaked around 2011-2012, when bachelor grad numbers reached 57,483. By 2015-2016, master’s degrees topped out at 23,139. The total grad number that year was 79,854.

But then something happened – nobody knows what – and the numbers declined at a rate of 1 to 3 percent per year.

In 2021-22, something else happened – maybe due to the pandemic? – and the decline for undergraduate accounting degrees plunged by 7.8 percent, dropping to 47,067.

The pretty bad good news is that the decline for master’s degree completion dropped by only 6.4 percent, substantially less than the plunge of 2019-20.

Expecting, Hoping or Wishing?

The trickle in the pipeline is bad news for 91 percent of the firms that responded to the survey. They were expecting – or hoping or wishing – to hire the same number or more new grads in 2023. Fully half expected to hire more than the year before. Sixty percent were confident enough to say that they expected to have as many CPAs on staff in 2023 as they had in 2022.

The report didn’t say where these firms would find all that new staff. In 2022, only 18,847 candidates passed the fourth section of the CPA exam, the lowest since 2006. In 2016, that number was 27,889.

Maybe the situation will improve in a few years. Forty-four percent of responding bachelor’s programs and 46 percent of master’s programs said they were expecting more enrollments in 2023, though 22 and 19 percent, respectively, foresaw a downturn.

Uptick in Diversity

An interesting development in diversity: The number of Latino/Hispanic recipients of bachelor’s degrees rose by almost a full percentage point, from 13.4 percent to 14.3 percent. The proportion of Blacks rose slightly from 6.8 percent to 7.1 percent. The percentage of white graduates dropped from 58.3 percent to 57.7 percent.

The ratio of men to women coming out of college has seen women consistently in the lead at least since 2013. Last year, 52.1 percent of recent grads were women, and 47.9 percent were men.

AICPA Initiatives

The AICPA has developed a Pipeline Acceleration Plan to raise awareness, provide training, support improved firm culture, promote diversity and partner with colleges and universities to secure the profession’s future.

Among the efforts:

• An Experience Learn and Earn (ELE) program to allow students to earn up to 30 credit hours while employed at a CPA firm, with time off for studies
• A “Transform Your Business Model” project to nurture company cultures that attract, retain, and develop talent
• Several initiatives working inside high schools and colleges
• An effort to have accounting recognized as a STEM field

Early results from the CPA Trendlines Outlook 2024 Emerging Issues, Opportunities and Trends survey indicate that staffing shortages are one of the industry’s greatest challenges, and 48 percent of respondents say they are turning away work for lack of workers. The AICPA report indicates that this problem is not going away soon.

 

Posted on October 30, 2023