Top professionals provide their insights.
By CPA Trendlines Research
Two crucial questions:
- What is causing the shortage of accounting professionals?
- What is the shortage of accounting professionals causing?
MORE: OUTLOOK: Soft Skills Are Front and Center | OUTLOOK: It’s Time for a New Business Model | Rosenberg MAP: Partner Incomes Surge 11.4%
Exclusively for PRO Members. Log in here or upgrade to PRO today.
Each question has a few answers.
According to reports from the American Institute of CPAs and the Center for Audit Quality, fewer and fewer students are graduating with majors in accounting, and even fewer are taking the CPA exam. Why?
- They think accounting isn’t interesting.
- They think they can make more money in another profession.
- They can’t afford the 150-credit-hour requirement.
- They never got encouragement from a mentor.
Meanwhile, 75 percent of AICPA members just passed retirement age.
Movement Toward Solutions
There are a few efforts in progress to effect long-term solutions.
- The AICPA is launching programs to take the accounting career message to high schools and colleges.
- Recent graduates can now pursue the 150 hours of study and prepare for the exam while working, with time off for studies.
- Colleges and state CPA societies are developing mentor programs.
- CPA firms are offering higher salaries and better benefits.
- There is talk of doing something about the 150-hour requirement.
Those are some of the causes of the dearth of available talent. But what doth that dearth cause?
Observations contributed by top professionals in The Rosenberg National Survey of CPA Firm Statistics discuss some of the effects of the staff shortage.
1 – Outsourcing
Allan Koltin of Koltin Consulting says, “Clearly, the biggest spike has been the amount of work that is now offshored, where work can be done at $25 an hour vs. the $125 an hour in the U.S.”
He also warns that “young, talented staff does not want to do mundane compliance work, and the ‘best in class’ talent will leave firms if they don’t feel they are getting challenging and interesting projects.”
2 – Burnout
Jennifer Wilson, at ConvergenceCoaching, sees a good result resulting in a bad result. More clients means more work, which is good, but more work means more burnout, which means more staff looking for a way out. Maybe to another firm. Maybe to a company. Maybe to another profession.
“Firms have experienced record levels of turnover as their people sought better paying jobs at more progressive or flexible firms or companies,” Wilson says. “The high client demand has contributed to overselling in most firms, creating a feeling of overwhelm – even burnout – for all staff levels, including partners.”
3 – Advisory Services
Sarah Dobek of Inovautus sees CPA firms offering services that don’t depend on CPAs.
“Another significant trend is the increased focus on advisory services, accompanied by hiring individuals with non-traditional CPA skill sets,” she notes. “Firms heavily invest in expanding these areas, signaling a commitment to growth.”
4 – Better Bennies
Matt Rampe, at The Rosenberg Associates, detects several obvious consequences of the shortage, including rising rates, improving technology, outsourcing and hiring non-accountants.
But he also sees that top firms have “invested in being a destination firm. They built a firm that people genuinely want to be a part of. This included both strong
compensation and strong culture where people create positive relationships.”
5 – New Business Models
Terry Putney, at Transition Advisors, sees CPA firms rethinking themselves as they search for private equity and other alternative investors.
“Firms are modifying their governance, owner agreements and compensation structures in response to how private equity evaluates firms,” Putney says. “We are seeing a shift from the partnership model to a more corporate model at some larger firms.”
Considering all the above, the shortage of qualified professionals is far more than an issue of how to find more of them. It’s also an issue of consequence, and continued success will go to those firms that know how to deal with it.
