CPA firms are facing an upcoming severe staffing challenge. Almost 75% of the CPA workforce met the retirement age in 2020, as estimated by the American Institute of Certified Public Accountants (AICPA).
What’s more, the number of CPA exam candidates has drifted steadily downward over the past ten years. While there were almost 50,000 exam candidates in 2010, that number dropped to just a little over 32,000 in 2021.
With an expected exodus of experienced, qualified CPAs in the upcoming years, what can be done to solve the issue and build up the CPA workforce?
Ongoing Technological Revolution
Technology continues to play a major part in almost every aspect of day-to-day life. It’s also apparent in the accounting field. Numerous innovations have been made to improve accounting functions and make them more efficient.
Gone are the days of paper accounting journals full of debits and credits. Now, we have advanced software that allows accountants to record journal entries, view financial reports at the push of a button, and reconcile the ledger using automated processes.
This trend will probably continue and result in less need for lower-level accounting jobs such as clerks who handle incoming bills and those who create billing invoices. Existing software that is currently available can already handle these items.
However, higher-level accounting functions such as financial reporting, internal control, and taxation will continue to need support. These functions require a trained eye and expertise in generally accepted accounting principles and local laws. It’s unlikely that software will be able to replace these functions — at least in the next 20 years.
Thus, the accounting profession must find a way to become attractive to potential CPAs. Currently, many individuals who might have pursued business degrees and accounting certifications are choosing other degrees, such as engineering and information technology.
This is understandable since tech has played such a significant role in enhancing the way society operates. Accounting doesn’t seem to have the same impact or excitement as information technology (IT). What can be done?
Make Accounting Interesting
Accountants have long been typecast as boring individuals, hunched over a 10-key calculator day after day and spending long nights at the office reviewing financial accounts. To attract more people to the accounting profession, we need to eliminate that dismal persona.
While it is true that many accountants work long days — especially during a quarter, year-end, or tax season — that doesn’t mean that the job needs to be boring. In fact, accounting can be an exciting field for certain types of people.
IT typically attracts people who enjoy working with computers, have an eye for catching small details, and like solving tricky puzzles — the puzzle being the computer code.
IT also allows for creativity. Those who work in software development are constantly challenged to create new programs that solve specific issues for people.
Accounting attracts the same people and requires a similar skill set. CPAs must be incredibly detail-oriented, and they solve a puzzle every time they figure out why an account is out of balance. They’re also constantly challenged to ensure an accurate set of books, which benefits both the company and its shareholders or owners.
Trends in the Workforce
With the growing trend of remote work, we can anticipate that many accounting functions will be able to be performed from the comfort of home or (quite literally) anywhere around the world.
We also see a number of businesses expanding globally. This flexibility attracts accountants who want to experience life away from the office or in another country.
Remote work is very enticing for those with young children. Parents who both work in an office often require the services of a daycare provider.
This can be very expensive. In some cases, parents may be required to shell out over $1,000 a month for someone to care for their child. However, accountants who have the option to work remotely can keep their children with them at home.
Companies who adopt the remote model, or have a hybrid system in place, may be more likely to attract CPAs and professional accountants. In theory, we have the tools available to provide for regular remote working, as the lockdowns of COVID-19 proved.
As the older generation retires, companies may be more likely to adopt policies that allow extended remote work to retain talent and attract new professionals.
CPA firms will need to seriously rethink their business and operating models to make accounting a more attractive option to students and professionals. Otherwise, the migration of potential accountants to other careers is likely to continue, putting businesses at risk of having no hands on deck.
They can do this by keeping up with global technological trends and remodeling the idea of what it means to be an accountant.
Learn More About Retirement in Our Community
Looking to learn more about retirement? Controllers Council is a national community and platform of Controllers, Accounting and Finance professionals focused on accounting best practices, information and resources, recognition and networking. Membership has many features and benefits to propel your career and expertise, and to be an active participant in our exciting community. The Controllers Council Forum allows members to pose questions about advancing your career and other topics. Become a member today.