As financial controllers start their annual tax season prep and familiarize themselves with the latest regulatory changes, an old problem has begun to resurface. The nationwide shortage of accountants is putting a strain on businesses’ auditing capabilities and accounting functions, and it has been particularly detrimental to small and midsize firms struggling to siphon talent away from larger entities.
However, large enterprises have not weathered the accountant shortage unscathed, either. Instead, these organizations have turned to overseas hiring practices to fill their talent gaps and staff important accountant vacancies. Smaller accounting firms that traditionally serve family-owned companies and other small to medium-sized businesses (SMBs) are beginning to follow suit as well.
If your organization has been impacted by the ongoing accountant shortages, it’s likely that you have also considered exploring international talent pools to meet client demands for services.
But the question arises in whether overseas hiring is the long-term solution to the shortage or instead merely a quick fix that will get you through the 2023 tax season. Join us as we explore that very question and examine potential alternatives to overseas hiring.
How Severe Is the Shortage?
Just a few years ago, the financial sector was riding high. The accounting industry peaked in 2019, and the supply of accountants closely aligned with demand. However, in 2021, the total number of corporate finance workers, CPAs, and accountants plummeted by 17%, creating the ongoing shortage that is set to persist throughout the 2023 tax season and beyond.
Unfortunately, the long-term outlook is not positive, either. According to the United States Bureau of Labor Statistics (BLS), approximately 136,400 accountant and auditor vacancies will be created each year over the next decade. Therefore, it is very likely that the shortage will get far worse before it gets any better.
These annual vacancies can be attributed to several factors. Some will be created due to individuals retiring or leaving the workforce, while others will arise as the demand for accounting professionals grows organically. The BLS projects demand for accounting and auditing staff to increase at an annual rate of 6%.
The shortage is showing no signs of letting up, at least not anytime soon. While businesses can do little to address the industry-wide shortage, they can use a few creative tactics to fill their vacancies. One such approach involves overseas hiring.
Is Overseas Hiring Really the Answer?
The answer is yes and no. Overseas hiring is definitely a component of the solution to the accountant shortage, but it is by no means a one-size-fits-all approach that will solve every firm’s staffing woes. Instead, it should be used in conjunction with several other strategies to offset the ongoing lack of accountants.
In the short term, engaging in overseas hiring can certainly help businesses such as yours fill immediate vacancies and get through the 2023 tax season, but the global talent pool, much like the domestic one, will eventually begin to dry up.
Remember, your business is not the only firm looking beyond the United States that is in search of talented accountants. Other small to medium-sized firms are beginning to do the same, and larger organizations have used this practice for years.
Alternative Solutions to Remedy Accountant Shortages
If you need to source talent now and are struggling to find it domestically, you should certainly consider hiring international accountants. Still, you should also look to use several other strategies, such as:
Implementing New Technology
Investing in new accounting solutions that include artificial intelligence (AI), machine learning (ML), and automation tools is an excellent way to do more with less. These tools empower staff members to automate traditionally tedious, labor-intensive workflows and reduce the need for manual input.
When exploring potential solutions to replace legacy software, ensure that it integrates with any existing technology that you plan to keep around. Such a solution will provide real-time visibility into your operations and enable your accountants to operate with greater efficiency.
Upskilling Existing Staff
Upskilling line-level staff and turning them into accountants is a process that works to solve several business challenges simultaneously. Most notably, it is a great way of cultivating home-grown talent and filling your vacancies. Additionally, upskilling will foster feelings of loyalty toward your brand, ultimately leading to less turnover and increasing overall company morale.
Optimizing Your Retention Rates
Whether you manage a small team of accounting professionals or a rapidly growing mid-sized firm, attrition can be detrimental to your productivity. That is why you should proactively work to optimize retention rates and resolve any absenteeism issues as soon as they arise.
Connect with staff members that have recently resigned or have expressed their intent to leave. Conduct an exit interview, gather feedback, and identify ways that you can improve your retention rates.
Overseas hiring can definitely help you contend with the ongoing accountant shortage, but it is not the only solution you should be exploring. Combining multiple strategies will help you solve your short-term staffing issues, get through the 2023 tax season, and promote the long-term continuity of your business.
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