The accounting, CPA, and corporate finance industry is facing an accountant shortage. While the job market has been growing steadily since the recession of the 2000s, many accounting departments and CPA firms have struggled to find qualified talent to fill their ranks.
This disparity could spell trouble for the industry, where even advanced technology has yet to replace the decision-making power of the human mind.
What is the reason for this accountant shortage? What can be done to remedy the situation? In this post, we’ll address these two questions, while also offering practical strategies for retaining qualified staff.
Why is There an Accountant Shortage in 2021?
The CPA shortage doesn’t stem from any one factor. Instead, it represents something of a “perfect storm” of issues affecting the industry. Here are several reasons why there is a growing shortage of accountants in the workforce today.
Mass Exodus of Retiring CPAs and Accountants
Now that they’ve reached retirement age, “Baby Boomers” are leaving the workforce. The AICPA estimates that 75% of today’s public accounting CPAs will retire in the next 15 years. Of course shifting Baby Boomer demographics impact every industry. What is troublesome to the CPA and accounting industry is the ability to attract and retain younger professionals as the new “CPA pipeline” was the lowest in more than 13 years (2021 AICPA Trends Report), Hence the growing exodus will only widen the gap between the job market and the pool of available candidates.
Assumptions About Technology
As we hinted earlier, there’s been an assumption that some portion of accounting processes can easily be handled using automated processes and advances in accounting-related software. Even the word “bookkeeping” seems quaint when financial work is often conducted through a screen.
But no technological advancement can replace the need for human judgment. In some cases, legal stipulations may require that a human professional make decisions regarding the company’s books.
Too Many Specialists, Not Enough Generalists
College graduates often come to the workforce unprepared. While their academic coursework may have been rigorous, their training has been so specialized that they lack the general business skills that many CFOs are looking for.
The Profession’s Branding Issue
Ultimately, there are not that many young adults pursuing a career in accounting. According to a 2019 report from the American Institute of Certified Public Accountants (AICPA), the number of students taking the CPA exam has declined precipitously in the last 10 years.
This CPA shortage could be due to the profession’s “image” issue. Boomers often malign millennials as being overly eager for promotions and status. The truth is that many millennials want a rewarding career that lets them leave a mark on the world.
Many of these same young adults grew up hearing about financial scandals and corruption, which has made it difficult for them to seriously consider pursuing a career as an accountant.
How to Attract and Retain Accountants
The accountant shortage will only worsen unless more young adults are brought into the accounting profession. What are some ways that accounting firms and corporate finance departments can attract and retain more young professionals?
Offer a Sense of Purpose
Today’s emerging adults want to change the world. At first glance, the world of accounting often seems to be merely clerical. This gap must be closed to encourage more young people to consider accounting as a career.
Accounting firms and departments will have to offer applicants a broader purpose than just “keeping the books.” Young adults will be attracted to organizations whose values match their own, especially ones that can connect their employees to the company’s larger purpose.
Offer Remote Working Options
Millennial workers want a greater work-life balance. One way to achieve this is to offer remote working options. This doesn’t have to be a permanent remote arrangement, but young adults will appreciate greater flexibility in their required office hours.
Learn more in Should Corporate Finance Switch to Long-Term Remote Work?
Offer a Clear Path to Advancement
For many new accountants, their first job is a stepping stone for their entire career. Unless your company can provide a clear path for their future, many young adults may simply step from a job to join another company.
Additionally, college students must be able to visualize a lifelong career in accounting before they’re willing to commit to a costly education.
Does the Future Lie in Outsourcing?
Traditionally, companies have relied on a staff accountant to help manage their books. But the American business landscape is shifting. Many businesses have found it to be more cost-effective to outsource their accounting needs to private accounting firms.
In the years ahead, we’ll almost certainly see more of this trend. An accounting firm is ideal for today’s specialized graduates, who can use their professional skills without being burdened with “other duties as assigned.” While specialization can be problematic when a person is working for a company that expects diverse qualifications, a highly specific skill set can be an advantage in the world of outsourcing.
Accounting and Today’s Job Market
There is no one-size-fits-all solution to dealing with the accountant shortage. While technological innovations have helped to close the gap, there will always be a demand for skilled workers. If you know a young adult, encourage him or her to consider a career in accounting. In an unstable job market, this career path just might offer some stability and purpose.
Looking to learn more about today’s job market? 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. Discuss topics like today’s job market and more in our forum. Become a member today.
What Will Finance Talent Expect after a Full Return?
Upskilling Your Accounting Staff for the Recovery
Return to Work: Three Attributes to Instill in Employees
Lots of young graduates find fulfillment in adding value in the ever growing world of FP&A and Finance at large. Needless to say, the increase number of young startups and turn arounds have the need for people that can articulate margins, units of economics, and other metrics more so than local GAAP or IFRS. Not that they consider it unimportant, but metrics takes priority in a world where most young companies are trying to secure funding.
I guess you could look to the pool of older and experienced accountants looking for work that companies and firms discriminate against. I am a degreed accountant with years of experience in many different industries, including tax, but I can’t get arrested. I left the workforce in 2018 to care for a terminally ill parent and I have spent two years trying to re-enter the workforce to no avail. There are thousands of people just like me that could close the gap but since we are long-term unemployed or over the age of 30, we aren’t considered viable job candidates any longer.
I would be willing to interview you.
What is your contact information?
There seems to be a contradiction embedded in this article. First, a statement was made that many millennials want a rewarding career that lets them leave their mark on the world. Shortly following that statement, it was written that “they grew up hearing about financial scandals and corruption…” If there was ever a way for millennials to leave a mark on the world, wouldn’t it be to clean up the “image” issues mentioned within this article?
I’m sure there’s other (more fulfilling, more satisfying) ways for educated millennials to leave their mark on the world… *eye-roll*…..
It’s all BS. I’m in the accounting world in senior management (not partner) and have worked for reginal to big 4 firms. They always fire a bunch of people and let the rest get burned out. Then they go crying that there is a shortage of accountants. I’ve referred over half a dozen people with good resumes and nobody ever receives calls from HR. At the beginning of the pandemic, my firm laid off dozens of people and froze wages and no bonuses. They ended up making more money than pre-pandemic by working us like dogs and stressing everyone out. We never got the backpay or bonuses. Partners refuse to take any responsibility for hiring or training and blame everyone else. They hire interns to do jobs that should be assigned to experience associates or senior associates because it’s cheaper for the firm.
Why will is NO ONE talking about the real issue here. CPAs require 150 credit hours, which is roughly 5 years of school. Most entry level staff accountant gigs pay 40K, which is a joke considering it took 65K worth of education to get the job. I know so many classmates who never entered the field of accounting because they couldn’t afford to leave their waitressing or bartending job to work in the field they studied. Firms and companies need to wake up and realize that they are not going to foster a profession if they keep paying folks like crap.
I wish I could upvote this comment a million times. After 23 years in the field it amazes me how accounting firms as a collective have no spine and keep under billing for their work. If they had the stones to charge the way attorneys do we all would do better.
No clue what they are talking about. Job market is harder than ever. Although there is a shortage of low skilled workers there no shortage of skilled workers, such as CPAs. I am keeping my license but have abandoned trying to work in the industry.