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Nurturing the Future of Accounting: Addressing Staff Shortages and Turnover
Within the realm of accounting, there exists a pressing concern regarding staff shortages and high turnover rates, stemming from a decline in the profession’s prestige. The declining number of people entering and staying in the accounting field is posing a significant challenge for public and private organizations. According to The Wall Street Journal, more than 300,000 U.S. accountants and auditors left their jobs in the past two years, resulting in a 17 percent decline in employed accountants and auditors since the 2019 peak.
Becoming an auditor has become increasingly arduous, leading to dwindling interest in the profession. Recent data reveals a significant decline in the number of candidates undertaking the Certified Public Accountant (CPA) exam. In 2022, candidate numbers reached their lowest point in over a decade, with limited improvement projected for 2023. The number of new CPA candidates dropped from 48,000 in 2016 to 32,000 by 2018. This decline is reinforced by a report from the American Institute of Certified Public Accountants, which highlights a steady decrease in students taking the CPA exam over the past ten years.
The “Image” Issue:
A primary factor contributing to the scarcity of CPAs is the waning appeal of the profession, particularly among the younger generation. Accounting no longer possesses the same allure or excitement it once did, failing to captivate the interest of Generation Z. Retiring Baby Boomers account for part of this exodus. However, it’s not just the older generation leaving the profession. The U.S. Bureau of Labor Statistics (BLS) reports that accountants in the 25-to-34-year-old age range and midcareer professionals ages 45 to 54 are also leaving the field. Furthermore, the rise of automation and accounting software fosters a perception that the profession is fading. The term “bookkeeping” seems antiquated as financial tasks predominantly occur through digital screens. These factors deter the new generation from embracing accounting as a viable career choice.
Long hours and the lure of better pay
Accounting firms have staff retention issues due to long working hours and lower pay compared to other industries. The traditional expectation of working extensive hours to advance in accounting firms no longer appeals to the younger generations, who prioritize work-life balance. The lure of better pay in alternative fields also contributes to the turnover. Although firms have responded by increasing salaries, starting pay for graduates in accounting still falls short compared to other business sectors. Overcoming these challenges requires addressing work-life balance concerns and offering competitive compensation packages to attract and retain talent.
While challenges persist, viable solutions exist to address the decline in prestige and tackle staff shortages and turnover within accounting firms:
- Emphasizing the Evolving Role: Accounting firms must proactively highlight the evolving nature of the profession, shedding light on opportunities for growth, innovation, and specialization. By showcasing diverse career paths and dispelling the notion of a stagnant or dying field, firms can attract fresh talent.
- Technology Integration and Upskilling: Integrating advanced technologies and accounting-related software enhances the efficiency and value-added services offered by accounting firms. By promoting the adoption of these tools and investing in continuous upskilling, firms demonstrate their alignment with technological advancements, appealing to tech-savvy individuals.
- Cultivating a Positive and Inclusive Work Environment: Fostering a supportive and inclusive workplace culture is vital to retaining accounting talent. Creating an environment that promotes work-life balance, professional development, and fulfillment ensures employees feel valued and motivated to remain within the profession.
- Leveraging Outsourcing Solutions: Collaborating with specialized outsourcing firms provides a strategic solution to address staff shortages and turnover. These firms offer access to skilled professionals, flexible support, and transformative solutions that alleviate internal resource constraints and optimize service delivery.
Quote:
“In a changing landscape, the accounting profession must adapt and reinvent itself. By embracing innovation, fostering an inclusive work culture, and forging strategic partnerships, we can attract and retain top talent. Our focus is on creating an exciting profession that offers growth opportunities and a meaningful impact in the business world. By partnering with outsourcing firms, firms can tap into a vast pool of specialized professionals, optimize resource allocation, and enhance profitability. “
Matthew Johnson, Chief People Officer, a leading accounting firm.
The decline in prestige within the accounting profession has resulted in staff shortages and high turnover rates, necessitating proactive measures to navigate these challenges. By emphasizing the evolving nature of accounting, integrating technology, cultivating a positive work environment, and leveraging strategic partnerships, firms can attract and retain skilled professionals. Together, we can nurture the future of accounting, ensuring its continued relevance and resilience in the ever-changing business landscape.