Several recent staffing firm studies have found that the accounting staffing shortage is very real. There are tens of thousands of fewer accountants and auditors than needed in the U.S. “Hiring managers will have to be creative because the sector’s weak talent pipeline isn’t sufficient for current and projected needs,” says SHRM’s Kathy Gurchiek.
Here’s a snapshot of what’s happening with accounting staffing: U.S. Bureau of Labor Statistics data shows that more than 300,000 accountants left the profession during the first two years of the pandemic. The retirements and career switches continue to this day. At the same time, there is a continued downward trend regarding the number of graduates with accounting degrees entering the workforce each year. The American Institute of CPAs (AICPA) reports that graduation rates were down 7.8% in 2021-22 from the previous year.
With less than 50,000 accounting graduates entering the workforce yearly, the remaining deficit is staggering. There has been a sharp decline in those completing the additional CPA exam process as well. The number of candidates who took the Uniform CPA Examination in 2022 was about 67,000, which is down from 72,000 in 2021.
CFO Dive reports on a recent study that shows fewer than 1% of small- and medium-size CPA firms can find enough qualified U.S. candidates for employment, forcing them to hire workers overseas and automate basic tasks using technology. But aside from seeking help from foreign lands and robots, there are other ways to combat the accounting staffing crisis. Here are a few:
Offer (truly) competitive pay. The Wall Street Journal reports that starting salaries for entry-level accounting professionals and auditors in the U.S. rose 13% to nearly $61,000 a year in 2022, compared with increases of 4% in 2021 and 2% in 2020. When this data from Revelio Labs Inc. was reported in March 2023, entry-level pay had climbed again. This time, by a whopping 21% to almost $67,000 by early 2023.
Be worth working for. “Accounting and auditing jobs have been long viewed by people in the profession as underpaid, undervalued and less dynamic than positions in tech, investment banking and private equity,” WSJ’s Mark Maurer writes. You must have a strong command of your culture and values to combat this accounting staffing challenge. It’s also essential to maintain attractive benefits and perks. At the top are remote and hybrid work arrangements, popular for all age groups and job levels. About 34% of finance and accounting professionals are motivated to search for a new job because of remote work options.
Hire and foster new talent. More and more firms are signing accounting students before college graduation. They’re also “giving entry-level and more junior accountants more responsibility than ever before” and promoting them faster, says Maurer. Industry experts are envisioning alternatives to prohibitive CPA credit-hour requirements, which equal about one additional year in school. In the meantime, many employers offer CPA career path assistance and accelerator programs to attract entry-level prospects and help them reach CPA status. Consider re-engineering your hiring strategy in the areas of accounting staffing to address these changes.
Keep unconscious bias in check. Today’s accounting graduates may not look, act, or be educated the way you expect. Master’s degrees earned at private institutions in 2022 fell 10.9%, but not nearly as much at state schools (where there was a 3.3% decrease). The number of Hispanic/Latino graduates is increasing as well. If you’re holding out for particular “culture fits,” including accountants who fit a gender, race, or socio-economic type, you may miss out on great talent.
Hone your temporary staffing strategy. The economy remains touchy, which means permanent hires to fix an accounting staffing deficit can feel too risky. Temporary staffing can help, but it’s useful for other reasons, too. For instance, you may find a surprising amount of experience and skills in the temporary staffing pipeline right now. About 17% of today’s retirees are considering returning to work, but many also want to avoid the permanency of a full-time, permanent job, so they find contract and temporary work ideal. Temporary talent can be found at all levels in accounting staffing, from entry-level to the C-suite. Fractional and interim CFOs can be a great way to temporarily fill top positions requiring expertise and experience.
Pipeline challenges for accounting staffing won’t be remedied anytime soon, so if you don’t have a long-term strategy to tackle it, including both long-term and short-term hiring strategies, it’s time to make it happen.
