The Great Accountant Shortage

Let’s talk about the accountant shortage. The U.S. is currently short 340,000 accountants. The American Institute of Certified Public Accountants (AICPA) estimates that about 75% of CPAs reached retirement eligibility in 2020. Retention of new and mid-career accountants is also an issue. “Coupled with a steady decrease in new students majoring in accounting, firms are facing a significant talent shortage,” states Accountancy Age.

And the ramifications? More than 720 companies, including Advance Auto Parts Inc. and LegalZoom.com Inc., cited insufficient staff in accounting and other departments as a reason for potential errors in 2023. “That’s up 30% from 2019, according to an analysis by equity research firm Hudson Labs for Bloomberg News,” reports Fortune’s Jo Constantz and Bloomberg. Contantz questions whether Lyft’s “market-roiling typo” in its most recent quarterly earnings statement to investors, which resulted in Planet Fitness Inc., Mister Car Wash Inc. and Rivian Automotive Inc. correcting theirs, too, could be a devastating symptom of the accountant shortage.  

The AICPA has assembled the National Pipeline Advisory Group (NPAG), tasked with researching and addressing this worsening talent crisis. The group recently released its findings on what could be the biggest question weighing on your mind: Why are new professionals not entering the field?

Here are the answers they uncovered:

• The ongoing high volume of work accountants have been experiencing makes a career in accounting feel more challenging than other careers might be (92%). 
• Students perceive that their starting accounting salary will not compete with other professions (79%).
• Inconsistencies in the makeup of the additional 30-hour education requirement detract from its value (75%) and present too great a hurdle (59%).  
• Students perceive the CPA Exam to be too difficult to study for and pass (69%). 
• Students don’t choose a career in accounting because they don’t know an accountant and lack access to information about the benefits of the career (67%). 
• Students aren’t attracted to an accounting career because they’ve heard negative things about the profession on social media (58%). 

The industry is working to resolve some of these broad issues behind the accountant shortage by looking hard at requirements, testing, state-by-state standards, and student engagement. What can employers do to attract and keep talent in the meantime? Based on the research, we suggest:

Finding ways to connect to young people and students in your community. Even encouraging your accounting and CPA staff to mentor could go a long way. “What we found is that young adults are not choosing accounting when they’re making career decisions in high school and college. Because, first, they really don’t understand what a career in accounting means. They don’t know what we do, why we do it, how we do it, the impact that we have on societies, communities, businesses, and individuals, nor do they understand the variety and the breadth of the opportunity our profession offers,” says Sue Coffey, the CEO of Public Accounting for AICPA & the Chartered Institute of Management Accountants (CIMA).

Have a great work culture and promote it. Some careers are considered fun and work-life-friendly. Let’s be real: Accounting is typically not one of them. But if you have a great work culture, a mission that employees can really get behind, and desirable benefits and compensation, that’s where you can attract and retain the best of the best. The Big Four accounting firm culture is known for long, exhausting hours, and many require constant travel and relocations. If your culture differs from these behemoths, you can set yourself apart. This CPA Journal article is filled with ideas about what millennials and younger generations look for in accounting jobs. Chances are, you tick many boxes that the Big Four do not.

Seek help and advice. The growing accountant shortage has reached unprecedented territory, so you’ll need brand-new tools in your toolkit and a mechanic who knows what they’re doing. You may need to seek an advisor and recruiters to help refine your culture and evaluate your staffing needs. You may need to address retention by promoting from within and backfilling positions with temporary or contract hires. Can some positions traditionally held by CPAs be reimagined, perhaps with the perk of helping the right candidate get their CPA designation? Maybe an interim or fractional CFO is needed to lead the charge? Be asking these and other questions to help you navigate.  

There is no getting ahead of the accountant shortage. It’s already here and will be exacerbated even more by an aging CPA workforce, declining enrollment in accounting programs, and a perceived lack of attractiveness of the profession among younger generations. Addressing this crisis requires a concerted effort from the industry to reevaluate educational requirements, enhance engagement with potential talent, and improve work culture to attract and retain the necessary workforce. While that happens, do whatever you can to appeal to the talent out there and keep them onboard and engaged.

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