You’ve likely heard about—or experienced firsthand—a shortage of accountants. So what gives? Where did all the accountants and prospective accountants go? And what can you do if you experience talent shortages in your firm?
Why is there a shortage of accountants?
Two factors contribute to the accountant shortage. One, CPAs are retiring or leaving the industry early. And two, there’s a decrease in the number of accountants entering the workforce.
Here’s a closer look at these reasons for the accounting labor shortage.
1. CPAs are retiring or leaving the industry early
According to a 2022 The Wall Street Journal article, over 300,000 U.S. accountants and auditors left their jobs in the past two years, a 17% decline.
There are a few reasons for this mass exodus:
- 75% of the CPA workforce reached retirement age in 2020
- Experienced accountants are taking jobs in finance and technology, according to SHRM
- Some accountants left during the Great Resignation, according to Business Insider
2. There’s a decrease in the number of accountants entering the workforce
At the same time as this mass exodus from the field, there’s not enough new talent coming in to fill the gaps.
According to a recent report from the AICPA (American Institute of CPAs®), the number of accounting degree completions was lower in the academic year 2019-2020 than in previous years. In 2019-2020, the total number of Bachelor’s and Master’s accounting degree completions was 72,923, the lowest in a decade.
In addition to fewer accounting degree completions, the AICPA also saw a drop in the number of CPA exam candidates. Between 2019 and 2020, there was a 17% decrease in new CPA exam candidates, which the AICPA attributed to the pandemic.
Although the pandemic is a significant reason for the decrease in accountants and CPAs, it’s not the only one. Other reasons include:
- Pay: According to SHRM, the lure of better pay can contribute to the shortage of accountants. Financial accountants’ average salary is $56,320, which can be lower than in other business areas.
- Busy season: When people think of accounting, busy seasons—and the long hours that come with it—often come to mind. When is busy season for accountants? The busy season generally occurs during the first quarter, and the long hours (sometimes up to 100 hours per week) can be offputting to students.
- Stigma: Accounting can get a bad reputation as “boring” by people who think it is only monotonous data entry and other tedious tasks.
- Hurdles: Other hurdles (e.g., the high credit-hour requirement to take the CPA exam) might hinder students from joining the field.
What is the AICPA doing about the accounting talent shortage?
The AICPA made attracting new talent to the accounting profession—specifically CPAs—one of their 2022 primary strategic initiatives. These initiatives include attracting more high school and college students, providing education and support services, and collaborating with those working with CPA candidates.
In addition, the CPA exam is getting a facelift in 2024 … or at least several changes to the infrastructure. According to CPA Practice Advisor, there will be a new infrastructure (including eliminating the essay question), new discipline sections, and a greater focus on technology, such as automated tools. The emphasis on technology requires candidates to be proficient in advances in the accounting field.
What can you do if a shortage impacts your firm?
If the accounting skills shortage impacts you, your instinct may be to work long hours and avoid taking time off work.
But you have options to help you maximize your efficiency and get more hands on deck.
1. Use technology
How often do you use technology in your day-to-day?
Like many industries, technological advancements have propelled accounting into a new era. Gone are the days of pen and paper and spreadsheets. Now, accountants can use innovative accounting and payroll software technology to do the heavy lifting.
A PWC report called Hi, Robot found that technology and automation free up those “boring” responsibilities like transactional and data entry tasks. This can let you focus on “higher-value work” like analysis and compliance, according to AICPA’s vice president of firm services.
Still resisting technology in accounting? Remember that technology will become part of the official CPA exam in 2024, solidifying it as integral.
Technology in accounting is quickly becoming the standard, which is great news for firms facing an accounting labor shortage.
Through technology like payroll software, you can offer payroll services to clients without getting bogged down by manual calculations, payroll tax filings, and tax deposits. Payroll for accountants handles the details so you can focus on the higher-value work—even if you’re dealing with a labor shortage at your firm.
Accountants who use Patriot’s accounting and payroll software for accountants enjoy discounted pricing, consolidated billing, and more.
2. Get flexible
Employees, including accountants, value the flexibility of remote work. If you’re struggling with a labor shortage at your firm, consider letting employees work partially or fully remotely.
Stay connected with remote accountants via online chat tools (e.g., Slack) and video conferencing systems (e.g., Zoom). Use accounting software and payroll software with unlimited users and user-based permissions to handle workloads digitally.
3. Expand your hiring net
The number of accounting graduates in the 2019-2020 academic year may have been low, but AICPA found that accounting programs are optimistic about future enrollments.
If you need help hiring accountants, consider recruiting students enrolled in accounting programs. According to SHRM, firms are hiring students who complete Accounting 101 and Accounting 102 to fill part-time jobs and internships.
You can recruit accounting students by speaking to business classes and attending career fairs at your local university.
4. Offer education assistance
Consider offering education assistance if you hire accounting students to fill part-time jobs and internships. This employee benefit can help you recruit and retain students (and other employees).
Education assistance, or tuition reimbursement, lets you pay up to $5,250 tax-free toward an employee’s qualifying education expenses. The tax-free amount applies to tuition, fees, books, supplies, and equipment. And through 2025, you can make tax-free student loan payments up to the IRS limit.
Are you looking for a reliable partner to help you streamline your payroll services? Patriot Software’s Partner Program offers discounted pricing on payroll software for accountants, free USA-based support, and more. Call us at 877-968-7147, option 41, to learn more!
This is not intended as legal advice; for more information, please click here.