How much of a threat is the talent shortage to the accounting profession?

There is an accounting shortage in the US.

The American Institute of Certified Public Accountants (AICPA) estimates that about 75% of CPAs would have reached retirement eligibility by 2020. Coupled with a steady decrease in new students majoring in accounting, firms are facing a significant talent shortage.

“Firms have got a lot of other work that is important for their client needs and they are stepping back and looking at their business models and saying, what space do we want to be in?” asks Sue Coffey, CEO of Public Accounting for AICPA & CIMA.

While the same shortage has not yet hit the shores of the UK, the profession has not grown in popularity in a number of years and the number of younger people entering the profession is starting to dwindler. This shortage is a result of various factors, including voluntary resignations, the retirement of Baby Boomer accountants, and a lack of interest among young people due to misconceptions about the profession. As a result, there will be a competition for talent, especially for larger international firms, in 2024.

In response to the talent shortage in the US, the AICPA has formed the National Pipeline Advisory Group, a collective of accounting stakeholders tasked with shaping strategies to address the profession’s talent shortage. The group’s work will be informed by technology, surveys, and in-person forums to solicit insights from diverse groups nationwide.

This initiative demonstrates a proactive approach to addressing the talent crisis and could serve as a model for other firms.

Time for a rebrand?

One key strategy for attracting new talent to the accounting profession is rebranding. Traditionally, accounting has been seen as a mundane and monotonous profession. However, today’s accountants are far from that stereotype.

They are forward-thinking individuals who leverage technology, possess strong analytical skills, and play a crucial role in driving business success. Firms need to emphasize these selling points and showcase the exciting and diverse opportunities that the profession offers.

Accounting is no longer just about crunching numbers. It requires individuals who are tech-savvy and can think critically to solve complex business problems. Janet Malzone, the national managing partner of audit services at Grant Thornton, agrees and suggests that the profession should be rebranded as a technology profession, reflecting the significant role technology plays in modern accounting practices.

The AICPA & CIMA, for instance, are preparing accounting professionals with learning programs and resources to expand their competencies. They are also on track to launch a new CPA exam in January 2024, embedding critical data and technology concepts into the exam. This focus on innovation ensures the profession remains relevant, resilient, and trusted.

Emphasising the selling points

To attract new talent, firms must highlight the unique and compelling aspects of a career in accounting.

Jim Proppe, managing partner at Plante Moran, believes that many high school students are unaware of the exciting and dynamic nature of the profession. He emphasizes the opportunity to work with smart, high-energy individuals and gain diverse industry experience.

Promoting transferable skills

Accountants possess a wide range of transferable skills that make them valuable assets to any organization. Today, the role of accountants extends beyond technical accounting tasks. They have the ability to analyse data, identify trends, and provide strategic insights that drive business decisions. These skills are highly transferable and can open doors to various roles within a company.

Accountants with a broader skill set can venture into different functions within an organisation. They can contribute to sales and services operations, participate in process improvement initiatives, and drive digital transformation. Firms should emphasize these transferable skills to attract individuals who are seeking dynamic and versatile career opportunities.

Setting realistic salary expectations

Compensation is a crucial factor when it comes to attracting and retaining talent. However, there can be a disconnect between the salary expectations of recent graduates and the reality of entry-level accounting positions. According to Robert Half’s survey, some candidates have unrealistic salary expectations, often influenced by friends in other professions who may earn higher salaries.

To bridge this gap, firms need to educate students about the career progression in accounting. While starting salaries may not be exceptionally high, the profession offers a stair-stepped career path with opportunities for growth and increased income over time. Setting realistic salary expectations early on can help manage candidates’ perceptions and attract individuals who are genuinely interested in the profession.

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