Steps firms can take to minimize the effect of the lack of accounting professionals

How practices are adapting to the ongoing accountant shortage

The news is filled with stories of worker shortages. In most parts of the country, businesses are plastered with “Now Hiring” signs. As of October, the national unemployment rate was sitting at 3.7%, so finding new talent is tough. The internet is rampant with stories of angry customers harassing overworked employees about service delays (don’t do that).

Less seen, but arguably more impactful, is the lack of accounting staffing, especially certified public accountants.

Key to a working capitalist society are sound, accurate accounting practices. So what happens when we don’t have enough accountants?

Let’s take a look at:

  • Challenges current accounting staffing faces
  • Reasons the accountant shortage is likely for the long term
  • Accounting shortage solutions practices and firms are implementing

Challenges current accounting staffing faces

What’s going on in the accounting world? While a career in accounting has long been considered a stable, respectable job, the reality is that it’s really hard to be an accountant. 

Accountants require a bachelor’s degree, and CPAs need an additional 30 college credits. That amounts to a fifth year of schooling before students even qualify to take their CPA exam.

College graduates can expect to spend the first five or so years on the lower rungs of the career ladder. The hours are long and the pay … isn’t great. Kristin Gayoso, a CPA featured in an episode of NPR’s The Indicator from Planet Money, pointed out that based on the hours she worked, her salary came out to less than minimum wage. 

With fewer accountants entering the workforce, many are spread thin to manage the increasing workload. In the last few years alone, accountants have had to significantly adapt policies and procedures in response to:

  • Tariff wars
  • Combat wars
  • Brexit
  • The volatility of cryptocurrency and NFTs
  • Housing market dips
  • Environmental protections
  • The pandemic
  • Everything else economic and geopolitical

In addition to global economic factors, day-to-day influences have made accounting jobs more challenging:

  • Remote work has created additional security challenges
  • Many accountants have left the profession in The Great Resignation
  • High turnover has led to a loss of institutional knowledge, which in turn, means routine tasks take longer as new employees ramp up

So how long will accountants be in this situation? Will things settle down as the current economic woes subside? Well …

Reasons the accountant shortage is likely for the long term

As the world responds to pandemic impacts, political upheaval, and economic shifts, most industries are reckoning with people shortages. However, there are several factors affecting the accounting industry specifically.

One thing accountants in particular face is the aging population among their ranks. Estimates are that roughly half of accountants are boomers, meaning a significant portion are retiring now and in the next few years.

Meanwhile, the number of people starting accounting majors or taking CPA exams has declined over the past few years. So while a large percentage of current professionals are exiting the ranks, there’s a severe shortage of accountants replacing them.

Another issue is the introduction of new career paths available to accountants. Traditional accounting roles are still very necessary, but companies are competing with other industries for a smaller pool of folks with accounting skills. For instance, the tech sector is providing more glamorous and higher paying jobs to new grads than traditional accounting firms.

And of course, the pandemic played a role in current staffing issues. Many accountants have reevaluated the long hours and relatively low pay for the amount of education and effort required for the field and have opted to leave it altogether.

Accounting shortage solutions practices and firms are implementing

Large firms and small practices are implementing a plethora of changes, including:

Recruiting students — According to that same episode of The Indicator, firms are offering scholarships to accounting students. They’re also tapping students from underrepresented groups and those majoring in subjects outside accounting and finance.

Investing in staff — Some companies are increasing base salaries to align with the number of hours required to complete the work. In addition to pay increases, companies are also offering better benefits, from more comprehensive health coverage to unlimited paid time off.

Spreading the work around — In the past, some of the more tedious tasks were relegated to junior accountants. Now, even partners are rolling up their sleeves to meet deadlines. While this does help to evenly distribute the workload, it also has the potential to increase burnout across the board.

Facilitating remote work — Once firms get the proper security processes in place, they open up the option for accountants to work remotely on a broader scale. This not only increases the flexibility for staff to work at home or in the office, it also gives firms a chance to hire talent from outside their geographical area.

Another way accounting firms and departments can combat accounting staffing shortages is by relying on technology. Software has a dual benefit:

  • It can help streamline daily processes, increasing accuracy and efficiency for existing staff.

It can automate many of the redundant tasks accountants are required to complete for each account. By handling routine information and data processing, staff is freed up to work on more interesting problem-solving or revenue-generating tasks.

Takeaways from the accountant shortage

While accounting firms, practices, and departments are already feeling the crunch of the shortage, its effects are likely to get worse before they get better. Unless college and university programs see increased enrollment of students en masse, companies are going to have to continue to innovate within existing teams.

But before an influx of accountant candidates materializes, the industry is going to have to figure out how to make accounting a competitive field again. 

Because the causes of the accounting staffing shortage are varied and complex, the solution must be as well. Reducing burnout, right-sizing compensation, and increasing job satisfaction are all necessary steps.

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