How practices are adapting to the ongoing accountant shortage

The news is filled with stories of worker shortages, among them a significant shortage of accountants. As of September 2023, the U.S. national unemployment rate was 3.8%, so finding new talent is tough. However, the lack of accounting staffing, especially certified public accountants, could have an impact that reverberates throughout the economy.

Key to a working capitalist society are sound, accurate accounting practices. So what happens when there is an accountant shortage?

Let’s take a look at:

• Challenges current accounting staffing faces
• Reasons the accountant shortage is likely long term
• Accounting shortage solutions practices and firms are implementing
• How automation helps handle the shortage of accountants

What’s going on in the world of accounting staffing? 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. For many prospective accountants, the math simply doesn’t add up.

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 has been somewhat stagnant for years. 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.

Due to the shortage of accountants and fewer entering the workforce, many are spread thin to manage the increasing workload. In the past 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 the accountant shortage last? Will things settle down as the current economic woes subside? Well …

As the world responds to residual 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.

Large firms and small practices are implementing a plethora of changes to deal with accountant staffing issues, 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 flexible 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, particularly automation. Thankfully, advances in technology are helping some accounting firms automate many of the tasks dragging down productivity and revenue.

This is especially true for daily processes previously done manually, such as managing and filing sales tax returns. The right software can automate many of the redundant tasks accountants are required to complete for each account. By handling routine information and data processing through automation, staff is freed up to work on more valuable problem-solving or revenue-generating tasks.

And automation helps with more than expediting manual processes. By removing the opportunity for human error, technology and automation can help increase accuracy to protect the practice and prevent even more work down the line.

The applications for technology extend beyond sales and use tax. Technology is also streamlining the property tax compliance process. Thanks to automated property tax software, firms can offload cumbersome jobs like data entry and free up accounting professionals to spend their time on clients and revenue, rather than housekeeping.

Technology and its adoption, particularly automation, is likely to remain a sticking point for accounting professionals new and experienced alike. In fact, a recent survey showed more than 60% of accountants feel technology is more important to job satisfaction now than two to three years ago. So not only is technology becoming vital to getting the job done, it’s also a key way to attract fresh talent.

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. Until 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. That’s what makes technology such a crucial tool in solving the accountant shortage.

Because the causes of the accounting shortage are varied and complex, the solution must be as well. Reducing burnout, right-sizing compensation, and increasing job satisfaction are all necessary steps to fixing the shortage of accountants, but the first and most important step often starts with getting on board with the right technology.

This article was updated as of November 3, 2023.