How firms are responding to the hiring crisis in accounting

Recruiting practices to combat the hiring crisis in accounting

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With fewer college students and graduates turning to the accounting profession for careers as older accountants are retiring en masse, a troubling staffing shortage has developed in the space. Firms are now getting creative in their recruiting efforts and are looking to hire candidates with nontraditional backgrounds.

A recent report from the Institute of Internal Auditors' Internal Audit Foundation, in partnership with Big Four firm Deloitte, surveyed audit managers and educators and found that more than half (58%) have hired a recent college grad for an entry-level staff position within the past five years. Of the 42% of respondents who indicated their internal audit function hadn't hired any recent college grads, more than half (58%) said they preferred to hire internal auditors with prior experience.

According to the report, internships seem to be the most promising way to fill the talent pipeline. Colleges and universities with students completing internships are more likely to place graduates in the internal audit profession. Among survey respondents who offer internships, 74% said their programs are designed to encourage future employment within the internal audit function.

"The need for new skills in areas such as data analytics, cybersecurity, and artificial intelligence will require casting a wider net to find new internal auditors," the report noted. "However, hiring habits are hard to break. Even as hiring managers acknowledge the changing skill sets for auditors of the future, eight in 10 still identify accounting as the preferred area of study for new hires."

The Indiana CPA Educational Foundation surveyed students at 11 Indiana universities and colleges to get their perspective on career development in accounting. Salary is a top driver for going into accounting and staying in the profession, along with job security, but student respondents also put high value on personal fulfillment and growth opportunities, as well as diversity. While 84% of the respondents indicated that working in an environment that's welcoming to people of all races, ethnicities and backgrounds is important, diversity was ranked higher in importance among non-white respondents.

For firms struggling to connect the dots between their hiring needs and the available talent pool, many are starting to consider widening their search to consider untraditional candidates. For example, Jim Boomer, the CEO of Boomer Consulting, suggests reviewing tasks at your firm to determine which do not need to be completed by a CPA.

Firms can broaden their search to include candidates with diverse backgrounds and skill sets, including technology, project management, data analytics, marketing, HR, and people with experience in the firms' niche industries. This approach alleviates the pressure on CPAs and introduces fresh perspectives and competencies into the firm.

"The accounting profession presents a significant opportunity to engage and attract the younger generation by offering diverse career pathways and opportunities for advancement," Richard Kopelman, CEO and managing partner of Atlanta-based Top 100 Firm Aprio, recently told Accounting Today's Daniel Hood. "Addressing challenges such as integration and synergy after mergers, talent development and retention focusing on diversity, equity, inclusion and belonging, and market differentiation and client retention are essential for firms to capitalize on this opportunity entirely. By effectively managing these aspects, accounting firms can position themselves as industry leaders capable of delivering exceptional value to clients while nurturing a culture of growth, inclusivity and excellence within the organization."

Read more about the staffing crisis in accounting and how firms are addressing the challenges.

Evaluating the need for CPAs

The talent shortage in accounting — with less than 1% of small to midsized firms able to find the talent they need, according to CFO Dive — is also affecting a firm's ability to attract new clients, retain existing talent and maintain operational efficiency.

A potential solution to this hiring crisis is evaluating the need for CPAs within some accounting tasks.

"In our experience, when firms look honestly at their processes, they find that at least 50% of the tasks within any given process do not require a CPA's expertise," writes Jim Boomer, CEO of Boomer Consulting. "These tasks are often repetitive and mundane and contribute significantly to job dissatisfaction among CPAs who would prefer to engage in more complex or client-facing work."

Read more:

Does a CPA really need to do it?

The benefits of the accounting pipeline problem

As the accounting industry grapples with a staffing crisis, some firms see it as an opportunity to outshine the competition and attract top talent.

"In an industry facing an escalating talent shortage, accounting firms have a unique opportunity to emerge as premier destinations for top CPAs," Eric Abati, CEO of San Antonio-based Regional Leader ATKG Advisors, recently told Accounting Today's Daniel Hood. "The winners in the battle for talent will be firms that not only attract but also retain an engaged talent base. These successful firms will achieve this by creating a culture that fosters mutual support, offers meaningful career opportunities, promotes team cohesion, and ensures both personal and professional fulfillment. Such firms are poised to establish a distinct competitive advantage for years to come. Simply put: Culture wins."

Aside from culture, other firm leaders emphasized different areas as places where firms can stand out in the war for talent. Top 100 Firm SC&H's chief marketing officer, Colin Kendall, for instance, highlighted the need to improve work-life balance, training and development, and hybrid and remote work options, while Richard Kopelman, CEO and managing partner of Atlanta-based Top 100 Firm Aprio, suggested investing in the rapid development of talent.

Read more:

Accounting's pipeline problem: An opportunity in disguise?

RSM’s untraditional hiring methods focus on personality traits

When hiring for RSM US's managed security services team, Todd Willoughby and Daniel Gabriel are looking for candidates with specific personality traits or characteristics rather than years of technology or security experience. These traits usually line up with former military and law enforcement personnel, with the firm then providing the technical education.

"Someone inquisitive, who doesn't accept the status quo," is how Gabriel, a principal in security privacy and risk consulting at the Top 10 Firm, describes the ideal candidate. "We are looking for a profile of the individual — not necessarily someone with years of security experience."

The RSM team has also been targeting talent to support RSM Defense, the global managed security operations service that the firm launched in June 2021, which has a team of roughly 50 people serving 200 clients — and adds 10 to 12 more clients monthly.

Read more:

Practice profile: Strong on defense

Survey reveals college students’ thoughts on accounting careers

A survey released earlier this year by the Indiana CPA Educational Foundation polled students at 11 Indiana universities and colleges, with the majority in their sophomore, junior or senior years. Some 39.5% of respondents said social media has had an influence on their career choices, but research indicates Indiana candidates find the most influential experience is a work or internship experience, followed closely by a class or relationship with a parent or guardian.

The survey also found that creating supportive, healthy environments for staff should be a top concern if the accounting profession hopes to attract future talent. When asked to describe their long-term ultimate career goal, the most common responses among the students polled were CFO and partner in a public accounting firm.

"My ultimate career goal is to find fulfilling and rewarding work in the field of accounting that will enable me to positively influence the operations of a business or society and comfortably support a future family," commented one respondent.

Read more:

Accounting students influenced by internships, social media

Internal audit leaders still focus on student talent

The Institute of Internal Auditors' Internal Audit Foundation, in partnership with Deloitte, released a report at the end of April that surveyed a group of 305 internal audit managers and 64 educators. Their findings revealed that hiring managers tend to seek recent college graduates who have studied accounting (80%), followed by auditing (53%), business (44%), and computer science or information technology (43%). The most essential skills hiring teams look for, apart from experience and education, include business communication (78%), data analytics (53%), internal auditing (47%), and ethics or organizational governance (46%).

"In today's competitive job market, we are seeing some of the softer skills related to leadership and communication being prioritized by hiring managers," IIA president and CEO Anthony Pugliese said in a statement. "As evidenced in the report, internal audit is competing with some of the biggest names across the tech sector for graduates with backgrounds in AI, cybersecurity, and data analytics. The profession needs to work closely with educators to ensure the pipeline of incoming talent has the skills required to stay ahead of a rapidly changing risk environment."

Read more:

Internal audit leaders hunt for student talent