Recruiting and retention in accounting: 'We've got a lot of work to do'

Accounting firms in Illinois are aiming to attract more young people to join the profession as the talent shortage continues.

The Illinois CPA Society held its annual summit this week in the Chicago suburb of Rosemont, where members heard from ICPAS president and CEO Geoffrey Brown and chair Jonathan Hauser during a keynote address Wednesday. They previewed the talk for Accounting Today earlier this week ahead of the conference (see story).

"We've been talking a lot about CPA exam candidates," said Brown during the keynote. "We have the new exam coming online in the winter, but this past year we've got a couple of things that we need to be paying attention to."

He pointed to statistics from the American Institute of CPAs that found there were 67,000 unique CPA exam candidates in 2022, down 7% from 2021. The number of unique CPA exam candidates is up 3% this year, Brown noted, but it remains near record lows. The number of first-time test takers is up 6% this year, but still near record lows. The number of CPA exam sections is going up with the revamped exam set to start in 2024, which may explain the increase in test takers this year, as typically happens the year before a new exam comes online. 

"We've got a lot of work to do in terms of telling the story and getting young people engaged and thinking about majoring in accounting and then pursuing CPA licensure," said Brown.

He believes the accounting profession needs a national talent management strategy like some other professions. "It's interesting to me that the accounting and CPA world didn't have a permanent workforce development function that's existed for quite some time in the medical world, both for the doctors and nurses, and definitely exists in the legal profession," said Brown. "The fact that we didn't have that as a permanent function within the CPA world really sets us behind a little bit. This isn't the type of thing that you can staff up in a crisis. You need to make investments in that and have care and feeding for the long term. It really delivers when you need it, and then you can start focusing on higher-value issues when you're not in a crisis."

He noted that the AICPA released a 12-point Pipeline Acceleration Plan this spring. Last week the institute and the National Association of Boards of Accountancy announced that Tulane University was going to be their partner with the Experience, Learn and Earn program, which gives young people the opportunity to earn up to 30 credit hours through online self-study while they're working (see story). "That's one example of some creative thinking," said Brown. "It's an example of ways that we can step back and really think about how we're going to do things differently to make an onramp for young people to join the profession."

ICPAS chair Jonathan Hauser, who is a partner at KPMG, is a member of the AICPA's national Pipeline Advisory Group. He agrees with the idea of reaching out to high school students to tell them about the accounting profession and recalled how he first learned about accounting through a teacher at his high school. 

"Having teachers at that level in the high schools give students an exposure to accounting is so important," he said. "Getting STEM designation for accounting could make a big difference in high schools."

He believes transparency with young people is just as important. "We have to continue to be transparent with the next generation on what their opportunities are," said Hauser. "We're sometimes so concerned about making sure that we're focused on retention and keeping people so that the work gets done that we forget about how we also make sure that we're giving them the right work so that they can advance their skill set. The transparency comes from talking about what the opportunities could be. They don't have to follow a straight path. They can make left turns, check something out and come back and find that they've got a better alternative out there in another area of accounting."

He often does student recruiting for KPMG. "When I interview students, I always say getting into accounting is like opening the door of a skyscraper,"  said Hauser. "You've gotten into the building. There's 100 different floors and 100 different doors on every single floor that you can go check out. I really feel like that's what accounting offers to young people."

He also believes accountants need to be more transparent about the opportunities on the financial side. "My generation and older are hesitant to talk about what the financial windfall could be in a career of accounting," said Hauser. "We've got to be a little bit more open to that because it can be such a financially rewarding and financially secure opportunity for people."

Even though the starting salaries may not be as high as in some fields, many accountants fare well later in their careers. "Long term, you're going to forget that you didn't have the same starting salary as somebody in finance," said Hauser. "We've got to be a little bit more open about that."

Expanding with DEI

Brown began serving as leader last December, succeeding long-time president and CEO Todd Shapiro. He was previously CEO of the National Association of Personal Financial Advisors. He has been learning more about the CPA profession this year, and believes it's important to expand diversity in the profession, which will help draw in more young people. 

"One of the things that's a personal passion of mine is just trying to make an impact when it comes to diversity, equity and inclusion and belonging," said Brown. "One of the things that attracted me about this role was the fact that this organization has a long history of focusing on DEI."

He noted that ICPAS has done research reports on DEI that have had an impact, most recently last year.

"I think that's incredibly important," said Brown. "We've developed programs to help young people integrate themselves in the profession, and now we're looking to the future of what's the next iteration of that? Later this fall, you'll hear about this next program that we have coming online that's really going to help meet the needs ... that members from diverse backgrounds are having once they start careers in public accounting, and so we're really looking forward to that. We've been a leader when it comes to granting scholarships. But now we're really turning our attention to the future. We know that DEI is about more than just race and gender, so we need to look at a broader spectrum of diversity issues to help meet our pipeline needs."

Among those areas is expanding opportunities for neurodivergent accountants. ICPAS has also been partnering with the Center for Audit Quality on initiatives like the CAQ's Accounting+ and Bold Ambition programs for expanding diversity in the profession, he noted. Brown has also been working to spotlight the accounting profession at local high schools. He recently visited Englewood STEM High School on the South Side of Chicago, where most of the students are African-American, with a group of CPAs. 

"There were a lot of young people in this class that hadn't even considered careers in accounting or majoring in accounting," said Brown. "Most of them raise their hands to say, 'I don't even know what a CPA is. I've never met a CPA. My parents don't work with CPA.' We were able to go down there and show them examples of four different individuals, all from diverse backgrounds that all had the common denominator of being CPA professionals, but they had different ways that they've lived out their career lives."

They included an office managing partner at KPMG, an audit partner from Deloitte, an educator from DePaul University, and an individual who began a career in public accounting and corporate finance and ended up starting his own consulting business that works with startup businesses.

"Just showing them the different avenues and opportunities that are created by being a CPA professional, I think it opened a couple of eyes," said Brown. "There was also a giant novelty check with a $5,000 college scholarship, and that never hurts."

Last year the society awarded about $320,000 in scholarships and outreach support to over 400 Illinois accounting students.

"That's just a drop in the bucket," said Brown. "As we're thinking about the future of that entity, we're thinking about what are the opportunities on the horizon? What's the big dream that's out there? What's the big ask for members of this community to help us get back and nurture and steward the next generation of professionals. We've already proven that we can make an impact through our academic scholarships, through our work with aspiring Black CPAs as part of the Black CPA Centennial. We had 70 CPA exam review course scholarships. Imagine a world where anybody from a background that wanted to sit for the CPA exam in Illinois didn't have to pay for it because they got a grant from the CPA Endowment Fund at Illinois. That would be pretty exciting. We have our Mary T. Washington Wiley Scholar Program. We had 37 individuals that participated in that program this year. Imagine a world if we could expand that to two different classes because we had the financial support to make that happen."

Retention is equally important, he noted. "We know that that's the next frontier when it comes to the pipeline," said Brown. "We've been talking about people coming into the profession, but we need to have a conversation about keeping the people that are already there. We know that the model was never built on 100% retention. Everybody's aware of that. But when we're talking about 30% to 35% retention, we need to do something different. ... So we currently have some research in the field that's really geared toward understanding the nature of the issue, and giving us some opportunities to provide guidance to the firm leaders and corporate finance teams. Preliminarily, it's interesting that the only segment where we don't have a retention problem is with nonprofits. That's just an opportunity for us to tell the story of the meaningful nature of the work that if you major in accounting and pursue a career as a CPA professional, that you can find a lane for you that's going to give you an opportunity to make a difference and give back."

He said a special report would be released on retention this fall. "This is going to be a huge difference-maker when you tie all those threads together, what's happening from a talent perspective and what's happening from an economic perspective," he added.