The accounting world presents a highly competitive landscape, where only the most skilled and prepared candidates succeed. With a growing number of STEM students opting to go in the direction of technology or investment banking, and a chilly economic forecast that is leading more accounting professionals to opt to stay put, accounting's long-standing talent issues just continue to look more and more insurmountable.
That isn't to say accounting firms have remained completely unmoved in trying to attract and keep new talent. Compensation offers have routinely gone up, while businesses have also more readily embraced remote work. Yet, enrollment in accounting programs nationwide has continued to sag. And, adding insult to injury, is the fact in 2020 75% of the existing CPA workforce head reached retirement age. So, to say that the accounting talent and recruiting pipelines need a dramatic rethink — and fast — is a serious understatement.
Age-old tactics like outbidding competitors for talent simply are not going to fix the enduring accounting shortage that the industry faces. Instead, accounting firms need to engage in a systemic overhaul of how they pull individuals toward the profession, keep them in it, and use them as advocates to bring others into the space in the future as well.
With that in mind, here are a few ways that the industry can address current people snags and build sustainable pipelines for the future.
Reducing educational barriers to entry
Accounting is renowned for its myriad prerequisites and certifications. Yet, while specialized skill sets are undoubtedly required in the space, are there ways in which these barriers for entry could be lowered and streamlined? The answer in many cases is yes.
Accounting could potentially be well-served in taking a page out of the book of other STEM verticals in its approach to talent needs. For example, in the face of their own talent issues, other highly specialized STEM fields such as software engineering and cybersecurity have moved away from traditional education paths more and more in favor of an intensive boot camp model where individuals are primed to enter the space in several months, not years. Of course, individuals will not have the entire breadth of knowledge that a seasoned vet will have. However, once they have completed their coursework, they will have a strong foundation that can be applied to honing their skills further once entering the workforce.
The amount of educational legwork CPAs face is legendary, and no doubt serves as a strike against accounting in the eyes of undergrads and job seekers compared to other STEM spaces. These schooling barriers haven't gone completely unnoticed, though, and creative plans are beginning to crop up. For example, states like Minnesota have begun exploring cutting the credit hours needed for a CPA from 150 hours to 120. But efforts like this can only go so far without national consensus.
Thus, it is imperative for the entire industry to engage in a dialogue about ways in which it can make attaining certifications more competitive as other industries seek to lower their own barriers to entry as well.
Focus on upskilling and compensation
Unlike some industries that may have 15 or more titles and salary levels, accounting by comparison is much less stratified and typically only includes a handful of titles and roles. That means accountants often face long wait times to move from one rung up to the next, and thus are more likely to leave in pursuit of higher titles and the bigger salaries that come with them. But what if we were able to rethink this model by tying compensation to skills gathering versus solely pegging it to rungs on the organizational leadership ladder?
Like every industry, accounting is facing more diverse needs every day as new disciplines and specialties continue to crop up. For example, accounting firms are now expected to handle everything from traditional functions like audit and international tax to emerging fields like ESG. Unfortunately, many organizations lack the needed talent for all of these spaces, and attracting qualified talent has become prohibitively expensive.
Herein lies an opportunity. Accounting firms should lean into this shortage by allowing new and existing recruits to engage in rotations through various divisions. From there, businesses can build salary and bonus pay structures to the completion of rotation-related goals like time spent in a division or the number of projects completed. This will allow employees to build their skill sets and feel their professional growth is being invested in and rewarded. Moreover, it will allow organizations to better retain talent and build their ranks in-house, as opposed to relying on outbidding the market for external talent.
Prioritize bench strength early
As noted above, unlike other STEM categories, workforce age is another significant factor working against the accounting profession's talent outlook. Yet, while the fact that a large portion of existing talent is set to leave over the next few years is well-known within the accounting industry, few businesses have adequate bench strength and transition plans in place.
Losing an expert is obviously never ideal; however, it should also be seen as an opportunity to promote internal growth. Unfortunately, many accounting businesses rely on a fast and loose approach to filling these gaps by turning to either high-priced external talent or existing talent that isn't properly equipped to take the reins.
Transitions may feel like a jolt out of the blue every time they happen, but they don't need to. Executing a seamless transition should start years in advance. Furthermore, these strategies need to be underpinned by a clear step-by-step approach where talent is nurtured through a consistent methodology to ensure preparedness for the inevitable moment legacy employees either move on or retire.
At the same time, businesses must build comprehensive programs whereby talent gaps are continuously assessed, anticipated, and filled proactively, rather than filled in a last-minute panic when veteran pros give notice — which is too often the case today. By switching to this long-term approach, accounting firms can take back more control of their talent forecast and showcase to existing talent that they are viewed as key assets for the "long haul."
The talent issues facing accounting are not going to be easy to solve. However, it is clear that after years of a receding talent pool, traditional tactics are not the answer. It isn't too late for accounting to reverse its talent issues. By being willing to get creative and take on an ambitious reinvention of their talent operations, accounting firms can become as competitive as they have ever been in the search for talent.
