The current shortage of accountants doesn't look like it's getting better anytime soon, which means it's time for finance leaders to make some tough decisions about the future of accounting and finance functions.
Let's begin with some eye-opening and alarming statistics:
- As of 2022,
over 300,000 accountants and auditors have left their jobs since 2020. - The
U.S. Bureau of Labor Statistics projects 126,500 additional job openings for accountants and auditors each year over the next decade. - Almost
75% of CPAs had already reached retirement age as of 2020. - The number of people sitting for the CPA exam fell
from 48,004 in 2016 to 32,188 in 2021 , marking the lowest point in 17 years.
These are sobering statistics that don't bode well for the future of a critical but rapidly evolving profession. But what's causing the conditions pushing accounting to the brink? For starters:
- The tug-of-war for accounting talent: With so much competition from tech firms and other high-paying industries, financial leaders are in a bind, trying to offer salaries and career opportunities that keep pace. Likewise, the allure of working on the next big app or groundbreaking artificial intelligence initiative can quickly make the prospect of crunching numbers feel pedestrian at best.
- Pay disparities and the overwork dilemma: Other fields typically offer starting salaries
at least 20% higher than entry-level accountants, making it nearly impossible for companies to compete for new accounting talent. Early career accountants often find their starting salaries don't make up for the steep hours expected of them. This results in hourly wages that don't match expectations for such a skilled profession, some even coming in beneath hourly minimum wage rates thanks to lower salaries and endless hours at work. - Pandemic burnout and the quest for balance:
65% of companies say accountant turnover has placed a greater burden on employees, 67% for turnover at the leadership level. Throw a recent global pandemic into the mix, and already stressful accounting roles have accountants rethinking their career paths. Now, jobs offering more flexibility and a healthier work-life balance are the benchmark. - The accounting educational hurdle: Imagine running a marathon where the organizers keep extending the finish line. That's what becoming a CPA can feel like these days. Obtaining a bachelor's degree is already challenging enough for many people. Include the extra 30 credit hours to hit the mandatory 150-hour mark for CPAs, and you see why many potential accounting graduates are choosing different paths.
Fewer accountants means faster change
With no end in sight to the shortage, enterprises and their leaders have already sprung into action, accelerating many trends that were already in motion. In essence, today's accountant crisis has hastened an inevitable, data-driven future.
Specifically, companies are increasingly relying on innovations and solutions like AI, ERP (enterprise resource planning) software, and automation — among countless others — to reduce manual workloads and let staff focus on more strategic tasks that need human insight and ingenuity.
The rise of data analytics in accounting
On the data side of the equation, the shortage is also fueling a shift in the traditional accountant role from a straightforward number-cruncher to a more nuanced, analytical position that drives business strategy through deep insights.
As a result, there's increasing demand for robust data analytics capabilities that can parse through and make sense of the mountains of data enterprises generate every day. This skill set is particularly crucial in transforming raw data into actionable, strategic insights and business intelligence that can help decision-makers steer the ship.
Recognizing the importance of data analytics, forward-thinking CFOs are increasingly upping the technology ante, helping accountants unlock new opportunities that offer greater value in their roles, all while pushing the boundaries of what finance organizations can achieve.
A call to action for finance leaders
Unlike the short-term challenges it poses, the long-term impacts of the accountant shortage present both challenges and opportunities. By leading the charge in technology adoption and emphasizing data analytics, leadership can not only navigate this shortage, but emerge stronger and more adaptable.
To that point, proactive finance leaders should look at the shortage as a call to action, where just a handful of quick, short-term changes can set up an organization for long-term success in this brave new world.
Rethink staffing models: Moving away from traditional models toward more dynamic, flexible staffing solutions can help address immediate needs and prepare for future changes.
- Invest in technology: Embracing automation and artificial intelligence streamlines operations and frees up existing staff to focus on more strategic tasks.
- Upskill teams: Continuous learning and development are essential. Upskilling teams to handle new technologies and complex financial strategies can enhance both efficiency and efficacy in financial roles.
With fewer seasoned professionals available, less experienced staff now find themselves in roles that traditionally require years of nuanced expertise. This scenario not only impacts decision-making but also heightens risks associated with financial controls and compliance, particularly in sectors where regulatory demands are especially stringent.
Like it or not, failing to take action could very well undermine your organization's financial health and agility. And the risks increase with every unfilled position, both in day-to-day operations as well as strategic decision-making and long-term planning. In other words, the time to take action is now.
