Accounting thought leader Seth Fineberg shares the three areas that public accounting needs to address to make the profession more attractive to young talent: life-work balance, DEI and salaries.
Transcription:
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Dan Hoood (00:03):
Welcome to On Air With Accounting. Today I'm editor in Chief Dan Hood. Over the past quarter century, the accounting profession share of the young workforce has declined fairly precipitously to the point where we faced some major capacity issues. The question is what will it take to boost the profession's ability to attract the next generation of accountants and the next generation and the next generation and so on. Here to help us explore those questions and more is Seth Fineberg. He's a well-known journalist, consultant and thought leader in the accounting profession. He's the founder of Accountants Ford and before that he was a former editorial chief at Accounting Web and before that, a technology editor Accounting today. Seth, thanks for joining us.
Seth Fineberg (00:35):
Thanks for having me, Dan. Always pleasure.
Dan Hoood (00:38):
I should also mention that Seth is going to be joining us at accounting today's firm growth forum. He's a featured speaker there. We're very excited to have him there. He is going to be talking out a bunch of different issues, some of the ones we're going to be talking out today, but some others as well, just major trends in the profession. So we're looking forward to that. We hope you'll join us and him in San Diego. May 21st and 22nd, but for now, you've got 'em here in your ears. And we're going to be talking about this huge issue for the profession, which is right. How does it get back to the point where it can attract and retain enough young accountants to perpetuate itself? Maybe we can start with outlining what the problem is. Why do you think it is that the profession is having such a hard time drawing in and keeping young talent?
Seth Fineberg (01:20):
It's a great question, Dan, and it's something that I had thought through long and hard about myself. So at the beginning of the year, I kind of mapped out as we wrote it all out and formed some thoughts around it and I continued to talk about it. But the top three in my mind of why the profession is, I don't want to say in decline, but we're not really attracting new talent as much, and even some folks just deciding to kind of step out, do other things are life work balance, and it's very purposeful that I put life first because I think that is what really needs to matter. Secondly, the lack of diversity and inclusion. This is the world we live in today. We just really don't have that. At least there's not the impression. There's not a lot of real empirical evidence that this is happening in the accounting profession. And number three is just starting and even mid-level pay. Now, while some firms I realize are addressing this by and large profession wide, it just isn't. And I have some numbers to back that up as well.
Dan Hoood (02:38):
Excellent. I mean that's a pretty widespread set of issues to dive into, but I want to explore each of them in some detail because dealing with each of them will require very different sets of initiatives and reforms and rethinking. I do want to just quick to your point, and you were right to say the profession's in decline, we shouldn't make it sound like things are on fire and everything's going to burn down. It's not attracting as many people as it needs, but it's still attracting people. It's not like everyone said accounting, no, no more, no thanks ever. It's just the numbers are smaller and that's the problem. It's not matching the growth in demand, right? There's a huge demand for accounting talent and the supply of it is much smaller than the demand,
Seth Fineberg (03:19):
And the work is still there. Work still needs done.
Dan Hoood (03:22):
People still want and love accountants. We just can't produce enough of them fast enough. So it's a production issue. Maybe we could make Androids or something. We'll talk about that. That's a long-term solution for now. I want to dive into year three pillars or elements of the problem. Let's start with life work balance as you put it. I think as you said, people have been thinking about it as work-life balance for a long, long time, and they've been working on work-life balance for a long time. If you talk to most firms, they'll say they've been working on it and we've seen evidence of that, but it's still not solved or it's still not, there's still a reputation of the profession as being long grueling hours and a lot of time at the office and not a lot of time with your family. So how is life work balance different from the sort of work-life balance things people have been talking about for years and what does it look like in practice?
Seth Fineberg (04:10):
In practice? I think it really got put under a spotlight after the pandemic, even during it for years, firms were like, oh no, we just can't see going fully remote. We can't see hybrid work. And all of a sudden you had to just as years ago when I was tech editor, I remember when the coming of cloud was a thing and it was just, oh, we just can't do that. We can't, our tax team now they need to be on our system. And all of a sudden you had to figure it out. Well, sometimes that's what it takes to get the profession or any profession as a whole, but definitely the profession that we know so intimately well for as long as we've been covering it to move and change just doesn't happen in a bubble. And this big idea of change really is hard to think about in these big lty terms.
(05:07):
So you definitely see it with a lot of the survey work that you do and a lot of your connection to particularly the CPA firms as well. You definitely see some of the efforts going on, but we're talking about a profession that people go to work as accountants, we're looking at about 1.2, 1.3 million odd individuals who are enrolled agents who are bookkeepers, bookkeeping professionals, accounting professionals. They have accounting degrees as well as CPAs at all levels. And there just doesn't seem to be, while we can throw spotlights on different firms doing different things, there's not a collective conscious that this needs to matter and we need to actually make things happen. So when we're talking about life work balance, Dan, it is putting that first allowing people who really may need to or prefer to be remote to do that, their parents, their taking care of a family member, whatever it is, life is first in those scenarios, things come up. You need extra vacation time, you need some extra time off. You just want to be seen as a person and not someone who's just producing the work, especially if the work is getting done. We have a lot of technology today to keep track of that, of work getting done no matter where you are. And so that kind of culture needs to change the fact that you need to even as particularly some of these younger accountants too, and this is what we're talking about, the impression is that, well, you got to pay your dues kid.
(06:59):
You're somehow expected still at firms to log. There's still this idea of partner hours. You got to log a certain amount of time or book certain amount of client time, not only just at certain parts of the year, but throughout the year to see your compensation level impacted. And that's what I'm talking about. That needs to change profession wide, whether you're a CPA, enrolled agent, bookkeeper, whatever it is. And as we know, by and large, you're probably at a smaller firm or smaller operation out there, but you're still no less impactful with keeping compliance and doing all the work. You need to feel like, yeah, I enjoy this. I can do this, and I enjoyed it, and accountants help. Right? That's why you got into it to begin with. Yeah,
Dan Hoood (07:49):
No, well, that's the thing, right? There's a willingness there, a certain degree to which the overwork is self-inflicted, right? That you keep saying yes to people and keep saying, yeah, I know what I need to do to help you, and then you do it. That's kind of a little bit your fault, but I think you hit on a great point there, which is it's not about the hours put in, it's about the results. It is the work getting done. And this is a big problem for accounting firms in a bunch of different areas, in part because they've been thinking about
Seth Fineberg (08:15):
How we measuring,
Dan Hoood (08:16):
Yeah, they've been thinking about hourly billing and the hourly increments for so long, and now we're at a point where in a bunch of different areas, not just in terms of life work balance and employee satisfaction and happiness, but in terms of billing and how you bill things, how you charge your clients and how your clients feel about what you do that move away from time spent is the measure of value or is the measure of the employees in this case, of the employee's value to the firm, when really it should be just the work getting done. And that's a big problem with the remote work that so many people kind of enjoyed during the pandemic and said, well, I'd love to be able to do this regularly, was that a lot of managers had no idea how to measure productivity. We heard a lot about firms saying, oh no, people are much less productive. They did much less work. Then you sort of said, well, did they or did you just not see them doing the work? And so you assumed they weren't working
Seth Fineberg (09:05):
And the numbers, the numbers tell another story. The numbers actually show, oh, well, yeah, actually you could even look outside the progression. Bigger companies that have tens of thousands of employees and they're measuring, looking at production numbers, sales numbers, things like that. They found that by and large that yeah, it actually was not impacted that
Dan Hoood (09:29):
Any other, I mean, we could spend a long time on this, but are there any other, as we remote work, this could be an hour long discussion on its own. We could literally talk about this for the next three years until the problem is solved. And maybe that might be the thing if we just said, we're not going to stop talking about it until you fix it, then now we get people to fix it. The
Seth Fineberg (09:46):
Filibuster, your approach. I love
Dan Hoood (09:48):
It. Just exactly, exactly. I yield to the senator from sny Town. Yeah, but that's the thing is right, we could talk about it for a long time, but are there, just before we jump off it, obviously remote work and letting people work where they want, when they want and that sort of thing, and that respect for the individual and the fact that there are people first there, parents and so on before they,
Seth Fineberg (10:12):
Caregivers, what have you.
Dan Hoood (10:14):
Yeah. Are there any specific examples you can think of where firms should be thinking differently about life work balance?
Seth Fineberg (10:22):
Yeah, I think we really kind of were dancing around it, but you hit on it when you said, looking at the individual, looking at the person first. You chose this firm, you chose this career. If they're showing that you're committed to this firm and they're committed to your clients and the client base is growing and they, they're satisfied and the work is getting done and on time and all the things that, whatever KPIs you have in place outside of the amount of hours you spent doing something, that putting the individual first, bring the person first and having them feel like they matter. And I know that there's things like it's financial compensation, sure, time off, hey, the summer, Fridays and any little things, firm outings, getting out in the community, all kinds of things to make people feel like this is not just a job. I'm really a part of something. And again, like I mentioned, being an accountant and getting into accounting is at its core, you do it sure for money and the upside potential is pretty large these days, particularly when you start talking about advisory work and all these things. But feeling like you can take a break, you can be sick, you can just, life happens and it's okay for life to happen to you because it does.
Dan Hoood (11:58):
Alright, we got two more major pillars to get to talk to. We talking about DEI and about salaries and both of those are tricky in their own ways. So we're going to talk about those. But before we do that, we got to take a quick break and we'll be back shortly.
(12:19):
And we're back and we're talking with Seth Feinberg, consultant, raconteur editor at large, accountant expert, a long time observer and thinker about the field. And I should mention again, he can't mention it enough, going to be a featured speaker and keynote panelist at our firm growth forum in San Diego in beautiful San Diego. Can't wait. Bay Resort. Yeah, it's very exciting. I'm looking forward to it. It's our second year doing it and second year for Seth coming to it and sharing all his insights with us there. So we're looking forward to that May 21st and 22nd San Diego. I'll end the pitches now, except to say you should come listen to Seth because he's going to share even more insights. But for now, I want to dive back into the two other pillars. We talked about the need for life, work balance, the reformulated, forget work-life balance, it's life work balance. And firms need to embrace that even more than they already have. I think a lot of firms say, oh, I do so much, but there's more to do. And there's some of it's more mindset. Are you really? Yeah. Some of it's more mindset, some of it's more how you think about the person as opposed to, yes, you have a dress for your day policy, that's great, but how do people feel? They feel like when they come to work there themselves and so on.
(13:34):
Opening up that canned worms again already we said we didn't have enough time to talk about. It's
Seth Fineberg (13:37):
A big one. It's a big one,
Dan Hoood (13:39):
But we're going to put it to the side now because there's two other big ones we want to talk about. And the first is diversity, equity, and inclusion. Firms have been working on DEI firms and the profession as a whole have been working on DEI for years with we've talked about work-life balance or life work balance. They've made some progress there, but not as much as we would like DEI. They made even less progress. So let's add brass acks. How important is DEI to sort of making the profession attractive, more attractive or as attractive as it needs to be? Put that way to younger accountants? How important is it to that and what confirms do or individual accountants do to move the needle here?
Seth Fineberg (14:12):
Yeah, no, it's a good one. And again, this isn't something that is none of these other things that are going to get solved tomorrow, but the commitment to them is what matters. And not just the commitment, but it needs to also, from a PR perspective, from an optics perspective, it needs to actually be seen. So when we're talking about people coming into the profession, this is something that matters to them that they feel like I'm part of a profession that is not all one gender, one color, one frame of mind. And in our time, Dan, we've seen it, where is it still predominantly white and male? Absolutely. But in the time even that you and I have been called bring the profession, I remember when I came in 22 odd years ago, one of the big issues, particularly at the, you can look top 100 firms, top 500 firms, top CPA firms in the country. There was maybe 2% were female led at the time. That's changed. You probably have the numbers on it by how much, but I know it has been notable in that 20 odd years. The same 2% right now are people of color, CPAs of color, barely, I don't want to say shocking maybe with kind of tongue in cheek, but it's not right. Well,
Dan Hoood (15:54):
That's saying sadly it isn't. Shocking, right? We've been seeing this every year. We haven't been making much progress, but it's
Seth Fineberg (15:58):
Not the world we live in. There are plenty of professionals, CPAs, otherwise of color, human beings, professionals who run firms who are doing the work. But yet we just do not see them so much in leadership roles. And how do you get there? You have to really put forth efforts, and I'm going to say something that's probably kind of controversial, but it is what it is. I think a lot of the de and I efforts at the firm level have been somewhat performative. I think a lot of it, not all of it, but a lot of it that we see is kind of check the box and say, Hey, look what I'm doing. We're doing it. We're good. Some were even kind of taking some steps back from what I'm hearing.
Dan Hoood (16:53):
Yes. We actually, we had Crystal Cook from their director of diversity at the A-I-C-P-A on podcast just a week or so ago. And she said, it's not as bad as we think that that retreat from DEI, but it is there. It's not non-existent, but it's not as bad as we think it is fortunately. But it's definitely something to worry about.
Seth Fineberg (17:14):
It is. And much like with life work balance, diversity and inclusion being a priority to hiring, to growing, to educating, to just really keeping staff. It's the world that we live in and people, if you want it to be an attractive place to come and work, I think this profession of, I might be a little biased, but this profession of any other professional groups really has a great opportunity to not only embrace it, but really show that it can be inclusive and a safe and wonderful place to work.
Dan Hoood (18:04):
And it's worth, I mean, I think it's worth grow your career. And I started think of this, every time I talk about di, it is worth saying this is not about being woke. This isn't about any kind of emotional or social or political point of view. There are not enough accountants. There's not enough accountants to do all the work that's available for accountants to do. If you can't give the short version, go find accountants. And there's huge pools of untapped talent in all kinds of underrepresented groups, and that's the place to go, right? Aren't making more old white accounts, so old white male accountants that just aren't enough of them. So we need to find other places to find them and to do
Seth Fineberg (18:48):
That. Yeah, we've been watching them age, literally age out for the last, I would say decade,
Dan Hoood (18:54):
Right? And this is not a slap at old white accountants. They do great work, old white male accountants, I should say. They do great work and that it's fantastic, but there's not enough of them and we need more. And that's as good a reason as any to go out and do the things and the things you have to do to demonstrate your commitment to DER are the things you need to do to attract those untapped pools of talent.
Seth Fineberg (19:18):
Exactly. I mean, why not be reflective as a profession, as an entire entity, professional entity, be reflective of the world that we live in. B, just the old adage be the change that we want to see. And it starts from somebody that we both know years ago had said this was in relation to technology adoption at the time, but the tone gets set from the top. So firm leadership of all sizes need to be committed to that life work balance, inclusion on the whole from the clients that you work with to the staff that you have all the way on up through partner and just being a professional. And to your point, practically speaking, just the nuts and bolts of it is there is account Jordan, full stop. There is. We can go into the numbers left and how do you attract and be an attractive place to come and work. So yeah, it is a PR issue and I think more efforts need to be done all going all the way really to the high school level. I know the A CPA years ago had these efforts about financial planning going all the way, remember Feed the pig. That was the whole financial planning banks going all the way to really almost the grade school level, junior high school level. It's definitely something I'm teaching my kids too. But yeah, they want to be in careers that reflect the world around them.
Dan Hoood (20:59):
As long as it doesn't involve Benjamin Banks who while in theory, theory was a great idea, just the actual makeup for him was disturbing
Seth Fineberg (21:08):
Was it was. But the idea of
Dan Hoood (21:10):
Financial. But the idea was great. The idea the campaign was brilliant, was great idea, but the makeup of that guy,
Seth Fineberg (21:17):
Yeah, little creepy, creepy.
Dan Hoood (21:18):
But anyways, but still great model. The A CPA and lots of other organizations and firms are making an effort reaching out at the high school level, but there needs to be more just you got to catch people
Seth Fineberg (21:31):
And to listen too. Listen to what are the kids coming in? Maybe there needs to be more of that. Like, Hey, why wouldn't you want a career in accounting?
Dan Hoood (21:42):
What about what we're selling isn't appealing to you? And that's the thing that goes for life. Work conscious.
Seth Fineberg (21:47):
Yeah, conscious approach. How am I doing? Yeah, am
Dan Hoood (21:49):
Doing, how am I doing? How am I doing? You can tell that both of us are from New York, particularly from New York in the seventies. That's true. And it's worth a point worth bringing back to the whole life work balance, right? Is that listening is crucial there, right? Listening to what people want from you as opposed to saying have to, this is what I got out of the profession. So you must want that too. That ability to go back and say,
Seth Fineberg (22:12):
This is what works and this is what's always worked, right, but not be the best, but this works,
Dan Hoood (22:17):
Right? As opposed to going and saying, what do you want? What would make you want to work here? Exactly. What would make you want to stay here? Speaking of what would make you want to work here and what would make you want to stay here? We're going to switch to, and this is what's interesting about the three areas you've landed on or you have identified as crucial, is that they're very different's. They're high level profession level changes that are needed for some things and firm level changes needed for some things. And then a very specific is how much money are you putting in their pockets and salaries? This is a big
Seth Fineberg (22:48):
Deal. It's all tied to the core issue of there aren't enough accountants to work and it continues to decline. And what do we do to really attract the next generation and also the current generation, the current workforce of accountants keep coming here.
Dan Hoood (23:07):
Right. Well, this is an issue I think for a lot of firms will say, A lot of people in the profession say the accounting profession is very lucrative and it is. But one of the issues seems to be that the really high money, the real big money is at the end of your career. It's when you become a partner, it's when you become benefit partner. So what firms need to do to handle this. I was thinking about there are a large number of, particularly among the top hundred firms and the top 500 firms that over the course of the great resignation a year or so ago, whenever that was raised salaries, and in some cases we heard some firms that had raised their salaries twice in a year or had at least had salary reviews twice in a year during that year because they were so worried about losing staff.
(23:54):
So they're capable of taking it very seriously. But still to this day, salaries, entry level salaries as an example, are something like 10 grand lower than they are for CPA type degrees or something like 10 grand are paying 10 grand less than like an MBA or a general business degree. And then if you look at technology and finance, those are all out paying the accounting profession. How do we get the profession to change, to pull some of that value forward from your second decade or third decade into the profession to give people, to make it attractive to enter?
Seth Fineberg (24:29):
Well, I think you kind of hit it on the head, Dan. I think, yeah, firms are making money. This is a lucrative career, but how much time do you have to put in to get there? And today's folks who are coming in, they want to know that they can jump in and build on that right away and not have to work the hours and not have to be treated like secondary, tertiary on down the line. Just to grunt, I'm going to throw some numbers at you that I got particularly from, there's a couple of groups from Indeed and also from Robert, half associate audit and assurance services, average pay starting pay between 48 and 52,000, starting tax associate between 52 and 58,000 senior associate audit assurance services, 57 to 62,000, senior tax associate, 67 to 75,000.
(25:46):
Now, to me, I just don't know that those numbers are really going to sound very attractive. There's someone coming in who's already put in the time, particularly, particularly if you're on a CPA path, but even outside of, say you don't get your cpa, maybe you come at ed, maybe you just get your accounting degree and want to come and do bookkeeping work and you want to do business advisory work and all of that, or maybe you're kind of starting with tax and you want to build up from that. It has to feel like you got to meet people where they're at. I'm not saying you need to accept these lofty numbers, but if you're doing that well as a firm, you should be able to pay your people out of the gate and really, really embrace that or create a better, maybe even a better path that isn't eight to 10 years,
Dan Hoood (26:43):
Right? Maybe a clearer path of, hey, two years you can get a bump, three years you can get a bump.
Seth Fineberg (26:47):
Exactly. Just something. But yeah, definitely starting Sally's two not so great either. And then some of the work, we can kind of pick it apart. We can look at some of the work itself and all of that, but by and large, that has to change. And because it is a lucrative career, even in the worst of times, counting professionals are needed down economies, boom, economies doesn't matter. You are really, they say small business is the backbone of the economy. Guess who's supporting that backbone, the accounting professional. You're there keeping compliant. You're there keeping the books where they should be, and hopefully you're involved with the overall direction, the financial and business direction of that business. You are keeping them afloat. And I know the last several years, a lot of you were kind of in triage, you were emergency room doctors, you were putting businesses on live support, keeping 'em alive and all of that. So bravo to you. You should be getting paid for it,
Dan Hoood (28:04):
Right? Well, listen, as you say, if I'm doing all this, if I'm the backbone of the American economy, why is my entry level salary 10 grand less than that essential of a banker or a tech person, right? I mean, those numbers you said those are all high forties, low fifties for entry level people. For general business degree, it's low sixties is your entry level. So I mean, I think you've clearly laid out the value of the accounting profession to the rest of the economy. The question is what's the value of an employee to the accounting profession?
Seth Fineberg (28:36):
Exactly. Exactly. And that needs to be another point on the how do we attract and retain path.
Dan Hoood (28:49):
Excellent.
Seth Fineberg (28:49):
And we could go on into other sub areas
Dan Hoood (28:52):
As we could go on for a long, long time. Unfortunately, we're running up against the limit of people's patients. No, we're really more, we're literally running out of tape to record this. No, I'm kidding. But we are running up against time, fortunately, as I mentioned, we're going to have Southwest with us at the firm growth form in San Diego in May to talk about these and a million other important issues. We hope you'll join us there to talk about all the different ways we can move accounting firms forward, not just in terms of recruiting and retention, but in a bunch of other areas we'll hope to see there. You can find registration for that on accounting today.com. But in the meantime, Seth, thank you so much for joining us. A lot of great thoughts and a lot of great ways to think about this issue. I think those, the three pillars you've laid out are strong focuses. One's the people ought. It's a good way of framing the issue and breaking it down so that it can be solved. So thank you for that.
Seth Fineberg (29:42):
Thank you. And my final thoughts are that I am hopeful that these are things that if taken under advisement and taken seriously, will really see this profession grow and do the great things that it can.
Dan Hoood (30:02):
Excellent. A great takeaway and a great way to end. So again, thank you Seth, and thank you all for listening. This episode of On the Air was produced by Accounting Today with audio production by Kelly Maloney. Great to review us on your favorite podcast platform and see the rest of our content on accounting today.com. Thanks again to our guest, and thank you for listening.