The accounting expertise scarcity has reached a near-crisis stage, with all indications that the pattern will proceed for a while.
As turnover will increase and the pipeline shrinks, modern corporations are rethinking conventional staffing methods.
And that is reworking how small and midsized companies, in addition to CPA companies, guarantee they’ve the professionals to make data-driven selections and help development.
The accounting expertise disaster by the numbers
The information reveals a multifaceted drawback, particularly for corporations that lack the monetary assets or identify recognition to compete for the quick provide of certified, skilled accounting expertise.
- The accounting workforce shrank by 17% between 2020 and 2002, in response to The Wall Road Journal. Over 300,000 accountants and auditors vacated their positions in that interval.
- Turnover averaged 19% as of mid-2023, in response to an IPA Follow Administration Report — a stark distinction to historic ranges.
- Practically half of all accounting professionals depart their companies inside one to 3 years and 7 out of 10 keep one to 6 years, an Illinois CPA Society survey discovered.
- Nearly three-quarters of all CPAs reached retirement age in 2019, in response to the American Institute of CPAs, creating a large expertise drain.
The pipeline drawback: Why the outdated mannequin does not work
In the meantime fewer college students are selecting accounting as their subject of research. The variety of school college students graduating with an accounting diploma declined from 8,000 in 2017 to about 6,500 in 2022. And CPA examination candidates dropped by 17% the identical yr, in response to the AICPA.
Why the dip in incoming accountants? Realities like low pay, burnout and academic necessities are dampening curiosity.
The Wall Road Journal studies that median inflation-adjusted salaries for younger accountants have stagnated, whereas compensation in different industries has shot up. Sectors like know-how and consulting have the assets to lure high expertise with 20% to 30% increased common beginning salaries than accounting.
A demanding workload and the added pressures of tax and audit season additionally discourage new graduates from getting into the sector. A 2024 research by the Middle for Accounting Transformation and CPA Trendlines discovered that 68% of accounting professionals are experiencing burnout.
The reform motion: Unlocking new CPA pathways
The 150-hour instructional requirement to sit down for the CPA examination additionally poses a hurdle many college students aren’t prepared to clear. However a number of states are eliminating this barrier within the hopes of engaging extra younger accounting professionals.
Starting in January 2026, candidates in Ohio and Virginia can select from a number of pathways to CPA licensure, together with choices that mix a bachelor’s diploma with an accounting focus and a specified variety of years {of professional} work expertise. As of this writing, Utah and Texas had been contemplating related fashions, and Minnesota plans to reintroduce reform laws this yr after it didn’t cross in 2024.
Whereas these state-level reforms are encouraging, the jury continues to be out on whether or not decreasing instructional limitations to entry will make a significant, sustainable distinction. And up to now, there isn’t a nationwide consistency in CPA instructional necessities, which may create confusion or concern for college students who need the pliability to launch a multistate job search.
Modernizing accountant hiring, improvement and retention
Demand for accounting companies is projected to extend at a compound annual development charge of 1.7% over the following 5 years, per IBIS. Accounting companies that clear up the expertise conundrum shall be in prime place to capitalize on new enterprise alternatives, outperform the ever-expanding subject of rivals, and revel in regular, worthwhile development.
Likewise, small to midsized companies might want to deal with the rising hole in accounting expertise provide and demand. In any other case, they will wrestle to help development, appeal to buyers or make data-driven selections that preserve them a step forward of the competitors.
We’re already seeing forward-thinking companies adapt their hiring {and professional} improvement methods to draw and retain certified accountants. Options like the next are likely to high the listing:
- Incentive-laden packages. Compensation is an enormous driver within the determination, however modern corporations are considering extra creatively about the right way to present extra worth. Fairness choices could make an early-stage firm extra engaging to younger accountants, and sturdy advantages are a attract any atmosphere.
- Mentorship applications. A structured method to mentoring creates an atmosphere the place younger professionals really feel assured they’ll develop and develop … and usually tend to keep longer.
- Outlined profession paths. In a small or midsized enterprise, early-career accountants won’t see a transparent highway to development. Mapping out a path of progressively higher duties can ease considerations about stagnating and retain high expertise longer.
- Versatile work choices. Curiosity in distant and hybrid work environments stays robust post-COVID. With some corporations mandating a return to the workplace, these choices can differentiate employers and appeal to high candidates.
- Stronger engagement. Right now’s staff worth a tradition the place they really feel extra linked to the group and extra dedicated to its mission and imaginative and prescient. For nonprofits, the mission is an particularly robust draw that may cut back attrition.
Good accounting staffing fashions: It is not both/or
Each CPA companies and small to midsized companies are more and more mixing in-house accounting groups with outsourced professionals. Augmenting inside employees with outsourced expertise can show a long-term, viable, strategic staffing method that gives a aggressive benefit.
This hybrid method helps the group:
- Fill staffing gaps with out the excessive value, lead time and challenges of relying solely on FTE hiring and onboarding ;
- Achieve the specialised abilities and experience required for a selected engagement or mission, corresponding to SOX inside audit and inside management expertise, or experience in monetary modeling or FP&A;
- Faucet industry-specific accounting experience that may be robust to search out and preserve in-house — an enormous boon for companies that grapple with sector-specific rules and operational nuances;
- Ease the capability constraints that stop growth-minded companies from attaining their income targets;
- Sustain with demand throughout annual busy seasons or different peak intervals, with out investing in additional everlasting hires or overextending inside groups;
- Offload routine duties from inside accountants, releasing them to tackle higher-value work that improves job satisfaction;
- Keep a excessive stage of service high quality, regardless of how heavy the workload; and,
- Reply successfully to pressing wants and tight deadlines, with out burdening the interior workforce.
One other accounting staffing technique that is gaining traction is the creation of a digital captive middle. On this hybrid mannequin, an skilled third-party supplier units up a digital middle of accountants totally devoted to a single firm. Then they handle the employees, infrastructure and different assets on the group’s behalf. A digital captive middle is likely to be the suitable answer for a CPA agency or different enterprise that handles a big quantity of accounting work, however is struggling to recruit, retain and handle a large workforce.
Smaller enterprises are additionally utilizing methods like inside job sharing, part-time roles and shared expertise swimming pools to keep away from the challenges of making an attempt to compete in opposition to organizations with deep pockets for a similar restricted candidates.
The know-how push: How AI and automation ease expertise constraints
Together with evolving their staffing mannequin, many companies want to know-how to assist clear up the accounting expertise crunch. They’re investing in AI-powered instruments and different types of automation — to not exchange their employees accountants, however to assist them function extra effectively.
By offering accounting professionals with the instruments and coaching to work smarter, companies are releasing them from mundane work to allow them to deal with strategic pursuits. The extra streamlined their processes, the extra manageable their workload. And as accounting roles turn out to be vacant, the group has the pliability to leverage AI and different know-how to fill the void — opening many extra potentialities than merely posting a place for rent.
Typically, an off-the-shelf software program bundle or available AI-powered device will fill the necessity. Different instances, the enterprise would possibly want a personalized answer. Partnering with a supplier that is skilled in selecting and implementing accounting know-how may also help the enterprise apply the suitable innovation, sooner and with confidence. An outsourced associate additionally has the assets to maintain up with quickly advancing AI and different applied sciences, and may leverage that experience to coach inside accountants the right way to use it successfully.
Profitable the lengthy sport
The accounting expertise shortage drawback is not more likely to reverse any time quickly, and it’ll take years to construct again up the pipeline. Within the meantime, a multipronged, adaptable staffing technique is probably going the very best plan of action for CPA companies and small to midsized companies. By pairing modern staffing fashions with using AI and different efficiency-boosting know-how, these organizations can fill expertise gaps, meet demand, and keep aggressive over the lengthy haul.
