This year, in particular, there has been buzz about a nationwide shortage of accountants. Unfortunately, the rumors are true. According to Business Insider, the American Institute of Certified Public Accountants shared that fewer people are graduating with accounting degrees, and the number of people taking and passing the CPA exam is dropping. Additionally, Deloitte found that 82% of hiring managers for accounting and finance positions at public companies and 69% of hiring managers at private companies said that retention is a challenge. There is clear evidence of this shortage, but what can companies do to combat it?
The Shortage, Explained:
It is important to understand why accounting is experiencing this issue. 75% of CPAs reached retirement age in 2020, but the problem dates back further than that. In recent years, accounting programs have seen a decline between 20%-40%. Also, starting salaries tend to be lower for accountants than in other financial careers, and although CPAs typically earn more, obtaining the license requires 150 hours of education and passing the final exam.
Proper accounting does not waver in its importance. From small-scale, day-to-day accounting activities to accurate reporting that can affect a company’s stock price, accountants keep companies in line. These referees of the business world are diminishing in number but not in need. The impact of this shortage has increased the risk of audit, depleted productivity, and created chaos throughout other business areas.
What is being done?
Companies have begun to address the shortage in impactful ways by identifying what is meaningful to accountants; implementing these strategies in 2024 can make a big difference:
- Flexible office structure: Due to technological advances and shifts after the pandemic, accountants often only need to be in the office part-time. Even some Big 4 companies have initiated a “work anywhere policy” or adopted a modified office schedule. Work-life balance is tricky in accounting, where long days are standard. Allowing employees to work from home, even if not full-time, improves balance.
- Investment in technology: Accountants appreciate and thrive in efficient environments. Streamlined workflow can improve productivity, therefore adding value to their work experience. The accounting and finance world is known for long hours, especially during year-end-close, where employees may log 70+ hours a week. Investing in technology is especially important during long hours periods of the year.
- Higher value work: Some accounting areas are repetitive and, although important, can begin to feel like busy work. Adding higher-value work, such as interpretation, compliance, analysis, and problem-solving to accountants’ work breaks up the less exciting work, leading to greater motivation and higher work satisfaction.
- Continuous education: Some areas of accounting are rocksteady; however, today’s accountants constantly adapt and expand their skills to keep up with rapidly changing businesses and the diverse needs of industries. Companies that provide continuous education create a win-win. The company will benefit from employees who are up to date on regulations and have industry-specific knowledge, and employees benefit by increasing their value and having the autonomy to choose meaningful areas to specialize in.
The 2024 accounting talent shortage, evidenced by declining graduates and CPA exam takers, stems from retiring CPAs and waning interest. This scarcity poses risks, impacting financial accuracy and business stability. Companies can respond with flexible work setups, tech investments, enriched roles, and ongoing education to attract and retain talent to ensure a resilient future for the accounting field.