The accounting industry is currently facing a significant talent shortage that could reshape the landscape of financial expertise. The shortage of talent is a multifaceted issue influenced by a range of factors that may be deterring the next generation of potential professionals from entering the field.
As the accounting industry confronts its issue of the talent shortage, understanding the root causes is crucial to hopefully finding a solution. These factors include:
There are two converging trends among the generations: the retirement of older generations and a disinterest in enrolling in accounting degree programs among younger generations.
The older generation has been a cornerstone of the accounting workforce for decades. As this segment retires, a considerable gap is emerging in the professional market. Yet many accountants are delaying retirement even further as the need for experienced professionals continues to rise.
For the younger generation, the numbers speak for themselves. The American Institute of Certified Public Accountants (AICPA) 2023 trends report indicates a noticeable downturn in the pipeline of new accounting talent.
Specifically, students earning bachelor’s degrees in accounting during the 2021-22 school year decreased 7.8% from the previous year. The number of students who received a master’s degree in accounting decreased by 6.4%.1
These stats closely correlate to the reduction of candidates sitting for the CPA exam. The number of unique CPA exam candidates fell from 72,271 in 2021 to 67,336 in 2022.1
This decline signals a reduction in fresh talent and raises concerns about the future availability of qualified professionals to assume roles that retirees are vacating.
One of the barriers contributing to this decline is the 150-hour educational requirement for CPA licensure. The requirement was initially adopted by Florida in 1983, for the AICPA to then later recommend it to all states.2
While intended to ensure a high level of skill and knowledge in the profession, this requirement significantly burdens accounting students, extending their education and associated costs. It has sparked debate about whether the additional time and financial investment yield a proportionate return.
“The 150-hour requirement and its benefits will likely continue to be debated and possibly even change in the future.”
“The 150-hour requirement and its benefits will likely continue to be debated and possibly even change in the future,” said Jeff Binford, Principal of Accounting and Finance at Clearview Group. “Especially as we see prospective accountants opt for alternative careers with less stringent entry requirements.”
The "Great Resignation" has highlighted a shift in work values, with employees prioritizing flexibility, work-life balance, and job satisfaction over traditional workplace expectations. In addition, companies are battling the “gig economy,” where many professionals opt for non-traditional income streams and may prefer part-time or contractual work.
Accounting teams find themselves in this same competitive environment for talent, often struggling to offer the benefits and culture that attract younger generations.
Accounting roles experience busy seasons, with heavier workloads during tax season and end-of-year closing. This culture makes it challenging to sell the profession as a "dream job" for those entering the job market when the perception is one that may offer financial stability but at the cost of personal well-being, especially during those busy seasons.
Ultimately, in a talent shortage, culture wins. Healthy, fulfilled, well-balanced individuals are more focused, produce higher quality work, and have far more dedication to their jobs.
The talent shortage in accounting is not just a statistical concern – it has tangible impacts on accounting teams and the broader business ecosystem.
Accounting teams are on the frontline of the talent challenge. They’re having trouble filling positions, especially those requiring a high level of expertise and experience.
The shortage means that teams are short-staffed and often forced to do more with less, which can lead to overworked employees and decreased employee satisfaction. The ripple effect includes a potential decline in quality of output, increased errors, and a strain on working relationships.
If the trend continues, the long-term effects could be more severe. The accounting profession might see a significant knowledge gap as experienced accountants retire without a new generation to take their place.
This could lead to a loss of institutional knowledge that is vital for training new staff and maintaining the quality of the profession.
Beyond accounting teams, the talent shortage impacts all sectors that rely on financial expertise. Efficient and accurate financial reporting is the foundation of sound business decision-making and investor confidence.
A lack of accounting professionals can lead to delayed financial statements, compliance issues, and, ultimately, a potential loss of stakeholder confidence.
The economic implications are far-reaching. If businesses can't rely on timely and accurate financial information, investment decisions may be affected, slowing economic growth. Additionally, the strain on existing accountants will continue to increase the risk of burnout and turnover, exacerbating the shortage.
Interim staffing is an employment arrangement designed to fill short-, mid-, or even long-term needs for specialized skills.
Unlike traditional hiring processes, interim staffing allows companies to temporarily engage qualified professionals. This flexibility is particularly beneficial in departments like accounting and finance, where workloads can vary significantly throughout the fiscal year and where expertise in niche areas is often required on a project basis.
Interim staffing can be a strategic asset for organizations navigating the current talent shortage in accounting. Here are just some of the benefits that interim staffing offers:
Interim staffing allows organizations to respond quickly to workload demands without the commitment of a permanent hire. This flexibility allows for better management of staffing budgets and reduces the pressure and costs associated with recruiting full-time employees.
“With the flexibility interim staffing provides, organizations can adjust and assess their workforce based on current needs.”
“With the flexibility interim staffing provides, organizations can adjust and assess their workforce based on current needs,” said Binford. “Then when the needs are met, or budgets change, the organization can transition the role to possibly a full-time hire.” Often times team structures are set based upon who is available instead of how we should build our team, thus it is crucial to evaluate the strategic direction of your company coupled with the short and long term needs.
Workload fluctuations are a reality in accounting, and managing these effectively is crucial to maintaining service quality and employee morale.
Interim staff can alleviate the burden on permanent staff during peak periods and special projects or implementations, ensuring that work is completed efficiently and to a high standard. This can help prevent burnout among full-time staff, improve job satisfaction, and support retention.
One critical advantage of interim staffing is the immediate access to a pool of professionals with specialized skills. This access is invaluable when specific projects arise, or industry-specific knowledge is required to navigate complex financial landscapes.
Interim staffing addresses the work-life balance equation from both ends: accounting teams benefit from the relief provided during intensive work periods, while interim professionals enjoy the autonomy to shape their careers around their lives.
In-house accounting teams benefit significantly from the support of interim staff. The addition of skilled interim professionals can alleviate the heightened workload during peak seasons, like tax season and end-of-year closing, which are notorious for extended work hours.
With interim staff absorbing excess work, the core team can maintain a steadier pace, thus preserving work-life balance and reducing the risk of burnout.
Interim staffing positions are inherently flexible, which is a major draw for accounting professionals seeking control over their schedules and work commitments. Interim roles often allow for project-based work, enabling these professionals to select assignments that fit within their desired work-life framework and specific skills.
This flexibility can lead to higher job satisfaction, as interim staff can enjoy professional fulfillment without sacrificing personal time or well-being.
Overall, interim staffing offers a practical and efficient solution for organizations to address the immediate challenges of the accounting talent shortage. By incorporating interim professionals into their staffing strategy, organizations can maintain a dynamic and responsive approach to their changing needs, ensuring they continue delivering high-quality accounting services in an ever-evolving market.
With Clearview Group's Interim Staffing Services, you have a partner ready to supplement your staffing needs with top-tier accounting professionals. Contact us to discover how our interim professionals can help your company navigate the talent shortage confidently and ensure your business never misses a beat!
Get started right away by searching our interim staffing database.
1https://www.accountingtoday.com/news/number-of-accounting-grads-plummets-further
We are a full-service management consulting and CPA firm covering all aspects of audit, compliance, risk management, accounting, finance, tax, IT risk, and more. Just let us know what you need help with and an expert will be in touch!
Request Your Consultation
