The Kansas City accounting world—along with the nation—is facing significant staffing challenges today, with a dearth of qualified accountants even as well-paying job opportunities grow.
With tax season upon us, staffing challenges faced by the accounting industry are even more apparent, says Allison Mott, a certified public accountant and owner of her own Kansas City accounting firm, AM CPA. Mott thinks the accounting world appears dry and uninteresting to the younger workforce and argues that this perception needs to change. Read what Mott has to say.
By The Numbers
The accounting industry is facing significant challenges today, with a nationwide accountant shortage even as well-paying job opportunities grow. But these challenges may deepen in the coming years unless the industry comes to terms with what is really going on. In my position as an accountant and accounting firm owner, I see that there’s a lot to come to grips with in the industry—and a lot to fix.
According to a recent article in the Wall Street Journal, more than 300,000 U.S. accountants and auditors have left their jobs in the past two years, which represents a 17 percent decline. And although the Bureau of Labor Statistics reports that the number of available jobs in the industry has stayed relatively steady, increasing 4 percent from 2022 to 2023, and the average annual salary of $79,880 seems reasonable, there is still a sense that not enough people are willing or available to fill those openings.
There are fewer students selecting accounting as their major. The number of students earning U.S. postsecondary accounting degrees fell sharply in the 2021-22 academic year, according to a biennial American Institute of Certified Public Accountants report on trends related to accounting graduation rates, the CPA exam and hiring demand by accounting firms.
Some 47,067 students earned a bachelor’s degree in accounting in the 2021-22 school year, down 7.8 percent from the previous year, according to AICPA’s report.
This shortage is having a dramatic impact on businesses of all shapes and sizes. Accounting firms in particular are having to get creative with the ways they source their talent. This includes outsourcing to other countries and training other majors (such as business majors) to do the work of accountants.
In fact, outsourcing accounting practices ranks right up there with IT as one of the more commonly outsourced business practices, according to TOA Global, an accountant staffing service. Accounting outsourcing countries include the Philippines, India, Vietnam, Brazil and Mexico.
This accountant shortage is heavily impacting the public accounting industry and smaller firms in particular. Larger firms are still struggling to hire but have the discretionary funds to employ full-time recruiters. Smaller firms have to rely on other methods of recruitment. Some have resorted to selling their smaller firms to larger firms that are unable to maintain a work force.
Most public company hiring managers for finance and accounting positions say their organizations have faced talent retention challenges in the last 12 months (82.4 percent) and expect to experience recruiting difficulties in the year ahead (82.3 percent), according to a recent Deloitte poll. Nearly as many private company hiring managers also report challenges with finance and accounting talent retention (68.9 percent) and attraction (73.7 percent).
Adding to this situation is the fact that a large number of accountants are nearing retirement age. According to The Tax Adviser, a monthly publication of the AICPA, almost 75 percent of the CPA workforce reached retirement age in 2020. The number of baby boomers in the profession who are retiring is certainly set to increase in the next few years as a result of changing staffing models and rapidly changing technology and tax legislation.
Another issue facing the accounting world is the nature of tax season itself. Tax season is a 10-week period from the beginning of February until the middle of April in which the entire nation attempts to file their tax return. This puts additional stress on the already very limited resources of the accounting industry.
The long hours and stress tend to burn out accountants, especially during tax season, and many in the industry leave in search of a better work-life balance. In fact, according to a study by Caba, a resource support organization for the accounting industry, 55 percent of accountants admitted that they were suffering from stress and burnout, compared with 41 percent of employees in other industries, and 79 percent of accountants believe that stress and poor mental health are a problem within the industry.
These and other issues in the profession need to be addressed from the ground up. I think that the accounting industry needs a facelift—and fast.
Accounting is seen by students as stale and outdated when in fact there is a wave of New Age accountants taking up market share. The next generation needs to be able to see these opportunities and envision a future in accounting. Firms need to update their expectations of staff and create an industry that will attract young professionals while at the same time keeping them engaged.
When it comes to tax season, firms need to get innovative on how filing extensions are handled and how preparers can handle their work-life balance during this season of high demand.
If the general public is hoping to find a trusted tax preparer season after season, they will need to ensure their preparer can keep their doors open and remain profitable. Treating tax professionals with patience, grace and respect during tax season is a great way to demonstrate empathy for accountants as they work on the detailed information they need from their clients.
The changes to improve the accounting industry really need to come from all parties involved to ensure that the industry does not miss a beat going forward. It takes a village to raise a family, and it takes an even bigger village to help resolve issues within an industry.
