The Accounting Talent Shortage - Experienced Hires
In recent months, the United States has been facing an unprecedented talent shortage across many job markets. The causes of these shortages have been present for many years but reached a boiling point because of the effects of COVID and the related changes in economic and company policies. Professional accountants and CPAs are no exception to these talent shortages, and the provision has been feeling a strain on both entry-level staff as well as experienced workers. Today, we are going to talk about some of the causes of Talent shortages that affect experienced professionals in the industry.
Shortages of accounting graduates in recent years have had a pipeline effect on experienced hires. With fewer graduates pursuing positions where accounting is the primary function in recent years, there has been less of a pipeline to create the experienced candidates that are needed today. I listed some reasons for this shortage in a different blog.
CPAs are set to retire at a far faster rate than they can be replaced. According to a recent study done by the AICPA, over 75% of CPAs will retire in the next 15 years. This means that even if there wasn't a shortage of accountants already in the profession, it would still be hard to replace the boomers because there would not be enough people with comparable experience to replace them.
In addition to intermittent shortages being caused by a lack of bodies in general, there are also shortages due to a mismatch in the supply and demand of talent. One example of this is the previous point, someone who just graduated cannot hope to fill the spot of someone who just retired. Additionally, there are many different roles in accounting where the employer will require a certain skill set (such as auditing, tax, or management experience) or commitment (working busy season hours at a public accounting firm). If employers are unwilling to cave in on their requirements, it can be difficult finding someone with the right level of experience and industry knowledge to fill a role. When you combine this scarcity with employers not budgeting properly to pay for qualified personnel in certain roles, there will be tons of positions left open.
How Can it Be Fixed?
Unfortunately, the causes that I've noted above are the result of long-term issues within the profession. As a result, most of the fixes to the experienced hire talent shortage that I propose would also be long-term solutions.
In order to address the first two concerns listed above, they're simply needs to be more qualified accountants available to fill the positions. To get more qualified accountants in the marketplace, students need to be incentivized to pick accounting over other majors as a career path. I went over some potential fixes for this in last week’s blog, check it out. Even with an increased focus on developing new talent from campuses, companies will also need to train and retain employees as much as they can in the face of these shortages. Companies should be adopting a model that consistently trains employees to prepare them for the next level, including direct mentorship. By adopting such a model, companies would face a smaller impact when it comes time for the boomer CPAs to retire. Having robust training programs or standard operating procedures developed will not only help develop staff internally as the older generation retires, but it will also allow the company to be more flexible when searching for external candidates. In the current market, companies that can train external candidates in some areas will have a significant advantage over the competition because finding a candidate that checks 3/5 of the requirements is significantly easier than finding the unicorn candidate that checks 5/5. Incorporating training and development programs in this way will take some time and effort but doing so will allow companies to fill open positions more easily through promotion and recruitment.
How Does this Affect Me as Someone Looking to Switch Jobs as an Accountant?
If you are searching for a job right now as an accountant, you have an advantage due to all the openings available, but that doesn’t mean it will be easy to find a position you like! Write down your requirements for salary, benefits, job expectations, hours expectations, and location and keep them in mind when searching through all the job postings. Depending on your experience and position, you may also need to consider whether training and support will be a significant deal breaker during the interview process. Once you can find a position (or a few) that you like, apply and see if you can find yourself with a job offer (or multiple offers). With a shortage of talent available, and the increasing demand for positions that were filled by people who retired during the pandemic, the compensation for experienced hires should be increasing, as long as they are a match for the position.
This has been an interesting couple of years for accountants. All the issues that have been haunting the industry in the background for a number of years have all come to the forefront as the pandemic has changed our working reality. With all the challenges finding and developing talent in the modern market, I would not be surprised if there were long-term changes to business and compensation structure for both public and industry accountants. We will just have to wait and see what happens!