Accounting
How the accounting industry can fend off a talent crisis
Accounting has long been considered a space ruled by reliability and stability. The industry itself, driven by ceaseless consumer demand and dependable rhythms, promotes job security and often even attracts a certain personality type – creatures of habit who find comfort in familiar routines and steady surroundings.
Yet the accounting industry is currently in the midst of unprecedented volatility, at least in terms of staffing and maintaining a viable workforce balance. A generation of CPAs is at or nearing retirement age, and the number of new accounting professionals entering the field seemingly won’t be enough to keep up with future needs. Whether the talent crisis in the space is an existential one is up for debate, but this much is clear: Doing nothing isn’t an option.
The problem isn’t breaking news in the accounting field, but even among those who acknowledge the looming staffing shortfall, agreement on and action toward concrete solutions has been too slow or altogether absent. Change is necessary. Here are some practical steps that, if supported
across the field, could help shake the accounting industry out of its staffing slump.
Why the accounting industry is facing dwindling numbers
No surprise here: the Baby Boomers are again influencing the narrative. Many CPAs from this generation are aging out of the working world, as the AICPA indicates that
But in the accounting field, the candle is burning at both ends. At the same time that CPAs are entering retirement at unprecedented rates, far fewer young workers are falling in behind them to pick up the slack. The stability and security of entry-level accounting positions (and the promise of future growth) are no longer the draw they once were. The two trends have led to a rapidly shrinking talent pool that puts firms — and their clients — in an extremely precarious position.
Although certain accounting houses may be savvier or better equipped to take on the workforce shortage, everyone in the field is rowing against the tide. It won’t be a problem that is solved individually or even organizationally. Long term, industry-wide staffing is an entrenched, systemic issue that will require big ideas and likely sweeping changes that are embraced and implemented throughout the space. So how does the accounting industry, as a whole, close the labor gap?
Closing the talent gap in the accounting space
The current labor crisis in the accounting industry has been decades in the making. Any notion that a single adjustment or introduction could stem the tide, or even that a brilliant suite of solutions might instantly turn things around, is a naive hope.
Fortunately, this is the industry’s specialty. Starting with three pillars — but certainly not leaving it there — the accounting field can begin restocking its depleted ranks and building a new brand that will help sustain its numbers over time.
Better incentives: Accountants have always been attracted to the comparatively strong pay, solid upward mobility and relative job security in the field. But, as has been the case in other fields, those benefits don’t go as far as they once did. And because the demands of the tax calendar often shackle firms and their CPAs in many ways, accounting employers may need to get creative in their offerings — everything from first-class professional growth opportunities and a more flexible work schedule to a company car allowance and on-site daycare.
Adjusted job requirements: Accountants require extensive training and certification — CPA isn’t exactly a learn-on-the-job role. But there may be ways to create nontraditional paths into the industry, particularly in compartmentalized roles that do (or can) allow prospects to grow into more prominent positions. Talent assessment platforms and skills-based hiring can help firms identify quality candidates who can provide immediate workforce contributions while building toward greater long-term value for an organization.
Rebranding the industry: Admittedly, this is a biggie. Returning to one of our initial points, accounting has long been considered a buttoned-down, straight-arrow industry. And while wanderers and creatives and outside-the-box thinkers may seem incongruous with the industry, there is a space in the middle where accounting firms would find a larger and more diverse talent pool. The big players in the field don’t have to go full Silicon Valley — juice bars, massage rooms and sleep pods — to attract more quality prospects and begin changing what it means to be an accountant. By simply listening to the needs of workers currently in the space (and taking the occasional page from other competing industries), accounting firms can start wooing more and higher-caliber job candidates.
It’s unclear exactly how long it may take to undo the current accounting talent crisis. But given the trajectory of the numbers and the fact that most experts are bracing for the worst for at least the next calendar year, it seems that a focused, industry-wide strategy is in order. At the very least, accounting firms must begin treating every graduating class as an opportunity to welcome more candidates into the labor force. The young, eager workers who once showed up in droves on the doorstep of the accounting industry are far fewer than they once were. It’s time to boost their numbers — and make moves that will keep them in the field over the long haul.
The Financial Accounting Standards Board released an
FASB said public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods starting after Dec. 15, 2026, and interim periods within annual reporting periods beginning after Dec. 15, 2027. But early adoption of the new standard is permitted.
FASB
The update originally said that the amendments are effective for public business entities for annual reporting periods beginning after Dec. 15, 2026, and interim reporting periods beginning after Dec. 15, 2027. But after the update was issued, FASB was asked to clarify the initial effective date for entities that don’t have an annual reporting period ending on Dec. 31 (known as non-calendar year-end entities).
Because of how the effective date guidance was written, those companies could have concluded they would be required to initially adopt the disclosure requirements in an interim reporting period, as opposed to an annual reporting period. FASB’s intention was for all public business entities to initially adopt the disclosure requirements in the first annual reporting period starting after Dec. 15, 2026, and interim reporting periods within annual reporting periods starting after Dec. 15, 2027. It acknowledged there was some ambiguity about that intention in the original guidance, so it has issued the new update to clarify the effective date for non-calendar year-end businesses.
UHY, a Top 50 Firm based in Farmington Hills, Michigan, is expanding its presence in Michigan and Missouri by combining with two firms: Tama, Budaj & Raab, P.C., also headquartered in Farmington Hills, and Botz Deal & Co. P.C., a firm with three St. Louis-based locations in St. Charles, St. Peters and Wentzville, effective Jan. 1, 2025.
Tama, Budaj & Raab dates back over 50 years. All of TBR’s professional and administrative team members will become part of UHY and continue in their current roles, relocating to UHY’s office in Farmington Hills.
Botz Deal was founded in 1969 and provides services to privately owned businesses and their owners, not-for-profit organizations, and governmental entities, as well as individual tax planning and preparation. All professional and administrative team members will become part of UHY and continue in their current roles.
“UHY is proud to welcome TBR and Botz Deal to our growing, forward-thinking firm,” said UHY U.S. CEO Steve McCarty, in a statement Monday. “These combinations exemplify our commitment to strategic growth—expanding within our established markets as well as breaking new ground in targeted regions across the nation.”
Financial terms of the deals were not disclosed. UHY ranked No. 29 on Accounting Today‘s 2024 list of the Top 100 Firms, with $349.7 million in annual revenue. The firm now has over 40 offices and more than 1,800 team members and 150 partners.
Last month, UHY received
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Public accounting offers many opportunities for growth, and the proof of this is the rising revenues at most of the firms that submit their numbers in the many surveys. One thing common among those firms is their expanding array of services.
Managing an accounting practice is complicated and involves many functions that need to be carefully calibrated and integrated to achieve success. However, there is one immutable fact, and that is a desire of our clients to engage us for those services. Without that, nothing else matters. Excellence in every other facet of operating the accounting business will not matter. So, how can you grow so that 2025 is your best year ever? You need to offer more services to your current clients and then to new clients.
Growth from existing clients is called organic growth. Growth from new clients is external and arises from marketing activities and client acquisition by purchase or merger. If you want to grow, you need growth from both organic and external sources. How much you want to grow and whether you want to grow has to be strategically determined, but a minimum decision has to be that some growth is needed.
Added sales of new services are more easily obtained from existing clients. There is no selling who you are, your reliability, or your willingness and ability to provide value in everything you do for your clients. Each of these need to be conveyed to new clients before you even get to the pitch of the services you will perform for them.
So go after the easier sales first, i.e., to your existing clients. Here’s a way to get started:
- Identify potential needs of your top 20 business clients.
- Arrange those needs into services you presently offer, and
- Services you do not perform.
- Match the potential needs with this group of 20 clients with services you presently offer.
- Contact five of those clients to obtain an engagement for at least one such service.
- Set a goal of initiating a new service for each of those five clients in the new year.
- If you are unsuccessful with your first five targeted clients, then expand the list until you succeed with five added engagements.
- You can try to introduce each of these 20 and even more clients with added services, but I think setting a goal of five added engagements is a good way to start.
- Expand your service offerings by resolving to learn and gain proficiency in at least one new service during the next year.
- Get started by picking a needed service that you do not perform and use that for your personal growth along with your practice’s growth.
Overly active practitioners might judge my suggestions to be too placid, while many owners and partners who are content with leaving things as they are will judge me to be excessively aggressive. Either way, I do not see how anyone could lose by selling five large clients the services they need and learning a new one for themselves. I view this as a no-lose growth method.
Check out some ideas of added services described in a
Make 2025 your best year ever by doing something new to make it your best year ever.
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