Accounting
Misconceptions and mismatches: Dealing with the staff shortage
Of all problems the tax and accounting profession faces, staffing seems the most persistent. Older and younger accountants alike are bailing, driven by a sometimes hard combination of perception and reality.
“The industry as a whole is not attractive to the younger population, and it’s difficult for our staff to work remotely,” said Paul Miller, a CPA and managing partner at
“It certainly seems as though the pool of qualified candidates has begun to shrink and the attraction of qualified staff has become increasingly more difficult,” said Mark Giallonardo, a partner and tax services and tax technical director at Cherry Bekaert in Coral Gables, Florida.
Are there any new answers out there?
Perceptions
According to a
Other problems with the pipeline of American accountants include:
- The ongoing high volume of work accountants have been experiencing makes a career in accounting feel more challenging than other careers;
- Students perceive that their starting accounting salary will not compete with that of other professions;
- Inconsistencies in the makeup of the additional 30-hour education requirement detracts from its value and is a great hurdle;
- Students perceive the CPA exam to be too difficult to study for and pass; and,
- Students don’t know an accountant, lack access to information about the benefits of the career and aren’t attracted to an accounting career because they’ve heard negative things about the profession on social media.
Almost half of the respondents to the survey added that turnover is highest after three to five years of employment. Miller said that his longest-term employee has been with his firm 30 years and his average employee has been with the firm more than 10 years.
Luis A. Orozco/Cin8 – stock.adobe.com
Niches can work against a firm. “It’s been difficult to hire and retain talented staff. This is especially true at my firm, where our niche of foreign tax compliance and reporting requires additional knowledge,” said Manasa Nadig, an Enrolled Agent and owner at MN Tax and Business Services and a partner at Harris Nadig in Canton, Michigan. “We’ve been exploring hiring off-shore talent.”
Solutions?
Firms are getting increasingly creative with staffing fixes: giving once-outlandish raises and bonuses,
In a
The total-dollar picture can cause an employee to pause before jumping to another firm because of just a salary bump, blogger Amanda Lilley writes.
“We pay our staff above [the] industry average, we offer excellent benefits, we have a matching pension plan. More important,” Miller said, “we treat people well and respect our staff.”
“Following the Great Resignation, we were proud to see our turnover level decline and stabilize at less than pre-pandemic levels,” said Elizabeth Newman, chief administrative officer and chief HR officer of CBIZ in Cleveland. “Top talent have options in our industry, so the onus is on us to offer a compelling value proposition and experience.”
“We find that our team members want visibility into their career paths and a better understanding of not only opportunities for advancement but what’s required to advance,” Newman said. “We’ve invested in articulating clear career paths, including aligned learning and development.”
Team members have clear expectations when it comes to innovation and new technologies, and the firm also has mentoring programs, employee resource groups and community engagement initiatives, among other plusses.
Mismatch
Accountants can also benefit from what they haven’t traditionally done: network with other fields.
“Every employer seems to be having issues with finding and retaining staff,” said Larry Pon, a CPA in Redwood City, California. “As employers, we need to understand where this new crop of graduates came from. I hear from recruiters that many are lacking in social skills, especially graduates who went to college virtually.”
“There’s definitely a mismatch,” he added, between “staff expectations and employer needs.”
Jordan Vonderhaar/Photographer: Jordan Vonderhaar/
The Internal Revenue Service has released
The Inflation Reduction Act of 2022 amended Sec. 55 to impose the CAMT based on the “adjusted financial statement income” of an “applicable corporation” for taxable years beginning in 2023.
Among other details, proposed regs provide that “applicable corporation” means any corporation (other than an S corp, a regulated investment company or a REIT) that meets either of two average annual AFSI tests depending on financial statement net operating losses for three taxable years and whether the corporation is a member of a foreign-parented multinational group.
Prior to the publication of any final regulations relating to the CAMT, the Treasury and the IRS will issue a notice of proposed rulemaking. Notice 2025-27 will be in IRB: 2025-26, dated June 23.
The reconciliation bill passed by the House on May 22 is currently being considered by the Senate, and will likely undergo changes before approval by the upper chamber. To what extent the changes will create stumbling blocks before a final bill is produced and voted on is uncertain, with the increased SALT deduction, Medicaid reforms, and repeal of certain Inflation Reduction Act credits on the line.
While much can change between now and the final version of the bill, the following is a quick overview of some of the provisions:
- Bonus depreciation. First-year bonus depreciation, currently being phased down 20% per year since 2023, is 40% for 2025, and will drop to 0% in 2027. Under the One Big Beautiful Bill Act (or OBBBA) it will be reset at 100% for eligible property acquired and placed in service after Jan. 19, 2025, and before Jan. 1, 2030.
- Section 199A Qualified Business Income deduction. The QBI deduction, created by the Tax Cuts and Jobs Act, is available through 2025 to owners of pass-through entities, sole proprietors and the self-employed. The OBBBA would make the deduction permanent, and the deduction would increase to 23% for tax years beginning after 2025.
- Domestic research and experimental expenditures. The OBBBA would reinstate the deduction available to businesses that conduct research and experimentation. Expenses incurred after 2024 and before 2030 would be eligible.
- Section 179 expensing. The bill increases the limit to $2.5 million and increases the phaseout threshold to $4 million for property placed in service after 2024. The limit and threshold would be adjusted annually for inflation.
- Excess business loss limitation. The bill makes permanent the excess business loss limitation for pass-through entities.
- Pease limitation. The bill would make permanent the repeal of the Pease limitation on itemized deduction, but would introduce a new limitation for taxpayers in the 37% bracket for years after 2025. It would also temporarily increase the standard deduction for tax years 2025 through 2028.
- The Child Tax Credit. The bill makes the CTC permanent and raises it to $2,5000 per child for tax years 2025 through 2028, after which it would return to its present $2,000 with an annual inflation adjustment.
- Federal gift and estate tax exemption. The bill increases the federal gift and estate tax exemption to $15 million, and adjusts it annually for inflation. It is currently set at $13.99 million.
One sector the bill is very positive for is real estate, according to Tyler Davis, president of Saunders Real Estate: “It makes a lot of the TCJA provisions permanent. The estate tax exemption is made permanent and raised to $15 million, and the bonus is back to 100% for the next four years. This allows purchasers to depreciate their investments a lot faster, so it makes deals more attractive for investors and developers. A special provision for industrial manufacturing property under the bill, it is eligible for 100% expensing.”
Photographer: Nikita Sobolkov/nikkytok – stock.adobe.com
This would allow 100% of a project’s cost to be deducted in the first year, making it “hugely attractive,” he said. “The administration wants to bring investment back to the U.S. This will incentivize that process.”
Under the bill, the Section 163(j) business interest deduction would expand and allow more interest to be deducted on qualifying real estate, he said. “And they’re redoing some of the Opportunity Zone rules and boundaries, and are lowering reinvestment thresholds for investments. This should drive more investment into rural communities. And, lastly, there are no Section 1031 changes in the bill. That’s a really positive thing from a transactions and reinvestment perspective.”
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