Enjoy complimentary access to top ideas and insights — selected by our editors.

The talent shortage facing the accounting profession is well known at this point, as graduates with accounting majors are deterred by stagnant wages and a lack of education on career paths — while existing accountants leave the field entirely. Amid this identity crisis, firms are starting to look inwards for solutions.

Data from the most recent ADP National Employment Report published this month showed that the service-providing sector added 101,000 jobs in September, 20,000 of which were for roles in professional and business services like accounting and tax preparation. The month before, according to the U.S. Bureau of Labor Statistics, 1,500 new postings described accounting-related openings.

But many in the field say the hurdles to becoming a licensed CPA, including the test itself, are simply not worth the payoff.

Read more: EY fires staff for ‘cheating’ on training courses

“Tuition costing six figures, 150 credit hours just to sit for the exam and a median salary of $79,880 just isn’t going to get most younger people out of bed in the morning when they can work from their couch making money doing things they’re interested in and have a flexible schedule,” said Erin Andrews, owner of the Vero Beach, Florida-based firm Level Accounting & Advisory.

Andrews highlighted the proliferation of social media personalities and private-equity firms encroaching on the accounting space as “supposed” experts, driving the consumer demand for increased availability and devaluing licenses.

“Being available and offering a great client experience seem to be more important than having letters after your name today,” she said.

Some organizations seeking to address this disparity are developing their own training regimens and partnering with outside trade groups to expand recruitment efforts.

In addition to partnering with the National Association of Black Accountants and Future Business Leaders of America, CliftonLarsonAllen launched an apprenticeship program named CLA Academy this year to prepare them for roles across the company.

The New York-based Whitman Transition Advisors debuted its Talent Solutions Team this month to help clients tackle staffing challenges through services that include full-time and fractional recruitment, outsourced advisory and technology tools.

Zachary Gordon, a CPA and chairperson of the New York State Society of CPAs’ digital assets committee, said technology isn’t just essential for addressing the immediate effects of the shortage, but is also shaping the evolution of the profession.

“AI will help to complete mindless, repetitive tasks and allow talent to shine with higher-value aspects of an engagement. … Accounting becomes less about commodities like a tax return or financial statements and more about being a trusted advisor providing tangible value to clients,” Gordon said.

Tod McDonald, a CPA and co-founder of Valid8 Financial, agreed with the sentiment, highlighting how today’s artificial intelligence-powered tools allow what was once lengthy data preparation to be completed in hours as opposed to weeks.

Read more: Talent scarcity puts renewed focus on AI

Outside of wages and upward mobility, the profession’s long hours and general lack of flexibility are driving away younger professionals.

Major firms like Ernst & Young recognize these shifts, and are developing plans to address some of the core issues. The organization’s U.S. firm plans to allocate roughly $1 billion over the next three years to boost early-career compensation and fund the development of AI-powered audit and tax software.

“There was a time where working ridiculous hours during busy season and not seeing your family was a badge of honor,” said Dean Sonderegger, general manager of research and learning at Wolters Kluwer Tax and Accounting. “Many younger employees no longer feel this way and are looking for more balance between their work and personal lives … and are attracted to firms that are more flexible.”

Read on to find out more about the depth of the talent shortage and how seasoned advocates for the profession are working to bring future generations of talent into the fold.

AICPA collaborates to help tackle talent shortage

Amid the growing talent shortage facing the profession, the American Institute of CPAs worked with the National Association of State Auditors, Comptrollers and Treasurers to publish a joint report offering tailored recommendations for creating a strong pipeline of future talent in the public sector.

One of the main disparities highlighted in the report is the differences in accounting and auditing standards between those working in the government and private-sector markets. CPAs working in the public sector often come with specialized expertise in certain areas, but salaries and audit fees aren’t always commensurate with that knowledge.

“We have a talent shortage in accounting that affects business as a whole, and many of the pipeline initiatives the profession is putting in place will help the public sector as well,” Susan Coffey, the AICPA’s CEO of public accounting, said in a statement this month.

Read more: AICPA looks to ease accountant shortage in public sector

The top MPs building out the talent pipeline

When it comes to top leaders working to stem the outflow of professionals from the world of accounting, the eight honorees on Accounting Today’s 2024 ranking of the MP Elite are practicing what they preach.

Public perception, tighter partnerships with colleges and universities, broader education regarding career paths in accounting and more are all areas in which the MP Elite are working to make changes both within their firms and across the profession. These recommendations are designed for deployment right away, or as part of long-term strategies.

“The accounting profession faces a significant challenge in how it’s perceived, particularly by younger generations,” Christopher Geier, chief executive of Sikich, told AT. “To combat this, we need to launch a multitiered education and awareness campaign.”

Read more: Stacking the pipeline

Staffing spotlight shifts from seniority to skill sets

Recruiters are starting to focus less on how long a candidate has been in accounting and more on what skills they bring to the table. But as the pool of available professionals continues shrinking, experts from Southfield, Michigan-based Top 100 Firm Plante Moran weighed in on how other organizations can stay ahead of the curve.

At the heart of the trend are a host of factors — a lack of education on career opportunities being one of the most significant.

“Accounting is not a linear profession, and aspiring accountants are often not informed about the various paths they can pursue. … As a result, early-career professionals may struggle to envision the long-term utility of myriad opportunities associated with pursuing accounting and tax as a profession,” said Paul Bryant and Stan Hannah, partners at Plante Moran. 

Read more: Talent evolution: From years-on-job to agility in action

The talent shortage creates a proving ground for firms

Fewer and fewer college students are choosing to major in accounting, making those who do a valuable asset to firms of any size. But what can companies do to distinguish themselves from their competitors?

“These successful firms will achieve this by creating a culture that fosters mutual support, offers meaningful career opportunities, promotes team cohesion and ensures both personal and professional fulfillment,” Eric Abati, CEO of San Antonio-based Regional Leader ATKG Advisors, said in an interview with AT’s Daniel Hood. “Simply put: Culture wins.”

Abati represents one perspective of leaders — those focused on changing the tried-and-true corporate culture that is standard throughout the accounting profession — while others focus on career mapping and wage disparities.

Read more: Accounting’s pipeline problem: An opportunity in disguise?

What will it take to fix the pipeline issue?

Andrey Popov/Andrey Popov – stock.adobe.com

Competitive wages, ample preparation for certification exams and a rebranding campaign. These are just a few of the recommendations that experts with the National Pipeline Advisory Group shared for how employers can do their part in addressing the staffing shortage.

“With so many of the themes we uncovered, the solutions lie at the employers’ feet,” Jennifer Wilson, who served as facilitator for the group’s work, told attendees at the AICPA Engage Conference in June. “We’re going to have to make changes. We need to take responsibility as employers for these solutions.”

Salaries were the first up, as data from the group’s report found that only one in nine business majors selected accounting as their major, as the others were able to obtain a higher salary in a more competitive industry. 

Read more: NPAG: All hands on deck to solve the pipeline problem