Jun 18 2024 /

Accountant shortage 2024: how to be part of the 1% of fully staffed firms 

Accountant shortage 2024 - Banner

Amidst the frenzy of tax season and throughout the year, accounting firms in the US are grappling with a problem that’s now rippling across the world — an accountant shortage.

In the US, the CPA shortage has led to fewer than 1% of accounting firms saying they can fully staff their organization, resulting in accountants having to turn away new clients

One thing is clear: accounting firms must find ways to attract new accountants in a challenging job market if they want to continue to grow. 

Understanding the accountant shortage

To mitigate the shortage of accountants, accounting firms must first understand why accountants are quitting — and why there aren’t enough replacements.

Demographic shifts

A significant portion of the accounting workforce is at or approaching retirement age. Couple this with the fact that there’s been a significant drop in accounting graduates, and the heart of the problem is clear.

Graph depicting the significant drop in accounting graduates since 2010.

But why are there now so few accounting graduates?

Shifting values

The modern workforce has different professional values than their parent’s generation. Flexibility, purpose, and work-life balance mean a great deal for Millennials and Gen Z workers still envisioning their ideal career path. The shifting priorities of modern workers clash with the traditional image of the accounting profession, which is sometimes perceived as rigid or monotonous.

Industry and educational requirements

The increasing cost of higher education, along with stringent prerequisites such as the US’s 150-hour requirement plus exam for becoming a licensed CPA, means that prospective accountants have to invest a lot of time and money on the front end. 

Limited compensation

While accountant salary levels are competitive in some markets, the path to higher-paying positions and roles with more responsibility appears to be limited. In the US, median starting salaries for finance students are around $61k versus accounting’s $53k per year

5 ways to beat the accountant shortage at your firm

While these certainly aren’t the only reasons for the current accountant shortage, what’s more pressing is what accounting firms and the industry as a whole do to reverse the shortage of accountants. Here are some suggestions:

1. Facilitate healthy work habits

While nearly all accountants suffer some burnout, what team members do during their work hours can be as effectie in combating burnout as offering a healthy work-life balance.

Multiple studies show that sitting all day is harmful to one’s health and can be mitigated with just a minor amount of activity. Knowing this, accounting firms that want to attract new candidates should create and showcase an environment that encourages healthier habits during the workday, such as:

  • Implementing wellness programs that offer staff the opportunity to move and unwind their minds at work
  • Encouraging employees to try time management exercises such as the Pomodoro technique, in which timers guide 25 minutes of fully focused work, followed by five minutes of walking to create healthy breaks and movement
  • Investing in ergonomic office furniture designed to offset the adverse effects of sedentary work
  • Allowing mental health days that help employees stop burnout before it happens
  • Providing access to physical and mental health support through comprehensive insurance
  • Offering memberships that facilitate healthy activities such as meditation and exercise

2. Offer career development opportunities

A Pew Research Center study found that 63% of respondents cited a lack of advancement opportunities as a reason for leaving their current job.

In order to attract accounting prospects, firms must show candidates that there’s a growing future ahead of them. This doesn’t mean dangling the possibility of promotion in front of candidates. Instead, it means doing things that offer support for professional advancement.

What does this support look like? Consider these options:

  • Provide subscriptions to online learning programs where team members can access valuable courses within the field
  • Cover the cost of accounting certifications that will boost team members’ qualifications
  • Develop mentorship programs that pair new accountants with experienced individuals who can guide them on their career paths
  • Plan cross-functional training opportunities where employees can learn about different roles within the firm
  • Offer bonuses for employees who obtain valuable certifications
  • Create a study leave program that allows employees paid time off to prepare for certification exams
  • Conduct career planning sessions where team members can discuss aspirations, discover possible career paths, and share resources for achieving their goals

By implementing such opportunities, firms enhance their expertise, improve their service quality, and position themselves as a desirable employer for ambitious professionals. While some team members may discover goals that lead them away from accounting, they may find other roles within the firm that are more suitable for their talents. Additionally, those who remain in accounting will be more likely to stay with the firm since they utilize and value the ongoing support.

3. Offer flexible work models

As the debate rolls on about employee productivity while working remotely, the fact remains that valuable candidates, especially younger ones, prefer to have options. Offering flexible work models can be a significant draw for accounting firms aiming to attract new talent within a competitive landscape.

Firms can efficiently manage tasks from anywhere without compromising on productivity, security, or service quality. This is especially true if firms use the right practice management software. Utilizing this software to securely collect client documents, maintain communication, and manage tasks and workflows allows firms to offer team members the option to work remotely, either part-time or full-time. 

Beyond remote work, it’s also worth implementing flexible hours. With the old paradigm of rigid working hours fading, firms that want to keep or attract more accountants should consider allowing employees to determine their ideal hours — as long as they complete their work on time, of course. This helps accountants take care of family responsibilities during the day, work when they’re most productive, and incentivizes them to remain with their current firm instead of exploring opportunities in a different company or industry. 

Laptop displaying practice management software that lets businesses run their accounting firm from anywhere with internet access.

4. Leverage technology

Growing technology trends in accounting are making it easier than ever to eliminate mundane tasks, work with teams across the globe, and focus on higher-level work that keeps employees engaged. 

Much like people want advancement opportunities, they also want to feel stimulated in their jobs. Constantly completing repetitive, routine tasks leads to bored employees wondering if there are more exciting career paths out there. Using technology to automate these tasks not only makes practices more efficient but also keeps team members focused on doing work that’s more valuable to the firm and more stimulating to them.

Using cloud-based accounting platforms allows for real-time access to financial data and collaboration from any location, which is a significant advantage for firms offering remote work options. Additionally, working with AI in accounting for analytics and data-driven insights will give team members some experience with an evolving technology, creating a sense that they’re part of an organization at the cutting edge of future trends, not a place where they constantly fill out and file paperwork. 

5. Embrace feedback

Creating an environment where employees feel comfortable sharing their thoughts, concerns, and suggestions signals to them that their opinions are valued. Whether it’s an open-door policy or conducting regular employee surveys, embracing feedback helps adjust practice policies to keep employees satisfied in their roles. 

For this to be effective, firms must demonstrate a commitment to acting on feedback. This could mean making policy changes, providing additional resources or support, or implementing new initiatives based on employee suggestions. Seeing their input lead to tangible changes can increase employees’ sense of ownership of the firm’s progress and encourage them to stay and drive further success. 

Takeaways

While some publications may claim that the accounting profession is in crisis due to the number of retirees outpacing the arrival of new accountants, there is hope. Forward-thinking firms have an opportunity to grow beyond the paradigms of the past and create a new trajectory for those who choose accounting as a profession. 

These strategies make a firm attractive to new accountants and contribute to a positive, supportive, and dynamic workplace culture that aids retention. When it comes to leveraging technology, TaxDome provides scalable solutions that help firms do more with less. Read more to discover how TaxDome is helping accounting firms fight the accountant shortage and why it’s the operating system for your practice. 

Jeff Nichols

Jeff is a content writer who works in the SaaS and B2B space, particularly in invoicing and accounting. He enjoys helping businesses make informed decisions that will assist them in growing and reaching their goals. As a writer at TaxDome, Jeff creates content that helps customers better understand the platform and stay informed about developments in the accounting industry.

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