Hiring and keeping staff has always been a top concern for CPA firm leaders, but the unprecedented talent shortage of the last few years is prompting some serious soul-searching.
The AICPA has launched a multi-pronged Pipeline Acceleration Plan to boost the number of accounting graduates who go on to earn their CPA; several state CPA societies are questioning the requirement for 150 credit hours to obtain the license; and firms are turning to accountants offshore and hiring more non-CPAs to fill their staffing gaps.
Adding his insights to the discussion surrounding the No. 1 problem facing the profession today was Geoffrey Brown, president and CEO of the 21,000-member Illinois CPA Society (ICPAS), who shared his thoughts at last week’s ICPAS annual summit in Chicago.
The numbers: There were 67,336 unique CPA exam candidates in 2022, down 7% from 2021, but even with a 3% increase this year, the numbers remain at record lows, Brown said. “We’ve got a lot of work to do in terms of telling the story and getting young people engaged and thinking about, one, majoring in accounting, and then pursuing CPA licensure.”
Retention is also an issue. It’s the No. 2 management challenge for firms of all sizes for a third year in a row, he said. The professional services industry, which includes accounting, has the highest global average annual turnover rate at 13.4%, according to 2022 LinkedIn data. That turnover occurs earlier in the career and during busy seasons, and to understand the trends, ICPAS is conducting research to identify the differences between the views of employers versus employees.
To highlight these issues, Brown keyed in on five main areas related to talent acquisition and retention:
National Talent Management Strategy – Unlike the legal and medical professions, accounting does not operate with a permanent national talent management strategy, which means the profession is constantly playing catch-up. “This isn’t the kind of thing you can staff up in a crisis,” he said. “You need to have investments in that care and feeding for the long term, so it really delivers when you need it.”
Pipeline Acceleration Plan – The AICPA has undertaken a national project to bulk up the pipeline by addressing the image of the profession, examining education and experience requirements, and increasing partnerships with educational institutions. Brown also applauds recent debates over the current CPA license requirement for students to earn 150 credit hours – which amounts to an extra year of college – without any guidance on what should be studied. “We talk to young people all the time who really aren’t clear on, ‘Should I be taking swimming pool management or should I be taking classes in data analytics? ’ ”
Pathways to Licensure – The AICPA and NASBA have unveiled a new partnership with the Tulane School of Professional Advancement for the next academic year that may be a model for other universities. Graduates can get paid, on-the-job experience at a firm while taking affordable online classes to earn the 30 additional university credits needed to earn the CPA designation. Brown also supports an apprenticeship model, which would be similar to a medical residency program, where graduates can work in a firm and gain academic credit for doing so.
Starting Pay and Career Pathways – “One of the biggest shocks for me when I came into this world was just what the starting pay looked like for a new professional,” Brown said. While the lifetime earnings for an accountant are potentially much higher than for other finance professionals, “It’s hard for a young person to connect those dots when they’re thinking about the burden of the cost of their education and then also having low wages and a high cost of living in those first few years.” Additionally, Brown noted that not all accountants want to become a partner, so alternative career paths should be considered.
Accounting Perceptions – Brown said accountants don’t do the profession any favors by sharing busy season war stories. “We should be talking about the impact that you’re having as professionals, the meaningful nature of your work, work-life balance and the reward you get from a career in public accounting or corporate finance.” He ticked off some common perceptions among students that are hurting the long-term relevance of the CPA profession:
- Decreasing demand for CPAs
- Not enough positive social impact
- Slow career advancement
- Uninteresting work
- Not enough diversity
- Low starting salaries
- CPA credential lacks ROI
- Unappealing regulatory environment
- Lack of work-life balance
- CPAs are boring
“Clearly they haven’t met enough accountants,” Brown said.