Accounting firm business models need to change to retain and attract CPAs amid the worst talent shortage in recent history, the Pennsylvania Institute of Certified Public Accountants (PICPA) asserts in a new survey.
The report, “CPA Talent Retention 2024: Keeping Your Best Performers,” delves into why entry- and mid-level CPAs are exiting the profession and offers strategies for firms to retain their current talent.
“The findings from our latest report emphasize the complexity of talent retention and the necessity for firms to adopt innovative strategies that address both individual and organizational needs,” says PICPA CEO Jennifer Cryder. “This report aims to guide accounting firm leaders towards effective strategies that we believe, when properly implemented, will enhance both retention and firm performance.”
The survey solicited responses from 323 professionals with 0-15 years of experience in public accounting who have left the field within the past five years (career changers). Also surveyed were another 449 Pennsylvania CPAs with 3-10 years of experience (current talent).
Notable findings from career changers:
- When asked to complete this statement “My desire to stay at my previous firm or in the accounting field would have increased if…” the leading response was higher salaries (39.7%).
- Other top responses were: “there were more flexible work options” (35.6%), “entry- and mid-level employees were more valued” (33.5%) and “there were better benefits offered” (30.4%).
- When provided the same question, but specific to work-life balance, the leading response was “there were more flexible work options around hours and location” (35.6%).
Notable findings from current talent:
- The majority of respondents (56.7%) stated they have a higher desire to stay in public accounting, with 73% stating they would like to stay with their current firm.
- Career development is a critical factor for retention with 85% of respondents saying their firm actively supports their career development, and 78% saying their firm offers interesting career opportunities.
- Still, the No. 1 response to the question “What would increase your desire to stay at your firm in the accounting field?” was “there were higher salaries” (46.9%), followed by “my working hours were capped” (42.3%) and “there were better benefits offered” (37.4%).
With over 70% of CPAs nearing retirement and a notable decrease in accounting graduates and CPA exam takers, the need for firms to fundamentally move away from the traditional “pyramid” model to a more robust “pentagon” model, better leveraging automation, AI and outsourcing is critical to long-term success, the report says.
This shift reduces reliance on a broad base of entry-level talent, allowing firms to focus on hiring fewer, but better retained, new staff while fortifying the middle managers with better compensation and more diverse career opportunities. “The PICPA believes this approach not only can help meet client needs effectively but also aligns with salary expectations and improves work-life balance, ensuring high-quality work without compromise,” the report said.
Key findings from both career changers and current talent groups:
- There is no quick fix to improving talent retention – Retaining talent isn’t simple. Firms need to step back and look at whole person retention. Both groups indicate that motivations to stay include higher salaries, but also flexible work options, being valued, balanced workload, better benefits and time-off packages, and professional development.
- Most current talent want to stay in the profession – and with their current firm. More than 73% of those responding gave high ratings (five or higher in a range up to seven) indicating that they would like to stay with their current firm.
- Workload management is broken. Unreasonable, unsustainable productivity and time expectations are crushing the pipeline of talent and pushing out current talent, the report said.
- Salaries are lower than positions with comparable required education. Higher salaries was the top motivational factor for the current talent group.
- Virtually every firm needs to re-evaluate and modify its business model. Talent retention is expensive, but talent replacement is even more expensive. Implementing the changes highlighted and recommended in this research will call for firms to operate differently, the report said.
The survey also provides demographic breakdowns between male and female respondents and a breakdown of respondents by ethnicity.
