Addressing the Accounting Talent Shortage: Challenges and Solutions
The accounting industry is facing an unprecedented talent crisis. Fewer new graduates, rising retirements, and increased burnout are leaving businesses, accounting firms, and even government agencies scrambling to find skilled professionals. This shortage has wide-reaching impacts, from operational delays to increased financial risks for companies. To mitigate these effects, organizations must implement both immediate and long-term strategies.
Decline in New Accountants
The pipeline of new accountants is shrinking significantly. According to the American Institute of CPAs (AICPA), the number of candidates taking the CPA exam dropped to just over 67,000 in 2022, marking the lowest in 17 years. This trend is largely due to the high educational costs and rigorous CPA licensure requirements, which include completing 150 credit hours.
In addition to fewer students pursuing accounting degrees, the number of graduates entering the field is also on the decline. A 2022 survey by Personiv found that bachelor’s degree graduates in accounting dropped by 7.8%, and those with master’s degrees fell by 6.4%. This creates a pipeline issue, with fewer young professionals to replace retiring accountants.
Retirement Wave of Seasoned Accountants
The aging workforce is compounding the problem. AICPA estimates that 75% of current CPAs will retire within 15 years, creating a significant talent gap. Similarly, the Taxpayer Advocate Service noted that 18% of IRS employees are currently retirement-eligible, with that number expected to nearly double to 37% in five years. As experienced professionals leave, companies are struggling to fill critical roles, leading to slower financial reporting and increased compliance risks.
The Challenge of Burnout
Burnout is another major issue, particularly during peak times such as tax season. The long hours, tight deadlines, and increasingly complex regulations are pushing many professionals out of the industry. According to Gallup, disengaged employees contribute to a staggering $450 billion to $550 billion in lost productivity across the U.S. economy annually, with accounting playing a significant role in this figure. Burnout not only reduces retention but increases the likelihood of costly errors in financial reporting, further exacerbating the talent shortage.
Technology and Retention
Younger accountants are more inclined to seek flexible, tech-forward work environments. Firms that fail to embrace new technologies risk losing talent to competitors that do. A Wolters Kluwer report found that firms using cloud-based software and artificial intelligence (AI) to automate routine tasks, such as data entry and reconciliations, have higher retention rates among younger employees. These technological advances not only improve work-life balance but also enhance accuracy, helping firms cope with smaller teams.
Solutions to the Talent Crisis
Businesses must adopt both short-term and long-term strategies to navigate the accounting talent crisis. In the short term, outsourcing accounting and finance help alleviate pressure on existing staff as well as the company struggling to find talent. Personiv's survey also found that 90% of CFOs have already outsourced some accounting functions, while many more are considering it.
In the long-term, the future of accounting requires professionals who are adept in data analytics, strategic planning, and advanced financial software. Companies should invest in technology and continuous education programs. By leveraging AI and automating routine tasks, firms can also create more appealing work environments for younger professionals, improving retention.
The accounting talent shortage poses serious risks to businesses, government agencies, and the broader economy. Declining interest from younger generations, an aging workforce, and burnout among current professionals are all contributing to the crisis. However, by adopting automation, outsourcing, and talent development strategies, organizations can address both short-term and long-term challenges. The road ahead requires immediate action to ensure the sustainability and future growth of the accounting industry.