Running on Empty: How Companies Can Thrive Amidst the 2023 Accounting Shortage
The widening shortage of skilled accountants and financial professionals continues to pose significant challenges in the industry. The profession has witnessed a decline of 17% in the number of accounting professionals since its peak in 2019, according to Bloomberg Tax Analysis. Furthermore, the U.S. Bureau of Labor Statistics projects a substantial demand for accountants and auditors, with a 136,400 annual projection of job openings over the next decade.
The accounting talent shortage has far-reaching consequences, particularly on audit quality, thereby exposing companies to increased financial risks. A 2022 Deloitte survey revealed that 82.4% of hiring managers for accounting and financial roles at public companies face challenges in talent retention. The situation is no different for private companies, with 68.9% of hiring managers reporting similar issues. Multiple factors contribute to the shortage, including the retirement of CPAs and accountants, the impact of the Great Resignation, a diminished CPA pipeline, and changing industry demands.
To navigate this challenging talent landscape, companies must adopt strategic approaches to maintain financial stability and credibility:
Recognize Changing Workloads: As industry demands evolve, accounting teams must adapt to accommodate new criteria, such as environmental, social, and governance (ESG) standards. Ensuring a sufficient headcount in accounting departments prevents employee dissatisfaction and burnout, improving overall performance and retention.
Utilize Outsourced Accounting Firms: One effective strategy to address the talent shortage is partnering with outsourced accounting firms. These firms provide a dedicated team of skilled professionals, well-versed in the latest accounting practices and technologies. By outsourcing their accounting needs, companies gain access to specialized expertise, while also alleviating the burden of talent retention and recruitment. Embracing outsourced accounting not only mitigates the risks of the talent shortage but also allows companies to focus on their core competencies, driving business growth and success. "In the face of the accounting talent shortage, outsourcing accounting services becomes a valuable lifeline," says Hector Perez, CEO of Quantum FBI. "Partnering with outsourced firms like Quantum equips businesses with skilled professionals, mitigating risks and enabling focus on core competencies for long-term success."
Focus on Technological Skills: Embracing technological advancements is essential. Prioritize hiring candidates with strong technological skills, such as proficiency in enterprise resource planning (ERP) software. This enables streamlined accounting processes, allowing teams to achieve more with fewer resources.
Keep Staff Happy: Employee retention is crucial amidst the talent shortage. Offering non-financial benefits, like flexible work schedules and meaningful titles, enhances job satisfaction and reduces the likelihood of valuable employees seeking alternative opportunities.
As the accounting and financial industry faces a shifting talent landscape, companies must adopt a multi-faceted approach to overcome the challenges of the shortage. By recognizing the shifts in the industry, focusing on technological advancements, prioritizing employee satisfaction, and embracing outsourced accounting solutions, corporate leaders can navigate this new frontier and position their companies for long-term success.