Why There Is a Talent Shortage in Accounting?

_________

On this episode of The Accounting Talent Podcast, host Rob Brown is joined by Jeff Phillips, CEO of Paget Business Services and founder of AccountingFly, to dive into the alarming talent shortage facing the accounting profession. Statistics reveal around 300,000 fewer accountants and auditors in the US over the past two years, a staggering 17% drop. The root cause? A weak value proposition from the profession, offering less attractive compensation, flexibility, and work-life balance compared to industries like tech. This perception is driving college students away from accounting towards seemingly greener pastures in investment banking, consulting, and tech firms.

Accounting firms face intense competition for talent, not just from each other but from aggressive employers in other sectors with enticing perks and career paths. However, there is hope. By rethinking their value propositions, exploring untapped talent pools like offshoring, remote work, freelancers, and developing innovative hiring/training approaches, firms can regain their appeal to the next generation of accountants. The profession's future hinges on its ability to revamp its employer branding and talent strategies.

"The accounting profession is not going to die, Rob. It's not going to wither on the vine. There is lots of talent out there and there are options and hope." - Jeff Phillips [00:00:27]

Key Takeaways:

1. There is a shortage of accounting talent, with around 300,000 fewer accountants and auditors in the United States over the last two years, representing a 17% loss. [00:11:50]
2. The accounting profession is facing a brand and value proposition problem, as the compensation, flexibility, and work-life balance are perceived as weak compared to other industries like tech. [00:04:30]
3. College students are choosing alternative career paths like investment banking, consulting, and tech companies, which are seen as more attractive than "boring old accounting." [00:14:55]
4. Accounting firms are not just competing with each other for talent but also with more aggressive employers in other industries, offering better perks and career paths. [00:16:50]
5. There are solutions and untapped talent pools that accounting firms can explore, such as offshoring, remote work, freelancers, and non-traditional hiring and training approaches. [00:20:30]

[00:02:50] - Discussing the value proposition of the accounting profession
[00:11:50] - Statistics on the accounting talent shortage
[00:14:55] - Reasons why fewer people are entering the accounting profession
[00:16:50] - Competition for talent from other industries
[00:20:30] - Solutions and untapped talent pools for accounting firms
[00:23:00] - Preview of upcoming topics on the Accounting Talent Podcast

_________

The Accounting Influencers Podcast is for accountants, bookkeepers, finance professionals and those who lead, work in, and serve them. Hosted by Rob Brown and special guests who are influential within their field, the podcast covers topics such as leadership, business growth, technology and automation, diversity and career development. Join the accounting influencers conversation at one of our virtual speed networking events for influential leaders and professionals in the accounting, finance and tech world:

[SmithJonny]

I don't think the people who might be interested in accounting think it's boring. To everyone else, sure. But I think the long hours and low pay finally caught up with the old owners. It's just not worth it when there are so many other options.

[Favion]

The number one reason for the low talent pool is compensation. Accounting is very specific and requires serious education. For example, firms are asking for talent that requires 6 years education but pay recruits like someone who has two year degree is radiology tech. If that’s the case why would anyone choose accounting over the radiology tech course.

[dre]

The problem with all these professions is that there is a lack of willingness to train and mentor the new generation.

[coffeepandacat]

I'm starting my accounting journey this fall🎉🎉🎉 Before this I've been a pre-health student. I was going to do pharmacy school. I've work as a pharmacy technician for 3 years and I've seen enough. No more. No nursing, *HELL NO*. And the field of pharmacy is destroyed. Healthcare is not for me. Currently in an alternative role as a pharmacy technician and I work in an office. I love it. I want a job that emulates this environment forever or possibly offers remote work.

[ashfordj]

High stress, high hours, relatively low pay, but pay is almost irrelevant due to the first two factors. The best opportunity you'll find is a client poaching (rescuing) you from public accounting.

[theavalanchman]

“Cant give you experience if you don’t have experience” makes the degree completely useless. Took me two full years to finally land a job.

[emilyau]

What would be attractive to my generation for this industry is if they had accountant salaries start at a particular state's middle class income for industry staff accountants. For firms, starters should be paid reasonably to their cost of living, and if they are working for long hours, pay overtime. If that happened, accounting would attract more people cause then there's stability and being middle class again. And no, in the U.S. 40k-60k is not enough to live comfortably in high cost of living states. Increase the pay, and it will speak to my generation.

[gumpgump]

This was a great video. I am in my final year of my bachelor's degree in accounting and have applied for many internships and jobs in public accounting because that was my plan, but have barely heard back from any. I cannot even get an internship as they say I don't have enough experience. How does that even work the whole point of an internship is to get experience. I even had relatives that worked at the places I applied and had them refer me. I would not advise anyone to enter this career at this time due to the inability to even get your foot in the door. I know accounting is not the only profession going through this, but it has to be in about the worst shape as the whole system feels broken. I am wondering if there any other ways I could use this degree, and what other business related jobs can you get with it?

[brooklynharris]

The partners earning millions per year compared to the slave workers on a meager wage is a factor in people shunning an underpaying elitest business model such that accounting holds. If overtime is an exception and not the rule, is properly compensated, and life/work balance is respected, this may change the landscape of accounting.

[marpleloo]

Glassdoor will destroy any self-perception a firm has of itself. Their reputation is only as good as the people who exit it.

[wz]

I left corporate tax (ASC 740) for software engineer role. The main thing driving the change was long hours for minimum pay. In addition, my new employer offers 6 weeks of paid paternity leave at 100% which is fantastic. Oh and I am fully remote.

[Michael-tus]

Keyword, "talent." There's no shortage of people with accounting degrees, only a shortage of highly experienced pros willing to work for peanuts.

[stephaniesmith]

It is true that you work 60-80 hrs a week during quarter end and year end. They need to be honest about the hours. We are needed but it’s hard work and can be stressful. Also the month end quarter end and year end has no flexibility for time off.

[ThomasMorris-oe]

As a recent tax preparer with a B.S. in Econ and now taking accounting classes at a J.C. to apply to a Master's in Accounting program, I can say the biggest shock to me was the lack of B.A./B.S. programs. You can get an Associates, a Certificate, a Master's, a CPA, an EA, etc., but there aren't many Bachelor degree programs in accounting in Northern California, at least that I found... many Master's programs, though. So undergrads choose a different path from the beginning.

[MaryBarbaraZ]

I am at the beginning of my "investment journey", planning to put 85K into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?

[MfundoTheFellowActuary]

As a aspiring Charted Accountant CA(SA) in the few years when I qualify I am looking to move abroad, I am from South Africa.

[krzysztofkopciewicz]

Great talk, thank you.

I am certified attorney from EU and due to the saturated law services market, I switched on tax (Transfer Pricing mostly). Career development around accounintg is phenomenal here. I am planing to go for ACCA.

[eikajung]

I thought this was a very interesting talk. I used to work at NetSuite, which is a tech company that hires a lot of former CPAs in all customer facing departments. It was not evident to me that having the CPA really made those roles more successful in sales, solution consulting, etc. since the job was not allowed to give accounting advice, only empathy. But it certainly helped those folks land the job. Hearing this interview also drew out the subconscious thought I had in considering a CPA - which was that I don’t really want to be a CPA, I just want to use it as additional credentialing. A bit like getting an MBA. I agree fully that if tech companies are recruiting CPAs, it would be hard for someone not to go down that road. Anyway, just some thoughts in agreement

[edward]

Smart accountants start their own firms. Work for yourself.

[therealmcgoy]

I am an online accounting student. My only gripe with the learning is that they throw so much information at you so fast its like your brain doesnt have time to fully absorb everything. The major things like the accounting equation, some cost/managerial accounting, debits and credits and financial statements are the only things I have been able to retain. I am a alittle worried over this though as I would be terrified in a job interview if they asked me trick questions outside of the basics. Originally I was studying computer science but discovered I am pretty bad at programming and not sure I enjoy it. Currently I am in the trades but want to get out, I dont want to destroy my body anymore.