If you are an accounting or finance firm, you may be facing a serious problem: finding enough qualified staff to meet your needs. According to a recent survey by the AICPA, less than 1% of accounting and finance firms can find enough staff, and 90% of them report difficulties in hiring talent. This is a worrying situation that can affect your performance, growth, and competitiveness in the industry.
But what is causing this talent gap, and how can you overcome it? In this article, we will explore the main reasons behind the talent gap, and provide some practical tips and strategies on how to attract, retain, and develop talent in accounting and finance.
Only 1% Of Accounting and CPA Firms Can Find Enough Staff
A recent survey by alliantTalent shows that most CPA firms in the U.S. are struggling to find enough local talent, forcing them to adopt various strategies to fill their ranks. These strategies include hiring workers from abroad, raising starting salaries, offering remote roles, and employing staff without a college degree.
The main points from the survey are:
- Less than 1% of 250 polled CPA firm leaders said they can find the required staff domestically.
- 27% noted that former employees left the accounting industry for better pay.
- A significant 56% expect starting salaries to rise by 11% or more, with the average hike being 14%.
- 75% are now considering hiring employees without the conventional graduation requirements.
- 74% are introducing fully remote roles, and 79% are using technology for basic tasks.
Supporting external data shows that 300,000 accountants and auditors have left their jobs in the last two years. Graduations in accounting are also on the decline, with a 2.8% drop at the bachelor's level and an 8.4% decrease at the master's level in 2021. This trend has been ongoing for five years.
Jim Brady, the CEO of alliantTalent, highlighted that the shortage began in the early 2000s due to various factors, including industry consolidations and the passing of the Sarbanes-Oxley Act. The number of CPAs has dropped from over a million 12-15 years ago to 860,000 today. Brady also pointed out the 150-hour CPA license requirement as a potential deterrent for young people and emphasized the need for the profession to promote itself better to younger generations. He suggested more visibility during high school career days and providing internships to earlier-year college students.
What is the talent gap, and why does it matter?
The talent gap is the difference between the skills and competencies that employers need and the ones that job seekers have. It is a measure of how well the labor market can match the demand and supply of talent. A large talent gap means that there are not enough qualified candidates for the available jobs, or that there are not enough jobs for the qualified candidates.
The talent gap matters because it can have negative consequences for both employers and employees. For employers, a talent gap can result in:
Lower productivity and quality: If you cannot find enough staff to handle your workload, or if your staff lacks the necessary skills to perform their tasks effectively, you may experience delays, errors, mistakes, and customer dissatisfaction.
Higher costs and risks: If you have to spend more time and money on recruiting, training, and retaining staff, or if you have to outsource or hire temporary workers, you may incur higher expenses and liabilities.
Reduced innovation and competitiveness: If you cannot access or leverage the diverse talents, perspectives, ideas, and experiences of your staff, you may miss out on opportunities to create value, solve problems, and differentiate yourself from your competitors.
For employees, a talent gap can result in:
Lower satisfaction and motivation: If you cannot find a job that matches your skills, interests, and goals, or if you feel underutilized or overqualified for your job, you may feel frustrated, bored, or unhappy.
Reduced career development and progression: If you cannot acquire or demonstrate the skills that employers need or value, or if you face barriers or biases in your career path, you may miss out on opportunities to learn, grow, and advance.
Increased stress and burnout: If you have to work longer hours, take on more responsibilities, or cope with more pressure and expectations, you may experience physical, mental, and emotional exhaustion.
Therefore, it is important for accounting and finance firms to address the talent gap as soon as possible. But what are the main factors that contribute to the talent gap in accounting and finance?
What are the main causes of the talent gap in accounting and finance?
According to the AICPA survey, there are three main reasons for the talent gap in accounting and finance:
- A shortage of candidates with the right technical skills
- A lack of diversity and inclusion in the profession
- A mismatch between the expectations and preferences of employers and employees
Let’s take a closer look at each of these causes and how they affect the talent gap.
A shortage of candidates with the right technical skills
The accounting and finance industry is undergoing a rapid transformation due to the advancement of technology and the emergence of new business models, regulations, and risks. This requires accounting and finance professionals to have not only the traditional skills of accounting, auditing, taxation, and compliance, but also the emerging skills of data analytics, cybersecurity, cloud computing, artificial intelligence, blockchain, and digital literacy.
However, there is a gap between the supply and demand of these technical skills in the labor market. According to a report by PwC, 80% of CEOs in accounting and finance are concerned about the availability of key skills, and 38% say they cannot find people with the skills they need. The report also found that only 41% of accounting and finance professionals are confident that they have the digital skills required for their current role, and only 30% are confident that they have the digital skills required for their future roles.
This skill gap poses a threat to the quality, efficiency, and innovation of accounting and finance services. It also creates a competitive disadvantage for accounting and finance firms that cannot access or leverage the technical capabilities of their staff.
A lack of diversity and inclusion in the profession
The accounting and finance profession has historically been dominated by white males, which has resulted in a lack of diversity and inclusion in terms of gender, race, ethnicity, culture, age, disability, sexual orientation, and other dimensions. According to a report by Catalyst, women make up only 23% of partners in accounting firms in the US. According to a report by the American Institute of CPAs (AICPA), minorities make up only 15% of professional staff in CPA firms in the US.
This lack of diversity and inclusion limits the pool of potential talent that accounting and finance firms can attract and retain. It also hinders the innovation and creativity of accounting and finance services, as diverse teams can generate more ideas, perspectives, experiences, and solutions than homogeneous teams. Moreover, it affects the reputation and trustworthiness of accounting and finance firms, as clients and stakeholders expect them to reflect and understand the diversity of their markets and society.
A mismatch between the expectations and preferences of employers and employees
The accounting and finance industry is facing a generational shift in its workforce, as more millennials and Gen Z enter the profession and more baby boomers retire. This creates a mismatch between the expectations and preferences of employers and employees regarding work arrangements, career development, compensation, culture, values, and purpose.
How to Overcame the Talent Gap: Pros of Outsourced Staffing
To find the right talent in this market, accounting firms need to explore innovative recruitment solutions. One such solution is leveraging technology to streamline the recruitment process, such as using artificial intelligence to screen resumes and identify top candidates. This is becoming increasingly popular but it does not solve two remaining problems: on the one hand, this technology is still very new and can hardly predict the future loyalty of a candidate or his decision to remain in the job. On the other hand, there is still a lack of talent available in the market.
Another solution that’s been around for quite some time is partnering with outsourcing staffing companies that specialize in accounting talent solutions. These solutions bring some benefits to accounting firms trying to expand:
Access to a larger pool of candidates: Staffing services have access to a wider range of candidates than individual businesses as they cover both in-house employees who are looking for a change and freelance remote professionals.
Going offshore: Outsourced Staffing Services usually have a large network of international potential hires. A wide range of candidates around the world ensures the most competitive price without compromising experience and expertise.
Expertise in recruitment and pre-selection: Staffing services have a proven well-oiled recruitment system and are more likely to use the latest techniques to find top talent. Their pre-selection process makes sure to understand what drives the candidate's interest and how motivated are day to build a long-term working relationship.