In Pursuit of Profit
Read our expert article below or sign up to get articles sent to your inbox.
For the last few years, it seems like every accounting article has mentioned the shortage of accountants in one way or another. Business leaders, recruiters, and accountants themselves are bemoaning the ongoing accountant shortage. In a time when people have a hard time agreeing about anything, the consensus these days among everyone talking is unanimous – the scarcity of accountants has become a serious problem. And yet, the proposed solutions continue to fall short of addressing the problem in a meaningful way because they fail to take into account why accountants are actually leaving.
Establishing a Framework to Understand the Accounting Exodus
Think about it like this – you just broke up with your significant other. Does complaining about it help? No (although it might feel good). Does looking for someone else help? Sort of. When you find someone new, you will indeed have replaced the partner you lost, but for how long? Without knowing why your first partner left, you won’t know how to avoid the same issues again. This is a great metaphor for the accounting shortage. We all knew the relationship had been rocky for a while, but the last 5 years have demonstrated that accountants are finally fed up enough that they’re done and walking out. Data shows us that accountants are breaking up with the profession at alarming rates, and yet employers are more focused on finding their next accountant than fixing the problems that are being perpetuated across the industry so that they can actually keep an accountant.
Without knowing where accountants are going and why they are leaving employers can’t make an effective plan to help keep accountants in the profession. Simply hiring another accountant into the role that your previous accountant left without trying to fix the job duties, expectations for the role, and company culture likely won’t yield any better results. To convince accountants to stay in the industry, we need to first know what they are running to instead of staying in accounting.
Where are Accountants Going?
According to the Society for Human Resource Management today’s shortage of accountants is largely due to experienced accountants leaving their roles for jobs in finance and technology. The tech sector has a strong pull among not only early and mid-career accountants, but also High School and College students trying to make career decisions. Instead of going into accounting at the same rate that they were 25 years ago, undergraduates are overwhelmingly going into tech because the pay is better and the perception around the industry is more positive. This isn’t a new trend by any means though. Losing accounting and finance professionals to the tech sector has been an ongoing trend since the 90’s.
In talking about accounting career shifts Mark Maurer, a Wall Street Journal reporter, offers additional insight by saying, “Former accountants have largely moved to nonaccounting roles in finance, as well as working as financial analysts or in business operations, human resources and banking.” These adjacent fields join the list alongside things like consulting, risk management, supply chain, and economics as possible draws for accountants looking to leave the profession.
What do Accountants Want?
Now that we know where they’re going, what does that tell us about their motivations – what are they hoping to gain by leaving?
Many of these industries, like tech and finance, boast significantly better pay. As Yvonne Hinson, CEO of the American Accounting Association, explains when talking about the reduction in CPAs,
We're hearing that employees are leaving public accounting firms for two main reasons: the lower pay in public accounting for those just graduating and work/life balance. The firms have increased pay recently, and that is helping some. However, starting pay is still not up to the amount many graduates in other areas of business are receiving after four years of college.
But is that really the only impetus behind making a career change? While the average salary in accounting last year was approximately $72,000 compared to $91,000 in tech, this is hardly the only driving force behind the kind of career shift we are seeing these days because even as accounting salaries have climbed, the number of accounting professionals has continued to drop. Sure, accountants want better pay like anyone else, but they are also expressing a clear demand for other things as well – less busy work, a better work-life balance, additional responsibility, and increased respect for the value that they bring to the organization.
Whether it’s tech, finance, BizOps, consulting, or any other career choice, accountants aren’t afraid of hard work, but they want to be rewarded for the work they put in and share in the success that results. So, whether the accounting pipeline issue ultimately gets resolved by lowering education requirements to sit for the CPA exam or improving the perceptions around accounting among young people, employers need to better support accounting staff to keep the accountants they already have in the industry.
How can we Convince them to Stay?
What are some practical ways that organizations can support accountants to increase retention?
When you need an accounting partner, let us help! We offer bookkeeping and accounting services to companies that want a reputable domestic provider to come alongside their accounting staff and get the job done! Whether you are looking to offload bookkeeping tasks or support the high-level accounting work your team is doing, we have the right solution! We can provide as much or as little help as you need in the office or remotely to help your accountants feel supported. Contact us to find out more today!