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AICPA Survey: Firms Facing Stiffer Competition for New Hires, Paying More for Top Talent

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Sep 1st 2017
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Firms are facing increased competition for talent and are willing to pay more for the top candidates, in an environment in which CPAs and executives' outlook on the U.S. economy and business activity in the third quarter were at their highest in almost three years, according to the latest summary by the American Institute of CPAs (AICPA).

The availability of skilled personnel now ranks as the top concern overall for the first time, based on the AICPA Business and Industry Economic Outlook Survey. Regulatory issues returned to the second slot. Both have been among the top four business challenges since the same period last year.

The majority (75 percent) of respondents indicated that they were seeing some increased competition in recruiting, while less than a quarter (21 percent) reported a significant increase.

At the fourth quarter of 2014, the last time this survey question was asked, only 16 percent replied they were experiencing a significant increase in hiring competition.

More than half (52 percent) of executives said their firms had to settle for less than the ideal job candidate, while one in five had lost out on hiring top candidates.

While about a third (34 percent) said they are offering higher salaries to attract top candidates, 40 percent are promoting from within their firms.

“One out of five business executives say their company has lost out on top job candidates because of increased competition, and a majority say they’re having trouble finding the right candidate to begin with,” said Arleen R. Thomas, managing director of Americas and Global Offerings at the AICPA. “For some companies, the scarcity of skilled workers could have an impact on productivity and growth over time.”

U.S. economic and organizational optimism led year-on-year increases among nine economic categories in the AICPA survey. Over the next 12 months, respondents also grew optimistic on their businesses’ expansion plans, revenue, profits, employment, IT spending, other capital spending, and training and development. Six of the nine categories rose slightly from the second quarter of this year, while three — U.S. optimism, expansion plans and employment — were unchanged from the second quarter.

The aggregate measure, the CPA Outlook Index, rose to 77 in the third quarter from 69 a year earlier. The CPAOI hasn’t been this high since the fourth quarter of 2014, when it was at 78.

Here’s a closer look at the findings:

  • Information technology leads in the planned-spending category for the next 12 months. IT and other capital spending rates are the highest since the Great Recession.
  • Research and development spending also rose to a post-recession high.
  • Executives whose firms are in the $100 million to $1 billion category are the least hesitant to hire more staff.
  • Firms in the Midwest have the highest level of optimism from the regional perspective.

Besides the availability of skilled personnel and regulatory issues, the top challenges facing executives include domestic competition, domestic economic conditions, employee and benefit costs; development of new services, products and markets; stagnant or declining markets, changing customer preferences, domestic political leadership and staff turnover.

Conducted in early to mid-August, the survey polled 775 chief executive officers, presidents, chief financial officers, controllers and other certified public accountants and executives in U.S. companies who held senior management accounting roles. The AICPA reported that 71 percent of respondents came from privately owned entities, 14% from publicly listed companies, and 13% from not-for-profits.

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