How Are Firms Handling the Talent Shortage?
The talent shortage in the accounting profession remains an on-going problem for small and large firms, sparking them to create new strategies to help conquer the dilemma, as the dearth doesn’t look to abate anytime soon.
The predicament continues today after a survey in 2015 by the American Institute of CPAs (AICPA) cited “finding qualified staff” or “retaining qualified staff” as the top concern for small accounting firms. The pinch comes as accounting employment and pay is surging, making hiring more difficult.
The latest figures from the US Bureau of Labor Statistics report there were nearly 1.23 million accountants and auditors in 2015, up slightly from about 1.19 million in 2014. The national annual wage for those jobs was $75,280 versus $73,670 during that period.
Simultaneously, a low unemployment rate this year has prompted employers across all sectors to experience a shrinking talent pool, says Kim Gottschalk, senior regional vice president of Accounting Principals. The Jacksonville, FL-based staffing firm recently did a survey showing 377 US companies plan to give employees holiday bonuses averaging $1,081 this year, up from $858 in 2015.
In accounting, where a higher degree of expertise is required, the labor market gets even tighter. Gottschalk says that gives accounting, tax, and auditing professionals greater leverage to demand a higher salary, better benefits, and more authority.
“As a result, we’ve seen a huge uptick in counteroffers in the past six months because companies don’t want to lose their top performers,” she says. “Accounting and tax auditing firms are going to have to work harder to attract and retain talent.”
Citing a new development in his travels, CPA firms are starting to get more creative in the way they bring in talent, says Carl Peterson, vice president of small firms at the AICPA. He works with the association’s Private Companies Practice Section, represented by more than 6,400 CPA firms. Most of those firms are small with one to six on staff. One trend Peterson sees is smaller firms using internships with great success.
“These have always been a recruitment tool for the largest firms, but the practice is really filtering down,” he says. “It helps firms deal better with seasonality issues and gives them a good look at candidates they may want to help develop as potential employees and leaders down the road.” Still, some obstacles keep arising.
Katie Lamkin, national human resources leader at RSM US, says her firm, like other professional services businesses, is experiencing challenges filling positions in specialty areas, such as tax and consulting. Chicago-based RSM is one of the nation’s largest audit, tax, and consulting services firms with some 9,000 employees.
People not working in professional services as long as they used to makes hiring challenging, Lamkin says. She noted a growing number of accounting professionals are now choosing to work in other fields, such as banking or insurance. Others are going to work for clients or perhaps leveraging their skills outside of public accounting.
“Hiring and retaining workers is a top priority for RSM because we rely on our people to build continuity and brand awareness with clients,” Lamkin says. “While our teams work hard to cross-train one another, if one person leaves a team, it can possibly impact our firm’s relationship with a client or put stress on the rest of the team left to fill that void.”
To proactively address talent and retention issues, RSM is implementing many new strategies. One is applying a career development framework for all levels, lines of business, service lines, specialties, and industries. Among other things, Lamkin says this provides employees with an understanding of what success looks like in their current role and how to progress in their careers.
At Piehl, Hanson, Beckman PA in Hutchinson, MN, the 20-person firm has felt the pain of hiring staff, says founding partner Steve Hanson, CPA, a past president of the National Society of Accountants. His firm is currently trying to hire more accounting and income tax professionals, but like many others, finds the pool of candidates to be very limited.
“It appears that most of the recent accounting graduates, and a good share of those graduating in the spring of 2017, already have jobs secured and the pool of those looking to change locations or firms is almost nonexistent,” says Hanson, adding that most firms in his area are facing similar challenges. Hanson’s firm is also very concerned about its ability to hire good personnel, and the cost to do is rising.
“This will tend to have a ripple effect by paying new, presumably inexperienced professionals more, and we will need to increase the salaries of our current staff,” he added. And that perhaps means increasing client fees to cover the higher expenses.
The firm typically has had its best success hiring and training people right out of college with a four-year accounting degree intending to sit for the CPA exam. But now Hanson says the firm is looking at hiring two-year accounting graduates, with the hope that it can provide additional training to help complete the work at hand.
For Bailey & Thompson Tax & Accounting in Little Rock, AR, finding and hiring talented staff, as well as retaining good-quality staff, has not been easy, says partner Brian Thompson, CPA. The firm has two partners, six accountants, a payroll clerk, and four support staff. Its accountants work with clients one-on-one, making it important to find people well-rounded in accounting, bookkeeping, personal, and business taxes.
“Locating a person who meets these standards, plus who is willing to accept a salary within our budget, has certainly been challenging,” Thompson says.
A vice president of the National Society of Accountants, Thompson says the firm has done a fair job of retaining staff by not requiring them to work excessive hours. He added that staff who choose a more normal schedule are paid less than those who work longer hours, but it seems to be a sacrifice that they are more than willing to make.
“The effect on our business has been to hire a few more qualified people and then work really hard to retain someone that is talented, even if it means paying them a little more or allowing them to work less,” he says.
Jeffrey McKinney is a long-time freelance business writer and reporter, contributing to Black Enterprise magazine for several years on broad range of business and financial topics.