Why It’s A Great Time To Be An Accountant

In case you haven’t already heard, there’s an accountant shortage in the industry.

For one thing, the pipeline for accounting talent is weakening. According to the AICPA’s 2023 Trends Report, enrollment for accounting programs is declining, which means the pool of accounting graduates continues to shrink.

For another, current accountants are leaving their jobs and contributing to a rise in turnover in public accounting firms and public and private companies.

Younger generations are choosing different career paths, current accountants are quitting their jobs, and baby boomers are retiring from the accounting profession. Still the demand for accountants is there; there just aren’t enough qualified accounting professionals to fill it.

What’s Causing the Accountant Shortage?

Whether it’s the lack of new accountants entering the industry or an increase in current accountants leaving it, the accounting profession is running low on talent.

The Shortage of Prospective Accountants

When it comes to prospective accountants, there’s no denying that students are losing interest in accounting as a major.

According to the AICPA, bachelor’s degree completions in accounting dropped 7.8% for the 2021-2022 school year. Master’s degree completions in accounting dropped 6.4% for the 2021-2022 school year. Students are opting for other majors, and young professionals are looking for work-life balance and a sense of purpose that they feel may not be fulfilled in an accounting role.

The accounting profession’s branding issue doesn’t help. Accounting is often considered a stable career path, but rarely is it labeled a “cool” occupation. There’s also the oft-misplaced theory that technology and automation, not humans, is the future of accounting.

The Shortage of Current Accountants

When it comes to current accountants, the increase in turnover is affecting the industry as accountants re-evaluate their priorities.

According to a 2023 Special Feature by the Illinois CPA Society (ICPAS), the top three reasons why accounting professionals resigned were:

  1. Salary
  2. Too many hours and/or burnout
  3. Lack of work-life balance

Respondents of the ICPAS study also showed an intent to leave their employers in at least one year. About 24% of accounting professionals planned to leave within the next year, while about 17% said they planned to leave within six months.

So Why is it a Great Time to be an Accountant?

As the accountant shortage grows, accounting positions become harder to fill. For employers, this means they’re feeling the pressure to address shortcomings in the industry.

Competitive Salary

About 92% of respondents to the ICPAS survey cited salary as the most attractive benefit an employer can provide. Unfortunately, the average annual salaries of accountants and auditors fall behind the salaries of other professionals, such as those in computer science, data science, or engineering.

That’s why employers are looking to close this gap for the accounting industry.

Since COVID, about 64% of employers surveyed by the ICPAS said they increased employee compensation. The median salary for accountants in 2022 was $78,000, according to the Bureau of Labor Statistics. Experienced hires can earn anywhere from $150,000 to upwards of $200,000 a year as they progress up the ladder.

Salary projections are also higher for new graduates. Business graduates are among the highest-paid groups of majors and have the largest projected salary income, according to the NACE Winter 2023 Salary Survey. Among business majors, accounting graduates can expect to see the biggest increase. Average salary projection for accounting majors rose from $59,884 for the Class of 2022 to $62,583 for the Class of 2023, a 4.5% increase.

Employers are aware that competitive compensation attracts good talent and are making efforts to meet employees’ salary expectations across all experience levels.

Better Work-Life Balance

It’s no secret that the accounting profession has a history of burning out its employees. The year 2022 also brought about the “Great Resignation,” which had a lot of people questioning the importance of their work or prioritizing a better work-life balance.

In fact, working too many hours and a lack of work-life balance were two of the most common reasons for why accountants quit their jobs. Nearly 49% of respondents of the ICPAS survey who left their accounting jobs cited too many hours and/or burnout as the reason for quitting. About 48% cited lack of work-life balance as the reason.

To combat excessive hours and burnout, employers are prioritizing flexibility and autonomy among employees. Just over 49% of employers who responded to the survey said they are offering flexible hours. About 60% of employers said they began offering a remote work option.

And while some employers are mandating their employees to return to the office, this is unlikely to affect accountants to the same degree. Accountants ranked first in FlexJob’s annual ranking of top remote jobs in the U.S.

More Assistance for Soon-to-Be CPAs

There’s concern that an accountant shortage may also lead to a CPA shortage.

Accounting programs often require a rigorous 150 credits to be CPA-eligible, and those last 30 credits can be the most difficult. Some would-be CPAs may enroll in a master’s program to complete their requirement, but some may choose not to pursue their CPA license at all.

That’s why firms and universities are coming up with innovative solutions to encourage students to pursue not only an accounting degree, but also their CPA license.

Saint Peter’s University and PwC, for instance, launched the “Work for Credit” program in 2022. This program is geared toward accounting graduates from the university who already have 120 credit hours. These students can earn an additional 30 credits by working a paid, full-time job at PwC. This would give them the 150 hours they need to meet the New Jersey education requirement, while equipping them with real-world experience as entry-level associates at a Big 4 firm.

Optimistic Hiring Expectations

Despite the waning interest in the accounting industry, hiring expectations remain optimistic. About 60% of firms that responded to the AICPA survey said they expect to have the same or higher number of CPAs on staff in 2023 compared to the previous year. About 91% said they expect to hire the same or more new accounting graduates in the next year.

Given the accountant shortage in the industry, firms are in desperate need for talent. Employers are aware that the accounting profession hasn’t always been a leader in employee satisfaction, but they’re making changes to improve employee retention and attract new talent.

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