Just last week I received a call from a senior manager I used to work with at one of the Big 4 public accounting firms. Tax season had already started, but employees at all levels were giving two-week notices.
Yet another manager had quit that day, and the senior manager who called wanted to know if I would be interested in going back to my old job.
They were severely understaffed.
Add to that the cruel reality that there just aren’t enough qualified accounting professionals in today’s market, and we’ve got ourselves an accountant shortage in the industry.
It’s not ideal for the accounting firms out there, but it’s great news for the accountants.
What’s Causing the Accountant Shortage?
Accounting and finance positions are specialized fields, and it’s not easy to find and retain qualified professionals for these roles. In fact, they’re ranked fifth out of 10 jobs that are hardest to fill in the United States.
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.
As a result, enrollment in accounting programs, which requires a rigorous 150 credits to be CPA-eligible, has decreased over the years. 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 shortage exists at the top too. As younger generations choose different career paths, baby boomers are retiring from the accounting profession, and it’s becoming harder to close the gap.
The demand is there, but there just aren’t enough qualified accounting professionals to fill it.
What This Means for Recent Accounting Graduates
Accounting students are in for a pleasant surprise after they graduate.
The average starting salary for accounting majors in the Class of 2021 is projected to increase more than 10 percent, according to the Winter 2021 Salary Survey by the National Association of Colleges and Employers. That’s an expected salary of $58,508 compared to $52,734 in 2020.
Employment in the accounting industry is also expected to grow 4 percent from 2019 to 2029, according to the Bureau of Labor Statistics, cementing the perception that accounting is a secure and stable occupation.
And if you already have your CPA license, the BLS also reports that you’ll have better job prospects compared to those without. Salaries for CPAs are typically higher than for accountants without their license as well. While this isn’t new information, the number of people sitting for the CPA exams has decreased in recent years, so having this credential is one way to set yourself apart.
There’s good news for those who are still in the process of securing their CPA, as is often the case for recent graduates. Most public accounting firms will reimburse you for the cost of qualifying CPA study materials, many of which cost several thousand dollars. They also usually offer bonuses as an incentive to pass all four parts of the CPA exams.
Entry-level accounting positions are becoming harder to fill, so take comfort in the fact that students graduating with an accounting degree are in high demand.
What This Means for Experienced Accounting Professionals
All companies need accountants, and with noticeable employee turnover in the accounting industry, firms are in desperate need for talent.
Consider submitting referral candidates for those open accounting positions at your firm. Companies often pay out several thousand dollars of referral bonuses for successful recruits, and if your candidate is hired, it’s an easy way to earn cash.
And keep an eye out on raises this year. Despite the accountant shortage, public accounting firms have had record-breaking revenues, and compensation packages are looking good.
(It’s worth noting, though, that this comes after a year of nearly stagnant salaries in 2020 due to the COVID-19 pandemic.)
For those of you who are unhappy or overworked at your current job, it’s a good time to apply for those accountant positions you’ve been eyeing. Take advantage of the current market – you’re likely to find a job with better salary and benefits, or you might find that your current firm comes back with a more competitive offer.
What Can I Expect in the Accounting Job Hunt?
The demand for accountants isn’t expected to slow down anytime soon. Whether you’re looking for an entry-level position or are a seasoned professional, the need for accountants remains at an all-time high. Expect competitive salaries and opportunities for promotions, and know that you have leverage in the current market.
If you’re in the middle of your job search, let me know how it’s going in the comments below.