The accounting profession is facing a severe talent shortage that is expected to worsen in the coming years.
The number of U.S. accounting graduates with either a bachelor’s or master’s degree dropped by a staggering 7.4% from 2021 to 2022, marking the largest decline since 1994–1995. This shrinking talent pool, coupled with the impending retirement of many Generation X professionals, has created an urgent need to address this gap.
And the impact of this shortage is not just a concern confined to the accounting department; it has far-reaching implications for businesses, potentially affecting their ability to access additional capital and maintain stakeholder confidence.
Reasons for the growing accounting talent shortage
-
Fewer college students choosing accounting programs
Entry-level salaries for accounting jobs are generally lower than those in fields like technology, investment banking, and other business areas.
Another contributing factor is the extensive requirements for becoming a Certified Public Accountant (CPA). In the United States, CPA candidates must complete 150 credit hours of education, which typically requires a master’s degree or additional college credits beyond a bachelor’s degree.
“Right now, students are confronted with this question: ‘Do I want to jump through all these hoops and spend a lot of money to get a job that pays less than my peers who are also working in the business world?,” says Mark Maurer, a reporter for the Wall Street Journal’s CFO Journal team who has covered the accounting talent shortage extensively. “They’re doing the math and it’s not always adding up,” he says.
In response to the worsening talent shortage, national accounting groups like the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) have even proposed alternative paths to CPA certification. -
Finance teams experiencing burnout
The accounting talent crunch is not just limited to attracting new graduates; experienced accountants well into their careers are also grappling with frustrations and considering career changes.
Many voice concerns about low salaries that fail to compensate them adequately for their skills and experience. The work itself is often described as mundane, involving long hours and repetitive tasks that can lead to burnout over time. - Uncertainty around AI
The looming threat of technology, particularly advancements like generative AI, also has some accountants questioning the long-term viability of their chosen profession. There is uncertainty about what the job will look like in the next 5 to 15 years and whether their skills will remain relevant.
“While companies see technology as an opportunity to arm accountants with new skills, there are some accountants who are more concerned that there could be a risk to their job security,” says Mark. “Are they safe doing their job long-term?”
How the accounting talent shortage hurts businesses
The accounting talent shortage is having a significant impact on companies of all sizes. As businesses struggle to fill essential finance and accounting roles, this leads to delays in critical tasks such as financial reporting, tax filings, and audits, which can result in increased scrutiny from investors and regulators.
Several major companies such as Advanced Auto Parts and Tupperware Brands have cited insufficient accounting personnel as a reason for material weaknesses in their internal controls and financial reporting processes.
Strategies for attracting and retaining finance talent
To combat these very real consequences resulting from the talent shortage, companies need to play an active part in slowing the exodus of accountants from the field.
- Investing in upskilling your people
One key approach to addressing the exit of key finance talent is investing in upskilling your existing team and expanding training programs to modernize the role of accountants.
By equipping employees with new skills, particularly in technology and data analytics, organizations can enhance the strategic and value-adding aspects of accounting roles, making the profession more appealing to both current and prospective employees.
- Using technology to automate mundane tasks and improve work-life balance
By leveraging automation and AI, in-house finance teams can spend less time on data entry, reconciliations, and other repetitive tasks, and more time on analysis, forecasting, and providing insights to support business decision-making.
This shift towards more strategic work can help retain and attract finance talent, as employees can more clearly see the impact of their role on business outcomes, creating a greater sense of fulfillment.
Work-life balance is another crucial consideration. The demanding nature of accounting work, particularly during peak periods, can lead to burnout and disillusionment. By automating tedious work that so often contributes to those long hours, however, finance teams can maintain a more realistic schedule.
- Enhancing compensation offerings
Improving compensation is the most important lever for addressing the growing talent gap, Mark says. Competitive salaries and benefits are crucial for the accounting profession to remain attractive, as the pay disparity with other industries has driven many potential candidates away.
Many organizations are actively boosting salaries, not only for new hires but also for existing employees, to incentivize retention and acknowledge the acquisition of new skills.
The future of accounting talent
Addressing the accounting talent shortage isn’t just a matter of maintaining financial operations—it’s crucial for ensuring the integrity of financial reporting, safeguarding investor confidence, and enabling businesses to make informed decisions.
Introducing software like Vena to automate processes such financial consolidation and financial close management can help finance teams reduce manual tasks that lead to burnout and unlock capacity for more strategic work.
