The crunch for talent within the accounting profession remains one of the biggest obstacles for accounting firms today.
The number of U.S. students completing a Bachelor’s degree in accounting fell about 8% in the 2019-2020 school year compared with the 2011-2012 period, shrinking to 52,481 graduates from 57,482, according to a 2021 report from the American Institute of Certified Public Accountants.
The reality is, these days fewer people in the United States want to be accountants.
There are very strong candidates in other parts of the world that can fill that labor demand-talent gap, according to Jim Brady, vice chairman of advisory services at alliantgroup, an international tax services provider.
“You just have to tap into talent, wherever you can find it,” Brady said.
India, for example, happens to be a place where there are English speaking professionals that come from the Chartered Accountancy world — the equivalent to a Certified Public Accountant in the U.S. — while Australia, Canada and the U.K. are also known for having world class, chartered accountants, according to Brady.
“It’s a volume play,” said Brady in an interview. “With population growth, and capital formation growth, the demand side for CPAs is just going to keep growing, and I don’t think you are going to have a sudden surge of high school seniors going off to business colleges, and majoring in accounting,” he said.
When Brady graduated from Bryant University on Rhode Island in 1981, he said there was a huge supply of CPAs relative to demand. “As a firm, you could actually have really high turnover, and that wasn’t your number one issue or challenge. Your number one issue was getting clients, people were plentiful,” Brady, a former chief talent officer of Deloitte, said.
Between the baby boomers retiring and fewer in the millennial and Gen Z generations choosing accounting as a career path, the demand for CPAs has skyrocketed.
The explosion of tech startups within the past 15 years has contributed to this shortage as well, said Brady. “These kinds of places provide pretty sexy careers so you have a way more people going into marketing, digital marketing, and finance, and not so much accounting,” he said.
SMEs to suffer the most
Despite the CPA career route not being as popular as it was years ago, and not being as “sexy” as some other now availble jobs in the finance sector, the need for CPAs and high quality audits is not going anywhere, and it is the small and medium sized businesses that will suffer the most, according to Brady.
“Frankly, I think the biggest companies are always going to be able to hire internal control people,” he said.
This supply and demand pinch will be felt further down the food chain, and it’s these firms that should consider the potential for international talent.
“CPAs are the ones that audit the books of brand new startups and you need audited financial statements for the investors. You can’t just rely on the CEO,” said Brady.