Get a load of this article Reuters published today:
A short excerpt:
U.S. accounting firms including RSM US, Moss Adams, Bain Capital-backed Sikich and Apax Partners-backed CohnReznick are expanding their operations in India to tackle an acute shortage of accountants at home.
“This could be the breakthrough moment for public accounting firms in India,” Balaji Iyer, managing partner at Moss Adams India, told Reuters. “Right now, the U.S. is facing a significant and growing shortage of certified public accountants, a trend that will only intensify in the coming years.”
Do you know why the US is facing a significant shortage of CPAs? Because firms kept starting salaries low for so long by the time anyone was willing to nudge them up it was too little too late. And do you know why it is going to intensify in coming years? Because firms are slashing US staff and replacing them with offshore talent.
How convenient that the solution to this problem, as stated by this Reuters piece, is hiring people in India who work for a fraction of US wages. Funny that.
Waiting for that one anonymous poster on here to say it’s because millennials and gen z are lazy and entitled.
I have my popcorn ready sir/madam/other.
The issue is that this a “half truth”. Yes it’s hard to find and hire qualified candidates. BUT it’s hard to find qualified candidates because the profession isn’t nearly as attractive as it used to be. Just 10 years ago you could justify the low pay and long hours at the entry level position with the experience and career advancement opportunities. Today the experience at entry level is that you are shipping testing to India without learning how to actually do the job. And the career advancement opportunities are being slashed by PE firms who expect senior managers and directors to be content with being a career senior manager or director without giving them a stake in the firm.
Not to mention, while the Big 4 have mandatory retirement age, many other firms do not, and many boomers are hanging around. When they do retire, they expect a hefty payout (which they often have the deciding vote on) which is limiting the pay potential to the new partners… or forcing them into private equity to get the cash needed.
I’ve heard firms say “this frees up our younger staff to work on higher level stuff, which is what they want to do”. I agree no one wants to do grunt work… but that grunt work is how you learn to do the higher level work. You can’t advise on tax planning opportunities if you have never filled out a tax return. We are developing a generation of seniors and managers who have no idea how to actually do the work required.
Outsourcing work to India will not change unless the quality of work in the United States far outweighs the quality of service in India.
The shortage is a feature of the 150 hour requirement, not a bug for just this purpose. Expecting all firms to increase entry level pay to compensate grads for the extra year in spite of the fact that there is no commensurate increase in value is expecting irrational behavior. The blame for this needs to be laid directly at the feet of the Big 4 and their wholly owned subsidiary, the AICPA.