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Seniors and Up Are Hard to Find Because Associate Grunt Work Has Been Automated?

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Yet another article about the accountant shortage has been published and we’ll spare you the bit about mass boomer retirements, declining accounting enrollments, and scary AICPA figures because it gets repeated in every single one of these articles. So why mention it at all? Because at the very bottom they get the expert opinion of Gareth James, dean of the Goizueta Business School at Emory University. He suggests that technology is at least partly to blame for the lack of talent further up the ladder.

At first I read this and wondered if I accidentally made decaf this morning because what? If anything technology transformation would ease the shortage because it reduces the busywork tasks, thereby reducing the number of grunts required to do said work. Then I read it again and understood what he’s saying. The pool of trained grunts is smaller because technology does much of the work they used to do, so there are fewer of these people ascending the ladder.

One explanation for the shortage of accountants is technology transformation, James says, meaning that machine learning and other artificial intelligence algorithms have taken on some of the more “menial” tasks in accounting, such as checking transactions on an audit.

“There’s a lot of work that recently graduated students used to do in accounting that was really quite menial,” James says. “You can have a program go through literally millions of transactions in a few seconds looking for patterns that are unusual that might suggest either an error or an intentional transaction that shouldn’t be in there.”

Since some of the more entry-level accounting jobs have been taken over by emerging technologies, firms are having a tougher time finding professionals to fill higher-level positions.

Emerging technologies have had both a “positive and a negative impact on the accounting industry,” James says. “This means there’s an opportunity for some more interesting work for them, but it also means that some of that industry has actually had a hard time finding enough students at the moment.”

Let’s pretend for a moment that low pay and long hours aren’t almost entirely to blame for the shortage. Could he onto something?

4 thoughts on “Seniors and Up Are Hard to Find Because Associate Grunt Work Has Been Automated?

  1. To some degree, yes this makes sense. Pre-tech if I needed 20 associates for X amount of work, and my burn rate to manager was 60%, I still end up with 8 manager level employees. If post-tech I only need 10 for X, but keep the same burn rate I cut my manager pool in half to 4, so at a certain level it can create a shortage if I actually need to keep lets say a minimum of 6 managers to handle the work that the tech can’t do.

    This would lead someone though to ask “ok, you added technology to make the grunt work easier/more automated, so why has your burn rate not gone down?” which leads you right back to the issues discussed ad nauseum of low pay, high hours, etc. Technology is part of the issue, but its really just highlighting an old business model’s unwillingness to change/adapt to current times.

  2. He’s dead on, especially for tax. So much of being an associate is just learning the tax forms, schedules, and your firm’s software. It’s a lot of rote memorization that can’t be circumvented. Programs like sureprep that skip over that are creating weak experienced staff and seniors who take longer to advance and really understand what is going on. Programs like sureprep claim that you can elevate your preparers to first reviewers, but new preparers know nothing. I don’t care how many tax classes you take, there is no substitute for actually working in the tax department for a public accounting firm. Taking away the grind only hurts staff in the long run.

    1. Could not agree more! Prepping forms, although menial, is how you learn. If you know nothing you are not capable of effectively reviewing a form (or state tax return or anything for that matter). I was a director at a big 4 firm when technology was shoved down our throats as a way of cutting menial work and quickly saw how this was about to play out. Sure enough…now I am a client of said firm and the team we have assigned to our account lacks the knowledge and analytical abilities said team would have had they learned the old fashioned way. Sad really that the firms were so short sighted.

  3. I think we are also send a lot of the “grunt” work to India to fill the gap and we aren’t hiring as many new associates (partly because competition for US talent is so high and the talent pool smaller). I am not convinced that the India stop gap really works for all engagement types, but have been told that it is necessary and only going to grow in the future.

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