Ed. note: if you’re visiting from r/accounting, thanks for actually reading the article. Love ya.
Another day, another article purporting to offer the solution to the precipitous drop in accounting talent over the past several years that doesn’t involve paying people more. “Young people” have been blamed for talent shortages long before an actual shortage existed, what with all their job-hopping and demanding employers accept that they have a life outside of work. Now thanks to this Bloomberg Tax Opinion piece we find out that the problem is not low salaries nor poor work-life balance nor a distinctive lack of ping pong tables at public accounting firms across the United States. No, it’s that the tech isn’t cool enough.
A new crop of talented accountants are demanding independence, flexibility, and the ability to work on their own terms. By championing software-as-a-service products, the profession can give digital natives the freedom to be creative by taking entry-level work off their plates, says Anees Pretorius of Bean.
Every year, business-savvy graduates who excel at mathematics, critical thinking and analysis, join the workforce in droves. So why is our country facing a shortage of accountants?
The answer is simple: Younger workers today want an entrepreneurial career path. They want to abandon outdated technologies and fully embrace new digital tools, stretch the limits of their abilities, and collaborate freely with others who are doing the same.
Look, there’s validity in this view. Accounting’s reputation of boring, repetitive work naturally scares some people away. And if that doesn’t scare them away, the sheer volume of boring, repetitive work will (remember the guy whose internship made him decide accounting wasn’t for him despite majoring in it? “I was a little scared of it, not going to lie,” he told WSJ. “I don’t know if I want to do all that.”) Much of the technology is outdated, though when new stuff gets rolled out it isn’t always to fanfare by the people who have to use it (looking at you, EY Canvas). So to say that the profession needs some fresh tech to take some of the grunt work off people’s plates isn’t wrong, suggesting that a lack of it is why young people are not pursuing accounting is.
Better technology and automation have their place. And it is indeed a big place. Technology may be the only thing that can come close to minimizing accounting’s work-life balance problem. But unless the plan is to update the technology to the point human beings aren’t required to do the work, all the cool tech in the world will not fix the profession’s fundamental problem: LOW. STARTING. SALARIES.
Where are all the new CPAs? pic.twitter.com/cvmbzkw2WG
— Tax TeleGraf (@LoganGrafTax) February 16, 2023
The opinion piece goes on to suggest that what we need to do is foster the spirit of entrepreneurship in young people. And again, that’s a great idea. More and more accountants are striking out on their own, creating awesome little tech-forward shops of their own. That’s great! More of that, please! But it doesn’t fix the thing that is making students say accounting is just not worth it, literally.
Because younger workers are reconsidering the idea of the “partner track,” the industry should roll out the kinds of digital tools that enable any accountant to begin building their own accounting consultancy. This streak of independent thinking and entrepreneurship among younger workers is taking hold whether the industry approves of it or not. Accounting associations and accounting firms would be wise not just to accept this, but to encourage it.
It will become harder over time for any firm to convince younger workers that plodding along the partner track for years—even decades—is the way to reach the pinnacle of the industry. Connected social technologies are allowing any professional to build equity in their own brand, and collaboration tools help them join forces with the brightest and the best, wherever they are. This kind of functionality is a must-have for digital natives, so that’s what it should become for the industry.
Accounting has never been viewed as entrepreneurial, but going forward, it must be. This is the only way to attract the new crop of talented accountants, who increasingly demand independence, flexibility, and the ability to work on their own terms. A SaaS-enabled market network is making this possible, and the network is growing.
By all means, give them the tools they need and then some. That should have been done years ago when thought leaders were paying all that lip service to disruption and making up dumb words like “nimbleocity” (nimble + velocity = nimbleocity. I sincerely hope we left that one back in 2014 where it belongs). You know what else should have done 15 years ago? Raising salaries to make public accounting poised to compete with the industries that are now and have been stealing all the would-be accountants away. If you do not fix that, there is no technology that can turn things around.
A shortage is only a shortage to the extent that employers actually care to solve it. Labor rates are a function of economics just like any other good or service, and the problem with accounting is as it has always been: the job is awful but not awful enough for people to leave the profession in sufficient enough numbers to make employers truly squirm. In other words, a lackluster supply of accountants meets an even greater lackluster demand for them, and what you’re left with is middle-class instead of upper-class earning potential that on an hourly basis is laughably meager. It really is that simple. We all like to believe that our profession adds value, and I as much as I believe that it does, it only matters if the organization that cuts my checks thinks that what I do adds value. The labor shortage and stubborn unwillingness to raise pay in response is a testament to that apathy. This is about transforming perceptions of accountants by their superiors within the broader culture of American business, so good luck with that undertaking. In the meantime, I’m not going to wait for the winds of change to start blowing.
Get rid of the damn billable hour first. Nobody wants to take 5 years of school and pass a 14 hour test to worry about justifying themselves every 6 minutes.
Law firms bill by the hour.
Spot on. We moved our firm’s whole pay schedule to a monthly fee (we offer 3 levels of service). Our clients love it, our staff love it and things run so much smoother! For special projects we provide our clients with a quote. The shift of focus from our time being our only resource of value to that of our team’s talent and expertise has been a game changer.
There are so many articles and think pieces in recent years (by mostly self-loathing accountants) about how there’s this huge talent shortage crisis in the accounting profession. I don’t understand what the crisis is though. Who are the people being hurt by it?
The the actual working accountants are seeing their salaries increase rapidly, receiving more perks, and realizing greater job security. Accounting candidates are finding it easier to get a job upon graduation, and starting salaries are increasing as well.
It seems to me that the the only “losers” here are the non-accounting assholes who are upset that they have to pay more for accountants so that they can close their books, file their tax returns, and issue financial statements. Why should we care about these peoples’ problems? Seriously, if you feel sorry for your local CEO because he has to pay $80k for a senior accountant, that’s a YOU problem. The other “losers” here are the organizations that profit off of there being more accountants, like the AICPA. Maybe if the AICPA wants to increase its membership (i.e. collect more membership dues to pay for their fat cat executives), they should stop trying to devalue the accounting profession with stupid bullshit like the CGMA certification?