The “Great Resignation” is getting a lot of attention these days, and deservedly so. The phrase refers to the massive number of American workers – about 4.4 million – who have left the workforce during the COVID-19 pandemic. Workers taking early retirement account for more than half of that total, at about 2.4 million. Few industries have been spared the outmigration, and it’s hard to find a company today that isn’t experiencing a labor shortage.
That includes the public accounting profession. Our profession has been experiencing contraction for several years now, and the number of accountants who sat for the CPA exam last year was the lowest ever, yielding approximately 50,000 new CPAs. Sounds like a lot, but there are about 40,000 accounting practices nationwide, all hungry for new talent, so the crop of new CPAs doesn’t go very far. In addition, college accounting programs are seeing fewer students interested in the field.
The Great Resignation and a Perfect Storm
But the story of the Great Resignation is much bigger than raw numbers, and for the accounting profession, there is something of a perfect storm on the horizon.
First, there is the labor shortage. Like all industries, the accounting profession is seeing a record number of retirements as many Boomer generation partners hang up their eyeshades. Their retirements are generating a growing number of mergers, as smaller firms are acquired by larger firms. This, in turn, results in more turnover as some duplicate employees leave, and they often exit the profession altogether.
At the same time, the public accounting profession has for many years been shifting toward the advisory and consulting services that our clients need. Though we still provide the day-to-day accounting, bookkeeping, tax, audit and compliance services that the profession was traditionally built upon, firms like HW&Co. have added an array of advisory services such as M & A consulting, fraud and forensic, valuation, litigation support, healthcare consulting, cost segregation studies, and estate planning, to name just a few. It’s a complex world out there, and our clients need consulting help to navigate an ever-changing marketplace.
The Role of Technology
And then there’s technology, which seems to factor into every discussion these days, including the Great Resignation. Using rapidly evolving artificial intelligence and machine learning applications, as well as traditional technology, we are able to automate tasks that used to be done by staff accountants and bookkeepers. This helps us leverage the staff that we have and give them more challenging work.
We are constantly introducing new technologies at our firm so our staff can think, do analysis and perform at a higher level. This accelerates their journey to more meaningful, analytical work and shifts their mindset from data entry to data analysis and consulting. Basic data entry is automated now, so when a preparer receives your tax return the numbers are already entered and he or she can focus on analyzing it to see if it’s correct or if there are tax credits you should be getting that aren’t factored in.
This digital transformation enables our firm to provide higher-level analytical and consulting services with fewer employees. So, as the labor shortage in public accounting becomes more acute, we are turning to technology to help us deliver higher-level services more efficiently.
Of course, in public accounting, we have an unusual challenge that many professions don’t have when it comes to attracting and retaining good employees – work/life balance. It’s no secret that public accountants work long hours between January and April. It’s a time of year when corporate tax deadlines, individual tax deadlines and corporate audit deadlines all converge, and the hours can be brutal.
Like many CPA firms, we try to let our staff know how much we appreciate them. We have a “Weekend Away” in February, when the firm shuts down early on a Friday and no one works through the weekend. We even pick up the tab for fun excursions that our employees do that weekend with family or friends. Then there’s “Sundae Monday,” when the partners all put on their aprons and serve ice cream sundaes to the staff.
These may be small efforts, but we hope they show how much we appreciate our staff and recognize their sacrifices and hard work.
As technology solutions and the shift toward more advisory work change the nature of public accounting, we hope and expect that the work/life balance in our profession will become more aligned with what young professionals expect these days.
In public accounting, as in nearly all other industries, the nature and meaning of work is evolving. Keeping up with the change is challenging, but rewarding.