How technology and training aid accounting staffing challenges

Accounting firms turn to a three-tiered approach to uncover opportunities

Accounting firms are severely impacted by the dynamic post-pandemic economy. Firms are faced with the external challenges of meeting new client demands, increasing compliance pressures, and tax law changes. They are also experiencing an internal struggle to cope with the decreasing talent pool and growing need to use technology to stay efficient.

While the fundamentals of accounting remain the same, the processes and skill sets required to execute them are changing. Today the primary focus of firms lies in four priorities: efficiency, client service, growth, and talent. The order of these priorities can vary depending on the size of the firm. While the solutions are the same, the size of your firm can impact the rate at which you adopt these solutions in your strategy.

Adjusting to a shrinking accounting talent pool

Accounting and audit firms, including the SEC, find talent pipelines shrinking on both sides. Senior and management-level professionals are opting for earlier retirement or seeking alternative employment in other industries with fewer hours and restrictions on working locations. Entry-level roles are difficult to fill due to a decrease in the number of graduating CPAs or are losing qualified accounting graduates to careers in other industries that offer higher starting salaries and more flexible working options to support the demand for improved work/life balance. In the middle, 47% of firms reported they are expecting difficulty retaining existing employees in 2023.

To meet the shortfall, the industry is looking to streamline accounting staffing requirements by deploying more tools, technology, and training to offset the need for accounting credentials and to tap into talent pools that are not accounting-based but can support the focus on client services and work with data to improve efficiencies.

The U.S. Bureau of Labor Statistics projects the employment of accountants and auditors to grow 6% from 2021 to 2023, with the average number of annual openings around 136,400. According to Revelio Labs Inc., more than 177,000 accounting and audit roles were posted in November of 2022. While the need for new entrants into the accounting profession increases, the decreasing talent pool is causing firms to rethink their strategies around recruiting and diversifying new hires.

The AICPA 2021 Trends Report found the expectations of firms, who had hired new accountants in 2020, to have more hires on staff from 2021 to 2022 between new bachelor and master’s of accounting and non-accounting business graduates as:

Interested candidates will find the opportunities vary depending on the size of the firm. Larger firms expect to face challenges filling high-level positions, whereas smaller and mid-sized firms are looking for more junior hires.

Changing priorities when hiring accounting staff

As you broaden the scope of services offered to meet client needs, primarily in business advisory services, and help clients address increasingly complex tax law changes and compliance measures, the skillset and competencies required are changing. Clients are still looking for tax strategy services, but they are also looking for business consulting, financial planning, decision-making, and HR/organizational support. With high-profile accounting scandals appearing more frequently in the news, the impetus for accounting professionals to be hyper-vigilant creates concerns regarding overworked, under-experienced staff. Extra care is required to ensure staff are up to date and attentive.

Hiring has some stiff competition with other industries offering improved work/life balance, higher starting salaries, remote work, and growth opportunities. The post-pandemic world has elevated the expectation that with technology, more work should and can be done, and at times that are more conducive to staff’s schedules in both junior and senior ranks.

While the industry is seeing an increasing trend toward financial incentives such as increased pay and signing bonuses. For example, KPMG announced $160 million was being allocated to increasing salaries to retain its workforce. For many firms, a more economical solution lies in improving the processes and workflow through automation.

Technology is stepping up to address several of the issues. New accounting tools are being leveraged to automate and even replace the tasks typically performed by entry-level roles. Our 2023 Tax Professionals Report cited that “one-third (33%) of firms automate up to 25% of their tax workflows, about one-quarter automate between 26% and 50% of their tax workflows, and almost another one-third (29%) automate more than half of all of their workflows. The exception is large firms, of which half (51%) say they only automate 25% or less of their operations, resulting in a lower overall rate of automation.”

How can you use technology to address accounting staffing challenges?

Firms of all sizes are turning to tools and technology solutions to help automate their workflows freeing up human resources to upskill, retrain, and develop. You simply have to find ways to do more with less. With the tools, technology, and training strategy, you can address several issues.

1. Cloud-based platforms remove geographical limitations for engaging talent and clients.
2. Streamlined processes improve performance, accuracy, and speed.
3. Increased automation results in more time available to focus on value-add services.
4. Skill gaps are addressed through training or automation.
5. Improved client services are possible at a fraction of the cost.

Growth-oriented firms can embrace tools, technology, and training to achieve their growth objectives. Offering flexible work arrangements has become an expectation of modern job seekers that can easily be accommodated through cloud-based platforms and diversifying the scope of talent that can fulfill changing roles.

Training takes center stage for smaller firms that do not have the resources to invest in technology and larger ones that need to upskill their existing teams. Firms are adopting and incorporating new training practices at all levels. New initiatives are supported by programs like the CPA Evolution initiative, a joint project with the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA), looking to upgrade the CPA licensure to incorporate the changing skillset required for the practice of accounting. Hiring junior talent has started earlier, offering on-the-job training to interns, even those still in high school, in favor of capturing talent with the right attitude and transferable skills and securing a steady supply of new hires. Growth-focused firms prioritize training to expand competencies that attract new clients, offer more value-added services to existing clients and contribute to fee growth.

Using accounting staffing challenges to create change

Overcoming accounting staffing challenges and meeting the priorities of efficiency, client service, growth, and talent is possible through a strategy that incorporates tools, technology, and training. Attracting younger talent is possible by leveraging cloud-based tools that permit more remote and flexible working arrangements. Automating more technical processes frees up resources for improved client service and the ability to offer more business advisory services. And training helps attract new hires, upskill existing talent, and improve efficiencies with tools and technology at a lower cost than hiring more people at higher rates of pay.

Firms of all sizes, thriving in a post-pandemic world can take the tools, technology, and training strategy and scale it to the size and scope of their budget, operations, and goals. By expanding the skillset required, embracing on-the-job training, offering flexible work arrangements through cloud-based tools, and diversifying the talent pool you are drawing from, your firm will find more opportunities.

To learn more, download the Thomson Reuters white paper, 4 ways accounting firms can appeal to new professionals.