The bloody battle over top accounting talent is nothing new. Firms have been dedicating countless hours in meetings over store-bought crudités on the subject of attracting and retaining top talent for years. But a recent Wall Street Journal article about the difficulty private companies are having filling positions for experienced hires got us wondering: just how bad is it out there, anyway? In attempting to answer that question, we learned a few things: a large number of people are staying in public accounting for longer terms, and accounting degrees are more in demand in the workforce than ever.
Get your accounting majors! Get your accounting majors here!
The Bureau of Labor Statistics projects 11% growth in the accounting and auditing sector between 2014 and 2024, with 142,400 projected new jobs over the same period. And the most recent data available from the AICPA in their 2015 Trends in the Supply of Accounting Graduates and Demand for Public Accounting Recruits report tells us that enrollments in undergrad and graduate accounting programs increased in the 2013-14 academic year. Additionally, accounting firms hired a record number of accounting graduates in 2014, representing a seven percent increase from the previous survey. 91% of firms responding to the survey said they plan to hire at the same or higher rate for the following year. Meaning business is booming, you guys, and they need bodies to fill those chairs.
Master’s enrollment is particularly strong. Enrollments in the 2013-14 academic year saw a nearly four-fold increase over enrollments in such programs 20 years ago. Seems that 150-hour rule is working out great for purveyors of fine accounting education.
The CPA exam gap
Despite this explosive growth, concerns abound. A big one that keeps AICPA CEO, President, and hobby herpetologist Barry Melancon up at night is the CPA exam gap: the difference between those who graduated with accounting degrees and those who go on to sit for and pass the CPA exam. The leading accounting biker gang in the world is concerned they aren’t recruiting enough junior spreadsheet gangbangers to support the demand for CPAs. “We’ve been looking into this issue in great detail and are considering a number of profession-wide initiatives to complement our existing programs and ensure that qualified accounting graduates are earning their CPA license,” he said in 2015 when the most recent Trends report was released.
We find ourselves on the precipice of a potentially apocalyptic fan-meet-feces situation here: Too many jobs, not enough accountants to do them. Add in a mass retirement of Baby Boomers who stuck around far past their prime and a shortage of PhDs to teach accounting at the university level and what do you get? Popcorn. Popcorn is what you get. Just sit back and watch firms start handing out iPads and vacation days to new hires like Oprah gifting cars to her audience.
“If employers continue to struggle to find qualified accountants in the coming years, it will have real impacts on the health of the American economy,” said Steve Gunderson, president and CEO of Career Education Colleges and Universities (CECU) in 2016. Ya think? Accountants are the invisible machine keeping America’s economy afloat, kind of like how flowers just sit around being pretty and make bees do all the pollinating work. You guys are the bees, there are no pretty flowers without your hard work.
What say you?
Because the Going Concern faithful are such a reliable source on the pulse of the accounting profession, we surveyed them a few weeks back to get an idea whether or not things really are changing. If firms and private industry are that desperate for top talent, it means you guys are the ones holding all the chips. And, consequently, firms are going to have to step up their game past foosball tables and jeans every day if they want to keep you around.
We asked our survey respondents which year they received their most recent accounting degree and I don’t know about you but I was a bit surprised that we have readers who graduated way before I was even born. So while they go all the way back to 1973, the majority of survey respondents graduated this century.
99.07% of survey respondents have worked for an accounting firm, and of those, only 3.6% stayed in public accounting for 16 years or longer. The majority — nearly 40% — spent 1-3 years in public and 31% put in 4-6 years. The number one reason for leaving public accounting won’t surprise any of you: Those who jumped ship did so in search of better quality of life. The second most popular reason for leaving: higher salary.
Anyone interested in filling open accounting positions would be wise to offer A) money and B) a quality of life superior to that in public accounting. This isn’t hard, people.
If accounting firms would like to retain talent, it is our humble opinion that they would be wise to listen to what their loyal little bees are trying to tell them here: accounting professionals aren’t satisfied with the personal toll the job takes on their lives, though they may be willing to accept it if more money is involved.
From offering unlimited vacations their associates will never be able to take, to flex time under that same category to generous parental leave policies, firms are stepping up their game to recruit and keep top talent, we all know that. We know it because firms spend an awful lot of time talking about it, because in this if a tree falls in the forest… scenario, unlimited vacations no one actually takes are only as valuable as the sound they make when a recruiter talks them up.
Of the numerous Big 4 perks, paid maternity — or rather, parental — leave is also a big one. EY just upped theirs from 12 to 16 weeks last year, while KPMG offers 18 weeks to primary caregivers. Both firms also support adoption and surrogacy, with KPMG, in particular, reimbursing those expenses up to $10,000. Not quite ready to have kids? No worries, EY will cover up to $25,000 to put your gametes on ice until you’re in a better place to start popping out kiddos. “These new benefits will not only continue to attract and retain the best talent, but help us to deliver exceptional client service, while also encouraging our people to live fulfilling lives,” said Carolyn Slaski, EY Americas Vice Chair of Talent. That’s easily the creepiest thing I’ve ever heard from an accounting firm.
Senior accountants and managers at the three-to-five-year mark are particularly in demand, PwC Diversity Strategy Leader Jennifer Allyn told Monster because “that’s when you become marketable, because we’ve given you training.” In fact, PwC has seen turnover in audit and compliance drop to 20% from 26% in 2014 for staff at the three-to-five-year mark. What this means is fewer accountants are seeking greener grass in industry, non-profit, or government after they’ve put in their time in public. Also notable, PwC brought on nearly as many experienced hires in FY 2016 (26,430) as they did graduates (26,780). So not only is the firm trying hard to retain talent they’ve put time and effort into, they’re snatching experienced hires trained on someone else’s dime.
Whether it’s foosball tables or a special program that ships milk back home for breastfeeding mothers on work trips, whatever the firms are doing seems to be working to keep talent past the two year mark.
We’re working on it
Not everyone is overly concerned with the potential shortage of qualified talent being felt by corporate accounting departments. “Top talent in accounting and auditing is always at a premium. We know this, and remain focused on both retaining our super talented pool of inspectors, and searching for those who would be a good fit for our mission-oriented, driven team,” said David DeBardelaben, Senior Manager, PCAOB Strategic Recruitment.
Gordon Krater, Managing Partner at Plante Moran, tells us that his firm is so hungry for top talent they, like other firms, are going into high schools to encourage students to consider the accounting track. It seems the big push for STEM has had an unintended consequence — steering candidates away from business and accounting fields into science and tech. Which again means better bargaining chips for those who can potentially fill in-demand positions.
The WSJ article on desperate corporate accounting departments quoted Ralph Lauren’s controller as saying his company is paying out an annual salary of up to $250,000 to technical accountants on their small team, so if it’s more money that experienced hires want, it’s certainly out there. Don’t get too excited; nationally, senior accountants in corporate positions are pulling in an average of $65,000. We imagine if firms can throw money at the problem and put salaries over foosball, they should be able to continue to keep attrition rates down-ish.
So what do we make of all this? A recent survey by recruiting software company iCIMS Inc. says a whopping 81.3% of employers are looking to hire graduates with business/accounting degrees. That means competition for accounting grads remains fierce, despite record numbers of them graduating year-over-year. Additionally, more and more professionals are choosing to stay in public up to and even beyond the three-to-five-year mark, putting extra pressure on industry accounting departments, which up until now relied on their unhappiness to serve as a pipeline straight into corporate’s loving embrace. Perhaps some of these industry types are overreacting when they run to the
Perhaps some of these industry types are overreacting when they run to the Wall Street Journal to cry that it took them six months to fill an open position, but it’s clear supply is not meeting demand at all levels. If I were a high school student right now with a deep desire to feel needed and never run out of job prospects, I’d be seriously considering a career in accounting right now.