A recent article in CPA Journal says the United States is facing “an acute” shortage of certified public accountants with many leaving their jobs “in unprecedented numbers” in corporations and audit firms.
In fact, the 2022 Rosenberg Survey reported that professional staff turnover in the industry is at 19%, up from 15% the previous year, and the number of college students earning undergraduate degrees in accounting fell 9%, from 57,500 in 2012 to 52,500 in 2020, according to the Association of International Certified Professional Accountants. And it’s dropped 4% more since the start of the COVID-19 pandemic.
All of this comes in the midst of what has been dubbed as “The Great Resignation,” in which millions of Americans, toward the end of the pandemic, left their jobs. Experts in the accounting field worry that a drought of accounting and certified accounting talent is coming.
“There has definitely been a decrease in what we refer to as the pipeline,” says Jeannine Birmingham, CPA and president and CEO of the Alabama Society of Certified Public Accountants. “But the reality is that every industry is facing a reduction of pipeline. Everybody, no matter where you are, is looking for different skill sets or skill sets of higher levels, and the pipeline is not what it once was.”
And the crisis may be getting worse. The Controllers Council reports that “Almost 75% of the CPA workforce met the retirement age in 2020, as estimated by AICPA.”
At the same time, the demand for accountants is rising. And without adequate staff, a September/October 2022 CPA Journal article says, it could, for example, make it tougher for companies when it is time for financial reporting for the Securities and Exchange Commission.
The U.S. Bureau of Labor Statistics estimates that employment of accountants and auditors will grow 6% — a rate similar to most professions — from 2021 to 2031. Moreover, the bureau predicts 136,400 job openings for accountants and auditors annually, on average, over the decade.
Meanwhile, the Alabama Department of Labor lists accountants and auditors as one of the top in-demand jobs in the state with about 625 openings a year and an average salary of about $68,761. The U.S. Bureau of Labor Statistics lists the annual mean wage for accountants in Alabama at $72,200 as of May 2021.
Experts say one reason for the decline may be burnout. CPAs often work long hours during tax season, but the PPP loans that the U.S. government made available at the height of the COVID-19 pandemic added to the already heavy workload for many CPAs.
“We didn’t slow down. We sped up because we had all the information that clients needed for the PPP loans,” says Angela Hamiter, a CPA and shareholder at JamisonMoneyFarmer (JMF) PC in Tuscaloosa. “We were very involved in helping clients, which was a great thing, but there was a two-year span where you didn’t feel like you ever had time off, and I think it really burned CPAs out.”
Another problem is the nationwide drop in the number of people taking the CPA exam, a rigorous test candidates must pass for a license to practice public accounting.
A recent article published by the Controllers Council reports that nationally, the number of CPA exam candidates dropped from nearly 50,000 in 2010 to just over 32,000 in 2021.
In Alabama, however, the number of first-time CPA exam candidates went from 897 in 2011 to 690 in 2015, but reached 1,165 in 2021.
It’s not an easy path. Accounting students must take a fifth year of college classes just to qualify to take the exam. And CPAs can go into other areas like corporate banking, become a financial analyst or join the FBI rather than join an accounting firm.
Amanda Barksdale, a senior lecturer in accounting at the University of North Alabama, however, says that enrollment in accounting has held relatively steady.
“Our department tracks enrollment numbers, and we have not seen significant changes in our accounting enrollment,” Barksdale says.
“The CPA certification is still a popular option for our accounting majors,” she says.
“Each semester, we have numerous firms and businesses come to campus to meet and interact with our students,” says Barksdale. “Many of our students accept internship offers while they’re completing their undergraduate degree.”
But still, Hamiter says finding accounting talent straight out of college is more challenging these days.
“We’re in Tuscaloosa so we’re at the back door of the University of Alabama,” she says. “We never had a problem. We just recruited from our interns.”
But over the last two to three years, the pool of candidates has grown smaller, Hamiter says.
“We’ve had to go to different schools. That’s one thing we’ve changed. We’ve gone to Auburn, Troy, Samford, Birmingham-Southern and spread our wings a little more in different places. And that’s good,” she says.
Bur even hiring experienced accountants is more difficult now, Hamiter says.
“We’ve used headhunters for the first time in my career here in the last two years,” she says. “We’ve hired two or three recently through that process.”
Recently, CPA Meg Hampton, an audit manager at Anglin Reichmann Armstrong in Huntsville, wrote an article for Accounting Today magazine on the accounting talent crisis. “Top talent can choose careers that allow them to work from anywhere and at any time (e.g. digital nomads). The accounting industry cannot ignore that reality,” she wrote.
She says that accounting firms should consider looking at the talent they currently have on hand and helping those employees gain new skills and expand their knowledge base instead of focusing entirely on hiring.
For instance, if a young accountant has specialized knowledge of a particular field or industry, they can ask managers how they can use that knowledge to help bring in new clients for the firm. And managers can offer opportunities for cross-training and allow employees to shadow their more experienced colleagues.
In addition, Hampton says firms should consider moving beyond traditional hires to hiring experts in-house who can give accountants a better understanding of niche industries.
“Accounting firms have traditionally been more focused on compliance like tax returns, audits and financial statements,” says Hampton. “But more and more, we’re seeing our clients’ needs in more consulting areas, advisory. So having knowledge of the industry, or of the clients or systems that they use, those are the kinds of things that are super valuable right now.”
“We’ve done a little bit of this where we’ve hired someone as a consultant, where they don’t have an accounting degree or have an actual accounting job, but they have experience in a relevant industry that we have a niche in,” Hampton says.
Birmingham says, “It will take a renewed effort to educate high school students and maybe even middle school students about the opportunities for careers in accounting, whether that’s a CPA or whether that’s just an accountant.”
But meanwhile, the need for more accountants continues.
“What worries me the most is not having people to take care of these clients that I’ve taken care of for 30-plus years,” Hamiter says. “Clients will pass away, but more are coming along after them, their children, and I hate for there not to be that someone here from our firm to take care of those folks.”
Gail Allyn Short is a Birmingham-based freelance contributor to Business Alabama.
This article appears in the July 2023 issue of Business Alabama.
