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Tax Season & Talent Shortage: A Nightmare for CPAs
As CPAs tiptoe towards the upcoming tax season, they face an unprecedented challenge in the form of a crushing accounting talent shortage. With a barrage of client requests flowing in daily during the tax season, CPAs need help balancing client demands and overworked staff. Almost the same time last year, WSJ reported the voluntary retirement of 300,000+ accountants and auditors in the U.S. Sadly, the situation has been further complicated, with the AICPA 2023 trends report revealing that compared to the previous year, 7.8% lesser number of students earned a bachelor’s degree in accounting in the 2021–22 school, year while those earning a master’s degree in accounting slipped 6.4%. The trend is continuing since 2015-2016.
Tax season requires CPAs to have monocular vision, with one eye on the computer and the other on the clock. In such a critical time, staffing shortage presents them with many challenges: increased workload for existing staff, severe drop in productivity levels, no work-life balance, burnout, stress, and increased cost for incurring every service. With the impending tax season, the growing shortage of proficient accounting and tax talent needs immediate attention from the CPA firms’ leadership to tame the tax season without getting stifled by the continuing talent shortage.
With this blog, we intend to chart a path for CPAs to emerge victorious this tax season by conquering the talent shortage without compromising on their own well-being and the quality and quantity of services they offer. So, let us start by understanding the potential cause of the widespread talent shortage.
Unearthing The Roots of The Talent Shortage
While the accounting talent shortage has emerged as a hot topic recently, the number of licensed CPAs and accountants has been plummeting for quite some time now. The gradual but consistent plummet in the number of accountants and CPAs can be attributed to a wide assortment of factors ranging from the global COVID-19 pandemic to the retirement wave of Baby Boomers. Here, we have listed some of the most prevalent and concrete causes behind the current accounting talent shortage.
A Workforce Nearing Retirement
Across the U.S., a considerable chunk of the CPA workforce is either retiring or fast approaching retirement age. This is leaving a substantial gap in the experience and expertise in the accounting industry.
Accounting Just Isn't the First Choice of Generation Z for Higher Education
There has been a significant drop in the number of students earning bachelor’s or master’s degrees in accounting in the U.S. As per the American Institute of Certified Public Accountants (AICPA), for the academic year 2021-2022, there was a drop of 7.8% for bachelor’s degrees and 6.4% for master’s degrees compared to the previous year.
Increasing Demand for Qualified CPAs
Tax laws are complex; there are no two ways. Understanding them requires special skills and talent, which only CPAs have. However, with the number of qualified CPAs decreasing and the demand for guidance and compliance solutions increasing, finding a qualified CPA rightly suited to your business has become more challenging.
Underwhelming Compensation Packages
Considering the intricacies of an accountant’s work, especially during peak tax season, their compensation could be more impressive. Compare the compensation packages from the accounting industry with any other industry, and you will understand the severity of the issue.
How Can CPAs Address the Talent Shortage in The U.S. This Tax Season?
We have discussed the strategies to overcome the current accounting talent shortage in the U.S. in our recently published Whitepaper titled “Accounting Talent Crisis: Why Firms Struggle to Find Staff and How to Adapt?.” Considering the severity of the issue and the impending tax season, CPAs must quicky implement a few effective strategies to overcome the staffing shortage crisis and have a fruitful tax season.
Here are those strategies for you:
Build A Robust Talent Recruitment and Retention Program:
Getting skilled accounting talent and retaining one is hard. Thus, if you have one, you must do everything possible to hold on to your existing staff. It would be best to create a culture of inclusivity, healthy work-life balance, an appealing reward and recognition program, and, most importantly, a transparent growth path within the organization. Have active mentorship and upskilling programs to retain talent and attract new ones. While money should not be a motivator, it certainly is a great enabler, so you would want to offer competitive salary and benefit packages to attract and retain qualified CPAs.
Offer Personal & Professional Upskilling Opportunities:
There’s more than work in all our lives. Your training and development programs for the new joiners and the existing staff must reflect that notion. Actively conduct seminars, workshops, and skill enhancement programs for your team. This will not only keep them updated with the latest tax laws and regulations but also will give them a sense of belonging, which can go a long way in retaining top talent. Encourage employees to actively pursue professional certifications that are relevant to their career path and demonstrate that you want them to grow and prosper in their careers.
Employee Well-Being is Not a By-product:
Always pay attention to burned-out staff. If you sense burnout within your team, take preventive measures to ensure your employees have a healthy work-life balance. Consistently fostering a positive and engaging work environment ensuring employee well-being is at the epicenter of it all.
Harness The Power of Technology to Boost Efficiency and Productivity:
Automation is your best friend when looking for a means to lower employee burnout and overcome talent shortage. For tasks that can be automated, proactively seek automation. This will boost your team’s efficiency and productivity and free up enough space from their plate, allowing them to contribute more towards your strategic moves and value-added activities.
Explore Outsourcing/Offshoring Options:
Outsourcing/offshoring is a proven and highly effective means to handle peak tax season volumes. It has been proven, successful “global team” strategy for many of the Top 100 firms for years. With technological advancements, this strategy is well within the reach of almost all firms. The outsourcing/offshoring arrangements can be permanent or contractual based on your tax season or all year-round requirements. Outsourcing provides an immediate solution to the ongoing talent crisis and saves long-term hiring costs, which can be substantial depending upon the needs of your firm.
Grow Your Relationships with Universities & Colleges:
Local or international universities and colleges are the best way to address the talent shortage. It gives you instant access to fresh accounting talent and allows you to represent the accounting industry and make it “cool.” You can do it by promoting your firm’s culture among the future CPAs or by conducting workshops with the students to give them a taste of real-world problems that they, as CPAs, will be solving.
Start Early to be Ready in Time:
If you want to be ready for the tax season, start now to implement your chosen strategies. Many firms are already taking steps to do so and they will hire new staff quickly leaving lesser choices for you and only increase your staffing costs by the time January arrives. You would not want to turn away new work and new revenue that walks in your doors in the tax season just because you don’t have adequate staffing.
By effectively implementing these strategies, CPA firms can overcome the accounting talent shortage while sprucing up their workforce for the immediate future. These measures will not only help you have a fruitful tax season but will also create a solid foundation for the sustained growth of your firm.
If you need help preparing for the busy tax season –
Your Pathway to Cruise Through the Busy Tax Season
As an accounting firm, you must be prompt in understanding the budding talent expectations and the cultural trends dominating the industry. The talent shortage does not have a panacea; it will require a complete overhaul of the industry in terms of approach towards hiring, work-life balance, and the use of technology to streamline operations. As an accounting leader, you need to chart the pathway for your firm by aligning the long-term business goals with the emerging trends in accounting talent hiring and retention. Whether you are looking for a long-term solution to the ongoing talent shortage within the accounting industry or need a quick fix to address the influx of client requirements this tax season, we have resources for you. Just write to us at firstname.lastname@example.org, and we will have our experts reach out to you to understand your needs and tailor a solution accordingly.