It’s time to have a brutally honest conversation about the immediate future of the accounting industry and what needs to be done to right the ship. Consider the facts from the AICPA reported in The CPA Journal:
In 2020, the percentage of the CPA workforce that met the retirement age approached 75 percent. CPAs are retiring in droves. Imagine what would happen to your firm if three-quarters of your workforce left in the next three to five years.
Meanwhile, the number of college graduates earning a degree in accounting has dropped 4 percent since the pandemic, and the number of graduates sitting for the CPA exam dropped by more than one-third from 2010 to 2021.
Neither of these trends should be a revelation. Yes, Covid accelerated retirements, but anyone paying attention knew a wave of baby boomer retirements was coming. The pandemic simply moved up the timeline.
As for the lack of talent to fill the massive void, the number of young people pursuing accounting careers has been dropping for more than a decade. If we’re going to fix the problem, we have to identify the reasons why we got to this point.
Teaching the Value of Hard Work
The hard work starts on day one as the requirements to simply break into accounting are more cumbersome than other industries.
Students must complete five years of higher education, not four, which is a significant hurdle. Fortunately, the two-year rule that required two years of experience to get a CPA license has been eliminated, but convincing someone to spend more money and more time in school than other professions to become an accountant can be a tough sell.
The bigger reason for the talent shortage in accounting is the disconnect between young people and those from my generation who came up through the ranks in the 70s and 80s. That disconnect revolves around the value and importance of hard work.
This isn’t about walking two miles to school uphill in a foot of snow. Priorities and motivations are different for younger generations. They want different things from their lives and careers, and that’s fine.
However, I firmly believe that many young people don’t fully appreciate the value of hard work, mainly because they haven’t been shown what can be achieved through hard work.
There is also a disconnect about what hard work looks like. Does hard work involve putting in long hours, or is it about using technology to improve efficiency and productivity? To be successful, you need a little bit of both.
Fortunately, technology can’t do the job of an accountant beyond mundane, routine tasks. That’s one of many things that makes accounting such a great career!
Although outdated stereotypes still associate CPAs with number crunching and piles of paperwork, accounting is about people. Long hours combined with smart use of technology allow you to not only get the work done, but also to devote more time to building and maintaining relationships.
The fact is that if you’re looking for a four-day work week or expecting to sign off at 5 each day, accounting probably isn’t the career for you. There is no easy, one-size-fits-all formula for achieving success.
In this industry, those who are driven to succeed do so through hard work.
Bridging the Great Divide
This message is for senior partners and leaders.
The first step to fixing this problem and bringing more young people into accounting is to stop comparing the life and career experiences of young people today to your experiences as a young person 40 or 50 years ago.
The world has changed. People have changed. Technology has changed. Accept it and get over it. Complaining about “kids today” is unproductive and pointless.
We seem to have these warring factions between generations that, quite frankly, need each other. Senior partners and the industry as a whole need more young people to fill the talent
gap. Young people need a career that’s lucrative and stable, allows them to make a difference in people’s lives, and has immediate opportunities.
Accounting offers all these things and more.
However, I would ask the accounting establishment to consider the following questions.
- What are you doing to communicate the rewards and benefits of a career in accounting?
- Are you hiding the lifestyle you enjoy and how your career has enabled you to provide for your family and achieve your goals?
- Are you sharing stories of how you’ve helped individuals, families, and organizations solve problems and achieve their goals?
- Are you taking full advantage of modern technology to streamline processes, create efficiencies, improve collaboration, and provide more flexibility?
- What are you doing to debunk outdated stereotypes about the work and lifestyle of a CPA?
- Does your firm look like the diverse community you serve? If not, what are you doing to change that?
- Are you paying a competitive salary?
According to the Bureau of Labor Statistics, starting salaries in accounting are lower than other financial careers, such as financial analysts and financial managers. CPAs typically end up making more money, but the requirement of 150 semester hours to obtain a CPA license, which is more than the average bachelor’s degree, continues to be an obstacle.
Ultimately, complaining about young people not wanting to work hard accomplishes nothing. Our job as leaders in the accounting industry is to connect with those people who are willing to put in the work. We need to make sure they understand why accounting is such a secure, lucrative career and what can be achieved through hard work.
Just as importantly, we need to provide a clear path to success.
One reason for the angst between generations is that both sides are very passionate. Senior partners have been in accounting for 30, 40, or 50 years because they have a passion for the work, the impact of the work, and the lifestyle it affords them.
Let’s be very clear. Passion is a must if you expect to find success and fulfillment in accounting.
Winston Churchill said, “Success consists of going from failure to failure without loss of enthusiasm.”
It’s easy to say to yourself, “I won’t let it get me down. I’ll keep pushing. I’m going to keep moving forward. I’m going to be a partner in five years.”
That brings me to another quote from Mike Tyson, who famously said, “Everyone has a plan until they get punched in the face.”
I can’t tell you how many times I was punched in the face, especially early in my career, and I can all but guarantee it will happen to every new CPA. I don’t see how anyone can persevere through failure and adversity without passion for what they do every single day.
The good news is that there’s a pot of gold at the end of rainbow that makes the journey worth it.
The younger generation has proven to be very passionate about certain causes, issues, and beliefs. Older generations may not share or even fully understand those passions, but they should be commended and respected, not dismissed.
Imagine what could be achieved if passion for accounting could be cultivated in young people and firms could channel that passion into better services and results for their clients. This is key to turning the current talent shortage into a massive opportunity for CPA firms and the industry.
In future articles, I’ll discuss the keys to achieving success through hard work and passion and share real-world stories from CPAs who have found success and fulfillment in their careers.