I made my entrée into accounting way back in 2007, at the time my job involved a three-hour roundtrip journey across four Bay Area counties and back and I was looking for something a bit closer to home. Shortly after starting in CPA review, I started seeing more and more “For Sale” signs on the yards of the houses my bus would pass on the way to work and not that much longer after that, Lehman Brothers failed and, well, you know what happened after that.
Why am I bringing up ancient history? Besides needing to hit minimum word count on this, I bring it up because even all these years later, I have a vague recollection of the phone calls I got in 2008 from aspiring CPAs. People from various backgrounds — many of whom were in their 30s or even 40s — who found themselves suddenly out of a job flocked to accounting because it was one of the few industries consistently hiring through the recession (the other being government). Most of them were people who took an accounting class or two in college, decided it wasn’t for them, and did something else with their life. And here they were, the bank breathing down their neck, job prospects nil, throwing away 15 years of work experience because their chosen career was no longer an option. They say accounting is recession-proof, I had an inside view during the worst recession of our lifetime and must agree.
I have no doubt then that accounting firm leaders are eagerly awaiting the next economic dip to solve their critical talent problems. If you wreck it, they will come. As bad as the economy is these days, it’s not “force people into accounting because they have no other options” bad yet.
Wall Street Journal ran a piece on the accountant shortage yesterday and from it we learn that it’s taking much longer to fill accounting positions than it did last year:
A deepening shortage of accountants is driving a growing number of companies to raise salaries or seek temporary help to strengthen their finance teams amid a slowing economy.
Many employers over the past decade have struggled to find qualified workers, a challenge accelerated by a decline in the number of job seekers amid the Covid-19 pandemic. The U.S. labor force has been shrinking since early 2020, as more baby boomers retire.
Companies’ accounting and finance departments in particular, which are crucial for managing financial operations, internal controls and financial reporting, are suffering from the lack of personnel. Fewer people are pursuing degrees in accounting and starting new jobs in this area, resulting in more open positions for related roles and searches that take longer to complete. And digitization and automation aren’t expected to fill the gap.
Look, there’s a chart!
The number of postings for U.S. accounting and audit roles totaled roughly 177,880 jobs this year through Nov. 30, up from 141,340 during the prior-year period and the highest since at least 2008, according to Revelio Labs Inc., a provider of workplace data. People started 113,400 of these positions this year through Nov. 30, down 15.9% from the prior-year period, Revelio said. Audit and accounting jobs on average require 56 days to fill, up from 46 during the prior-year period.
The article goes on to profile a Nevada winemaker struggling to find accounting talent. The salary equation is delicately danced around:
The company is offering higher salaries to candidates for certain positions and turning to temporary workers such as interns, Ms. Johnston said, but declined to provide specifics on pay. “We sweetened the pot a little bit from where the company was originally,” she said.
The problem is that the pot has been sour for too long. “The accounting industry for some reason has just not moved with the rest of the country in terms of offering competitive salaries, and this has been going on for over a decade,” Surgent VP Liz Kolar told Bloomberg Tax earlier this year. Had salaries kept up over the last decade, perhaps things wouldn’t be so dire now. Despite much hand-wringing by thought leaders over why no one wants to be an accountant, the one thing consistently repeated by accountants themselves is: salary. They don’t get paid enough. Period, end of discussion, no further conversation needed. But WSJ has minimum word counts to hit as well so we shall soldier on.
Another company profiled in the WSJ piece says it is using accelerated promotions to create the talent it needs:
GEE used to elevate staff accountants to senior accountants in one to three years and to managers in three to six years, Mr. Thorpe said. Now, those promotions take less time, with Mr. Thorpe pointing to an employee who made it to manager of financial reporting in less than two years.
I’m curious to hear the peanut gallery’s thoughts on that one.
It seems no matter what these companies do, the talent just isn’t there. Small firms are suffering, and we’ve reached the point in the shortage where small potential clients simply can’t find anyone to do the work, no matter the cost. Wait until the large firms have to start turning down work, that will be fun.
That’s OK though. A potential recession could drive more students back into the profession, said Brandi Britton, executive director for finance and accounting at Robert Half to WSJ.
In a downturn, students tend to gravitate toward degrees in accounting and finance because they are considered more stable career paths than, for example, marketing and communications.
There is this belief that a recession will fix things right up a la 2008. The realtors and office managers and bank tellers will come running to accounting, tears streaming down their faces, and accounting will open its arms wide and embrace them with a warm and loving “we’re here for you, there’s work to be done.” But what if reinforcements aren’t coming? What if simply being recession-proof isn’t enough in a post-Covid world where people across all sectors decided there’s more to life than grinding away for a bum paycheck? What if — and call me crazy if I’m out of line here — the baby boomer vacuum we’ve known was coming for decades just can’t be plugged even if we had an abundance of accountants to fill it (which we don’t, obviously)? The work has become increasingly complex since the boomers we need to replace joined the profession all those years ago, a warm body and an amenability to eating shit in your early 20s isn’t enough for the next generation of accounting talent. The profession demands an army of well-spoken, highly tech literate, out-of-the-box thinking young people eager to put these skills to work, has not sufficiently increased pay to justify these demands, and wonders why the individuals it craves are not attracted to accounting. Gee, it’s a real puzzle.
So what happens when a real, brutal recession happens and no one shows up? Is there even a Plan C or is this it? “We’ll be here waiting when you get desperate”? That’s the message we’re going with huh.
Struggling to Find Accountants, Businesses Boost Salary Offers, Hire Temporary Workers [Wall Street Journal]