Accounting Today has published “The 20 biggest problems for firms in 2023” and no one will be surprised to find out that the war for talent ranks #1 among the firms AT surveyed. Talent actually has its tentacles in a number of problems on AT’s list and spills over into several items–capacity issues, burnout, retention. Hell, half the list is related to talent. Writes Dan Hood: “[S]taffing is by far the most serious concern (so massive, in fact, that it has fragmented into a handful of major issues and takes up five spots on our list).”
Since we’re all sick about talking about the talent shortage, let’s take a look at the second biggest problem for firms in 2023: Rising salaries.
2. Rising salaries
Scarce supply and high demand can only mean one thing: higher prices.
“Rapidly rising compensation rates in our industry — and poaching from large, national firms” are serious problems for firms, according to Erica Ishida, president and COO of Ohio’s Apple Growth Partners.
Firms have to pay talent so much more, in fact, that many of them share the concern of Glen Swanson, CFO at MHCS in Iowa, about “maintaining profitability while having to significantly increase salaries.”
Raising salaries to levels that would put accounting back in the game as an attractive major to students is indubitably a hardship for firms. F.
Now let’s see a chart of staff salaries over the same period https://t.co/2vEabzGTJd
— Going Concern (@going_concern) March 14, 2023
We have said this before but raising salaries now would hurt a lot less had firms done a better job of doing it over the last decade and a half or so. You know, incrementally. Instead, firms skated by year after year as computer science lured the would-be accountants away with its shiny technology and superior starting salaries. Suddenly 15 years have gone by and new hires are making basically the same money their predecessors — who are now partner age — made when they were hired in the early ‘aughts. That’s changing now, thankfully, but it should have been done a decade ago.
While we’re here, let’s look at accounting’s biggest issues in 2017 (Accounting Today):
Firms continue to face a myriad of issues that affect the way they work, including increased regulation and global complexity, a shift in the workforce, and new client demands for value-added services.
More recently, though, new issues have emerged that have actually put into question the role and value of accountants in general, such as artificial intelligence and robotic process automation, which has really shined a spotlight on the profession. The Boston Consulting Group predicts that by 2025, up to one quarter of jobs will be replaced by either smart software or robots. A separate study from Oxford University suggests that 35 percent of existing jobs in the United Kingdom are at risk of automation in the next 20 years. Among the top 10 percent of jobs most likely to be automated: insurance underwriters, tax preparers, loan officers, credit analysts, and accounting professionals.
Ah to go back to the days when they were threatening to put you out of work! If only firms had been more proactive about the salary issue, they’d have five better problems to focus their efforts on in 2023. Like automation, succession planning, and how to get more Papa John’s coupons.