Fewer and fewer people are entering the accounting field in recent years.
This raises the question:
What will happen to the accounting industry?
In this blog post, you’ll learn about the extent of the shortage and why it’s happening.
But more importantly, you’ll learn how your firm can still grow despite the challenges.
Let’s get into it.
Table of Contents
- What Is the Accountant Shortage?
- Why Is There an Accountant Shortage?
- What This Means for Accounting Firms
- How Do You Grow Your Accounting Firm During a Shortage?
What Is the Accountant Shortage?
Here are three key stats you should know about the shortage:
1. More Than 300,000 Accountants Have Left the Profession
According to a Bloomberg article from last year, about 340,000 accountants in the U.S. have left their jobs in recent years. This led to a 17% drop in industry employment.
As a result, over 700 companies have blamed the shortage for contributing to errors in their financials.
2. Consistent Decline in Accounting Graduates
Unfortunately, companies suffering from the accountant shortage won’t find much relief from new graduates.
The 2023 AICPA Trends Report highlights a 7.4% drop in accounting graduates from 2021 to 2022, the biggest single-year decline in almost three decades.
Meryl Johnston, a coach in my Future Firm Accelerate program, has also noticed a similar trend in Australia.
3. Aging Workforce
To make matters worse, AICPA also estimated that 75% of public accounting CPAs are set to retire in the coming years.
Considering these numbers, I won’t lie — it doesn’t look great.
Basically, companies and entrepreneurs will continue to struggle to find new talent, as fewer graduates are entering the field, while a large part of the current workforce is getting closer to retirement.
Why Is There an Accountant Shortage?
1. Lower Salaries Compared to Other Industries
According to Indeed, the average annual salary of an accountant in the U.S. is $65,349.
For reference, the average starting salaries for the Class of 2024 in fields like engineering and computer sciences are projected at $76,736 and $74,778, respectively, per the NACE Winter 2024 Salary Survey.
2. Demanding Education Requirements
Studying accounting is tough. It also takes a lot of time.
When I earned my CPA in Canada, I worked full-time for two years while studying at night.
This is similar to other countries, where accounting students must finish difficult courses, get work experience, and then pass exams before they can become accountants.
For example, in Australia, students usually study for three years and complete the CPA Program, which includes several exams.
In the U.S., CPA candidates usually need 150 credit hours, which means extra courses or a graduate degree. But some states are changing this rule. Ohio now lets CPAs qualify with a bachelor’s degree and two years of experience.
In the Philippines, students study for four years. Then, they take a CPA exam, which has a notoriously low passing rate.
3. Modern Career Trends
Nowadays, people are choosing careers in technology and digital marketing instead of traditional fields like accounting.
Accounting isn’t a “modern” field like technology.
Why?
For starters, tech-related careers typically offer more flexibility, work/life balance, and faster growth opportunities.
This is a very strong proposition, especially for the younger generation.
Deloitte’s 2024 Gen Z and Millennial Survey also highlights that they value these qualities in their jobs, driving their shift toward more dynamic industries.
4. Issues with the Traditional Accounting Firm Structure
Traditional accounting firms often follow a rigid setup that creates several challenges for both team members and the firm as a whole:
- Bottleneck at the Top: All work must go through the partner or firm owner for review and approval. This slows down team members and puts extra stress on the firm owner.
- Hectic Workflows: Workflows in traditional firms tend to be tedious and inefficient, often leading to unnecessary stress and burnout. The constant stress and heavy workloads can lead to frustration and even health problems.
- Lack of Flexibility: The traditional firm structure is not designed to accommodate work-life balance. This causes unhappiness and leads to more people quitting and fewer young prospects wanting to join the field.
Unfortunately, many accounting firms still stick to the traditional firm structure.
But if you’ve been following me for some time, you know that I’m a big believer in the modern firm structure.
Why?
It gives firm owners more control over their workloads and the freedom to actually step away from work – like one of my Future Firm Accelerate students, Marie, has done.
To give you an idea of how it works, when I was running Xen Accounting, I never tracked time.
Instead, I used capacity planning to predict workloads and meet deadlines. What mattered most was getting the work done right, no matter where or how it was completed.
And since all the work was planned for, overtime never became an issue.
This is very different from “old” systems in which firm owners take on more and more clients just to achieve the profits they want…
But in return, they work far more hours than they ever wanted. The balance and flexibility are non-existent.
Besides capacity planning, the primary advantage of the modern firm structure is that it helps firm owners work smarter and with less stress.
It lets you hand off tasks you don’t enjoy or aren’t great at, so you can focus on what you do best.
This not only makes your firm run more smoothly but also gives you more time and freedom.
Complex Financial Regulations
Businesses and governments need skilled accountants to properly manage changes in financial regulations.
The US Bureau of Labor Statistics projects a 6% growth in employment for accountants and auditors from 2023 to 2033, faster than the average for all occupations.
However, there aren’t enough qualified accountants to meet this growing demand, which further widens the gap between supply and demand.
What This Means for Accounting Firms
1. Tougher Hiring Competition
With the accountant shortage growing, it’s harder than ever to find and keep great talent.
So you have to ask yourself:
What makes your firm special? Why would someone choose to work for you instead of another firm?
To attract skilled accountants, you’ll need more than just good pay.
Think about things like a friendly work environment, opportunities for career growth, and flexible schedules.
Here’s an idea of what can make applicants more interested in joining your firm. This is an example from my staff accountant job description blog post.
If hiring locally feels too hard, offshoring might be the answer. We’ll talk more about that later.
You can also find more tips and resources to improve your job postings — just like Paula did — in my coaching program, Future Firm Accelerate.
2. Potential Growth Limits and Retention Challenges
Growth is simply impossible if you can’t find enough accountants to support it.
The quick fix often seems to be adding more work to your existing staff, but this is never ideal.
A survey by Deloitte found that major causes of burnout include long hours and unrealistic deadlines. Overworked team members can quickly feel stressed or think about leaving the firm.
On LinkedIn, I shared some tips on how to address these challenges and protect your team from burnout.
3. Overreliance on Automation
Accounting automation has changed the game for many firms.
When firms struggle with a talent shortage, automation often seems like the easiest solution.
With fewer people to do the work, it’s tempting to rely on tech to compensate.
I talked about this in one of my podcast episodes, where I laid out some reasons why people want to automate:
- You want things to go smoother
- You want to grow faster
- You want to save time
- And maybe you want more freedom
Don’t get my wrong, these are all valid reasons.
But here’s the thing — too much automation can also become a problem.
Why?
When firms over-automate, they risk losing the personal touch that clients value.
Keep in mind that accounting is still a relationship-driven industry. While you should aim for efficiency – you should be aware that too much efficiency in the form of automation could hurt client retention.
How Do You Grow Your Accounting Firm During a Shortage?
1. Leverage Offshore Talent
One effective way to grow your firm during a talent shortage is via offshoring or outsourcing, a strategy I recommend in my Future Firm Accelerate program.
This topic is also very popular within the community.
By hiring skilled accountants from overseas, you can access top talent, provide them with a salary they’re happy with, and save on costs without compromising service quality.
Here are a couple of platforms that can help you land talent overseas:
TeamUp
TeamUp (affiliate link) connects accounting firms with highly skilled accountants based in the Philippines.
Unlike traditional outsourcing solutions, it allows you to hire candidates directly. You don’t have to worry about ongoing BPO management fees.
The platform was founded by Isaac Smith, a former bookkeeping firm owner, and Meryl Johnston, a coach and active member of my Future Firm Accelerate program.
Onlinejobs.ph
Many in my Future Firm team were recruited through this website.
This platform probably has the largest database of Filipino offshore workers, making it an excellent resource for finding talent.
That said, I’m not suggesting you only look at one country when hiring.
Great talent exists everywhere, and if an applicant is a good fit for the role, it shouldn’t matter where they’re based.
To attract the best talent, you need strong job postings. Here’s how to do it:
- Be clear about the role: Explain the kind of person and skills you need.
- Make the job attractive: Show why candidates will want to work at your firm.
It shouldn’t be difficult to apply for your job postings, but it does need to be intentional.
For example, just adding specific instructions in the ad instead of using a one-click apply button weeds out a lot of applicants who are likely not a good fit for your firm.
Once you’ve found promising candidates, the next step is interviewing.
In this step, it’s all about asking the right questions — you can get ideas in my guide to questions to ask in an accounting interview.
2. Create SOPs and Provide Cross-Training
SOPs (Standard Operating Procedures) help your team keep workflows running smoothly, even when someone is unavailable.
They reduce reliance on specific people, which makes it easier to handle transitions or absences.
Here’s a snapshot of one of the SOPs we use at Future Firm.
Cross-training goes hand-in-hand with SOPs.
By teaching team members how to do tasks outside their usual roles, you can make sure client work gets done no matter what.
That said, you shouldn’t overdo cross-training either.
I talked about this in one of my podcast episodes, where I shared my experience when I was building my Future Firm team.
I was looking for a generalist who could handle everything, so I trained someone to take on multiple tasks. Unfortunately, the quality of work wasn’t where it needed to be.
What I learned is that everyone has their own strengths — few people are good at everything.
The key is to cross-train team members in areas where they can succeed while using SOPs as a compass.
3. Don’t Be Afraid to Hire Senior Accountants
There may be fewer new graduates because of the accounting shortage, but plenty of experienced accountants are still available.
The catch?
You’ll need to be comfortable paying more for senior talent.
I shared this on LinkedIn some time ago, where I discussed the problems that arise when you don’t have enough senior team members.
I followed this approach when I started.
And while it’s not the easiest path — it’s worth hiring a senior accountant or manager early on.
Why?
Instead of running everything through you, they can:
- Oversee operations
- Train junior accountants
- Free you up to focus on growing your firm
Junior staff, while more affordable, often need more guidance, meaning you’ll still have to check their work.
Senior team members, on the other hand, can work independently, moving tasks completely off your plate.
Yes, they will impact your margins at first, but their experience and ability to work on their own will save you time and help your firm grow in the long run.
If you’re looking to hire one, check out this senior accountant job description to attract top talent.
4. Use Automation Where Possible
I previously talked about the risks of overreliance on automation.
They’re real — but when used the right way, automation is a powerful tool to support your firm.
For example, automating tasks like bookkeeping, payroll, and client reminders reduces errors and saves time.
Consider services like Botkeeper (I am an advisor to the company) — an AI-powered bookkeeping solution — that can extract and input data from documents like receipts and invoices, significantly reducing the manual workload for your team.
Another tool to consider is Content Snare (affiliate link), which helps automate the collection of client information and documents.
It sends automated reminders and provides a simple portal for clients to submit required materials.
This allows your team to focus on higher-value work, like advising clients and solving complex problems.
So, yes, automation is good…
But I draw the line on tasks critical to client relationships like onboarding, direct communication, and personalized advice.
The key is to use automation to enhance strong processes, not to replace skilled accountants.
5. Acquiring More High-Quality Clients
Even if you have fewer accountants on your team, you can still increase your revenue by focusing on high-quality clients.
These are the clients who value your expertise, respect your processes, and are willing to pay a fair price for your services.
In one of my podcast episodes, I talked about the challenges of dealing with low-quality clients. These are the ones who constantly demand more, create unnecessary stress, and are rarely satisfied, no matter how much effort you put in.
During a talent shortage, dealing with low-quality clients can push your limited team to the breaking point.
On the other hand, high-quality clients will most likely understand your value, respect your work, and are willing to pay accordingly—leading to higher revenue and a healthier work environment for your team.
Your team can then focus on providing excellent service to clients who appreciate it, reducing stress and improving job satisfaction.
6. Implement Three-Tiered Pricing
Three-tiered pricing is a strategy that works hand-in-hand with acquiring high-quality clients and hiring senior team members.
It allows you to offer clients options that match their needs and budgets while increasing your profit margins.
My followers and my Future Firm Accelerate members know I am a big advocate of this pricing strategy.
Why?
Simple. It works really well. 🙂
By grouping your services into clear, set packages, you simplify your operations.
It also helps you plan capacity more effectively. Instead of overwhelming your team with constant client requests, you create a more stable and predictable workflow.
7. Prioritize Team Retention
An experienced, happy team can offset the impact of a talent shortage.
Over time, team members become more efficient with your workflows and client needs. This reduces the need for constant hiring.
Keep your team satisfied with benefits, time off, and upskilling opportunities. Training programs help them take on higher-value tasks, improve work quality, and drive firm growth.
As I shared on LinkedIn:
Investing in your team’s growth is one of the best decisions you can make for your business. When your team thrives, so does your firm.
Is Your Firm Ready to Handle the Accountant Shortage?
I hope this guide gave you some helpful tips to deal with the accountant shortage and keep growing your firm.
I’d love to hear your thoughts.
What do you think is the most useful strategy for handling the shortage? Which idea will you try first to prepare your firm?
Let me know in the comments! 🙂
