Post pandemic, evidence is indicating a real issue with the supply and retention of talent in the accounting profession. The issue can vary by jurisdiction, however the shortage of accountants is a real issue when viewed globally.

According to the Wall Street Journal of 28 December 2022, between 2020 to 2022, more than 300,000 U.S. accountants and auditors left their jobs, an alarming 17% decline of registered CPAs, and the dwindling number of college students coming into the field can’t seem to fill the gap.

Baby boomer retirements are only part of the reason. Young professionals in the 25-34 age range and midcareer professionals between 45-54 also departed in huge numbers since 2019 according to the US Bureau of Labor Statistics. Recruiters involved in luring experienced accountants into new roles say they are often moving away from accountancy and into other roles in finance and technology sectors.

According to the CPA Journal of November 2022, a May 2022 report from the National Student Clearinghouse Research Center indicated that undergraduate enrolment had declined 4.7% from spring 2021–spring 2022, and followed a 4.9% decline in the preceding same period. This equates to a fall of nearly 1.4 million students since the COVID-19 pandemic started (and 2.6 million students over the past decade) and is the largest fall in 50 years – the worst two-year period previously was a mere 3.3% decline during 2011–2013. The question is: what is causing such a dwindling interest in the accounting program and is this trend reversible?

If you think this is a US problem, think again. From Australia to Singapore, Malaysia to New Zealand, many countries are struggling to attract enough accountants into the profession. This trend is coming at a time when the demand for accounting talent is on an upswing. With new areas such as sustainability reporting and assurance and the greater role accountants and auditors are playing in areas such as anti-money laundering, data analytics and cyber-security, everyone is clamouring for accounting talent. The market will naturally gravitate to non-accountants to provide those services if nothing is done to address the shortage of accountants. And that would not be in the public interest should professionalism, standards, quality, accountability and confidence in information and opinions reduce.

The Early Warning Signs?

Perhaps there were hints of this impending issue in earlier years. The small- and medium-sized practice (SMP) segment of the profession has often faced a challenge of talent shortage. According to the Global SMP Surveys conducted by IFAC between 2014 to 2018, attracting talent into this segment of the profession has always ranked in the top 3. Aside from the perennial issue of SMPs competing with and losing staff to the bigger firms, the over 6000 respondents of the 2018 Global SMP Survey cited that attracting the next generation of talent remained a high or very high challenge due, inter alia, to the following reasons:

• Lack of interest from candidates.
• Increased opportunities in other fields; and
• Concern about work-life balance, and flexibility.

In the past, these may have been seen as confined to the SMP segment of the profession. However in light of current experience and evidence, these were likely early ‘red flags’ for the profession as a whole.

ACCA’s Global Talent Trend 2023

The recent ACCA Global Talent Trend 2023 report, with 8,405 respondents, provides further insights. While a career in accountancy has been seen as providing secure employment, and international mobility is an attractive proposition, factors that are currently seen as detracting for young professionals includes:

• Dissatisfaction with pay, particularly as inflation bites into disposable incomes. Remuneration is still identified as one of the top attraction factors for employees.
• Less opportunities to be able to work from home. While there are firms and companies that have provided such flexibility, continuing practices established during the pandemic, many others are slowly reversing such practices, citing the need for more physical interaction among staff.
• Burnout is a real issue for accountants. Long working hours previously seen as a badge of honor has been quoted as a deterrent for younger people wanting to join the industry.
• Technology concern, which is two-fold: faster pace of technological change in the profession is ‘turning off’ some people, especially the baby boomers; for others, there is the talk of AI taking over the work of the accountants – although most experts are not convinced that the latter will be happening anytime soon, if at all.

Due to such concerns, real or perceived, the exodus of talent continues, and new sign-ups are falling. Hence, the accountancy profession and Professional Accountancy Organisations (PAOs) in many jurisdictions have to now sit up and deal with this in a holistic manner.

CAPA’s Perspectives & Possible Solutions

As a regional accountancy body, the Confederation of Asian and Pacific Accountants (CAPA) took to the challenge to identify ways of reversing the disturbing downhill trend in the attractiveness of the profession.  At a Members’ Assembly in Colombo, Sri Lanka in October 2023, CAPA organised a forum to discuss this topic.

The President of IFAC, Ms. Asmâa Resmouki shared IFAC’s work in this area, including the need to better “brand” the accountant which at present is often curated largely by non-accountants portraying an accountant in a boring or negative image. Changing perceptions requires the profession to create new narratives and embrace social media used by the younger generations to promote an image that reflects reality and is appealing.

Several member presentations continued to set the scene and stimulate ideas for later debate. Initial information shared included:

• The aspirations and dreams of the future through the lens of Generation Z – their potential interest in the accountancy field as well as employers’ perspectives on this generation.
• Toolkits and career cards for high school students being used by one PAO, to provide better insights into the life of an accountant and the role they play in the success of organisations.
• Increasing exposure of accounting opportunities through career weeks, offering of scholarships, and allowing for transferable academic credit for general business programs.
• A push in the U.S. for accounting to be recognised as a STEM subject, indirectly benefitting from the government’s on-going incentives to attract more students into these fields.
• Advocating to governments and regulatory agencies to speak out on the risks of organisations and individuals to engage unqualified accountants, thus promoting the importance and status of the profession, and impacting the desire of individuals to be part of it. Such messaging can be influential in certain part of the Asian region due to the cultural context.
• Introducing mutual recognition agreements (MRAs) and offering membership pathways for accountants from other countries.

Regarding the latter point, mobility has always been a key attractiveness factor for the profession, and therefore MRAs are to be encouraged. However, an unintended consequence on occasion could be moving accountants from jurisdictions where there are already few accountants and their presence is important for economic development, to more advanced economies which already have large numbers of accountants. Not unlike other professions, this ethical dilemma cannot be ignored. Further, moving accountants around does not necessarily ‘grow the total pie’ but could be useful if any jurisdictions have a surplus of accountants.

The open forum gave rise to other ideas and possible solutions to address the declining numbers:

• Dividing accountancy programs into fundamental (or core) and elective modules – students no longer being required to study topics that are not aligned to their chosen career.
• Splitting some topics into bite size modules and utilising technology to deliver, providing flexibility in terms of when and how to study, and addressing affordability concerns, aligning nicely with the ‘earn and learn’ concept that is being favoured by the younger generation.
• Expanding the pipeline by focusing on accessibility to the profession by non-accounting graduates. Finance graduates and data engineers may have some common syllabus components with accounting education – hence, easy to allow them to pivot. Graduates of other disciplines, such as sustainability or social science, may also be compatible as the needs of the accountancy profession change. Conversion or bridging programs may be required to meet full membership requirements.
• In Asia Pacific, certain PAOs have established distinct fully owned ‘subsidiary Institutions’ to address the growing need for professionals in specialised domains like valuation and insolvency, enabling non-accountants to attain qualifications in these areas. The creation of separate entities, stemming from constraints in Constitutions preventing the PAOs from offering courses to non-members, allows PAOs to not only bridge the demand-supply gap in specialised fields but also foster the inclusion of non-accountants into the accountancy profession. This expands the reach and appeal of the accountancy profession beyond traditional membership boundaries.
• Reaching out to secondary or high school students while they are still contemplating their future studies and careers. This could be a game changer in influencing students to consider tertiary education subjects that leaves open the option of joining the accountancy profession, at a time when they face so many opportunities and career options.

At CAPA, we have been focused for some time on the Accounting Technician (AT) sector of the profession. An AT program provides an alternative entry pathway into the profession, largely by providing opportunities to school leavers who do not pursue a university path. CAPA issued a call for action in late 2022 for the profession and PAOs to consider recognising ATs and introducing AT programs. This has the potential to positively impact the supply and quality of accountants.

Where To From Here?

A concerted effort is required from all stakeholders to reverse the trends witnessed, and PAOs should be leading many of these initiatives with a compelling narrative. Many PAOs are well advanced in considering the challenge and implementing initiatives, and this article is not intended to be a complete list of possible initiatives and solutions. Other PAOs may further assess the situation in their own jurisdiction and monitor carefully, adopting and adapting initiatives as appropriate.

CAPA is currently collaborating with other parties to survey many PAOs around the world, including CAPA members, to better understand the extent and nature of the challenge. The survey results will provide an informed picture of the situation across Asia Pacific and provide insights for CAPA and its members to explore.

Meanwhile, PAOs are also encouraged to share ideas and success stories in this space, so that similar initiatives can be considered and as appropriate, replicated by others – the accountancy profession has always had a very global outlook when it comes to solving multi-faceted problems. This will continue to drive the positive changes needed to ensure a vibrant future for this very global profession.

This article was first published on the IFAC Knowledge Gateway on 20  March 2024. 

To access the article on Gateway, please refer here.