Do we need a paradigm shift to overcome the accountant shortage?
At present, the accounting profession is facing a huge crisis. For years, industry leaders have been alarming the growing shortage of qualified accountants. Not only are individual firms threatened by this, but the integrity of financial systems is also threatened. As we are struggling with this challenge, a pressing question emerges: Do we need a paradigm shift to overcome the accountant shortage?
Understanding the Crisis
Before addressing the solution, the most crucial thing is to understand the depth of the problem and to know the real reason behind this. The accountant shortage isn’t a minor inconvenience. Instead, it’s a systemic issue that has been building for years.
The recent accounting survey shows that we could have a shortage of up to 3.5 million accountants by 2025, which is a big issue for accounting firms.
According to the American Institute of CPAs (AICPA), the number of accounting students earning U.S. postsecondary accounting degrees declined steadily in the 2021-22 academic year. Around 47,067 students earned a graduation in accounting in the year 2021-22, which is 7.8% less than the previous year. Similarly, the number of master's degree holders in accounting also fell 6.4% to 18,238. The thing is, this decline comes at the point when the demand for accounting services is higher than ever.
The U.S. Bureau of Labor Statistics projects that the employment of accountants and auditors will grow by 7% from 2020 to 2030, faster than the average for all occupations. This growth survey, coupled with the declining number of new entrants to the industry, brings out a concerning picture for the future of accounting.
Root Causes of the Shortage
Several factors responsible for this accountant shortage include:
1. Changing perceptions: Many new professionals regard accounting as a mundane, number-crunching career rather than the dynamic, strategic role it is now.
2. Rigorous educational requirements: The journey to becoming a CPA is not easy; it’s long and challenging. It demands 150 credit hours of education and passing the exam.
3. Technological disruption: As AI & automation are rising, it is raising a question of the long-term viability of accounting as a career.
4. Work-life balance concerns: The accounting profession, especially when talking of public accounting, is known for long hours and is connected with high stress, especially during the tax season.
5. Competitive job market: In the present scenario, potential accountants have many career options, and some of them seem much more appealing too.
The Need for a Paradigm Shift
With the discussed depth of the crisis and complexity of the problem, it’s clear that incremental changes are not enough. What we need to tackle this is the paradigm shift, a fundamental approach to attracting, training, and retaining accounting professionals.
This shift must encompass several key areas:
1. Education and Training:
Accounting education, in its traditional model, focuses mainly on technical skills and rote memorization. This is now no longer sufficient. We need a new approach that emphasizes the following:
1. Critical thinking and problem-solving skills
2. Data analytics and technology proficiency
3. Soft skills like communication and leadership
4. Interdisciplinary knowledge, blending accounting with fields like IT, finance, and business strategy
Universities and professional bodies should make sure to redesign curricula that make students ready for not only today’s accounting roles but also for the coming & changing needs of the profession.
2. Technology Integration:
Technology is not a threat; it is a tool that the accounting profession needs to enhance efficiency and add value. This means:
1. Integrating AI and machine learning into accounting processes
2. Leveraging data analytics for deeper insights
3. Using blockchain for secure, transparent financial transactions
4. Adopting cloud-based systems for real-time collaboration
With new technology and resources, accountants can focus on activities of higher value, such as strategic advisory services, freeing them from routine tasks. The adoption of AI and technology is expected to grow on a larger scale in the coming time. The survey shows that 80% of credit risk organizations expect to implement gen AI technologies within a year.
3. Work Culture and Environment:
The accounting profession often demands long hours and high stress. This paradigm shift involves:
1. Promoting work-life balance through flexible working arrangements
2. Emphasizing mental health and wellbeing
3. Creating more diverse and inclusive work environments
4. Offering clear career progression paths and continuous learning opportunities
4. Marketing and Branding:
The accounting profession is no longer going with the old branding. It now requires rebranding to attract new talent. This involves:
1. Highlighting the strategic and advisory aspects of modern accounting
2. Showcasing the profession's role in sustainability and social responsibility
3. Emphasizing the tech-savvy nature of contemporary accounting practices
4. Promoting success stories of young, dynamic accountants
5. Cross-Industry Collaboration:
It is necessary for accounting firms to collaborate with tech companies, universities, and other industries to:
1. Develop innovative solutions to accounting challenges
2. Create interdisciplinary training programs
3. Attract talent from diverse backgrounds
Addressing the Shortage: MYCPE ONE's Offshore Staffing Solution
While the accounting profession is already struggling with this paradigm shift, innovative solutions are also available to tackle the staffing crisis. MYCPE ONE, a leading partner in offshore staffing for accounting and CPA firms, offers a practical and effective approach that lets you overcome the accountant shortage.
How MYCPE ONE Helps:
1. Access to talent immediately: MYCPE ONE provides CPA and accounting firms with qualified, experienced offshore experts, assisting with filling the gap quickly and efficiently.
2. Cost-Effective Staffing: By utilizing offshore resources, firms can deal with their staffing needs more economically, permitting them to allocate resources to other essential areas like technology integration and staff advancement.
3. Scalability: MYCPE ONE permits firms to increase their teams or down in view of seasonal demands, giving the adaptability that is vital in the present dynamic accounting landscape.
4. Concentrate on High-Value Roles: With routine tasks handled by offshore staff, onshore accountants can focus on essential advisory roles - lining up with the developing nature of the profession.
6. Innovation-Driven Approach: The offshore teams at MYCPE ONE are knowledgeable about the most recent accounting technologies, which is in line with the industry's move toward greater tech integration.
As the accounting profession explores this critical juncture, MYCPE ONE offers an extension between the current staffing emergency and the paradigm shift. By partnering with MYCPE ONE, accounting firms can address their prompt staffing needs as well as position themselves for outcomes in the evolving landscape of the profession.
Final Thoughts
The accountant shortage is a complex issue that requires a strong solution. In the present scenario, a paradigm shift is not just desirable but indeed necessary for the continued relevance and success of the profession.
All stakeholders involved in the accounting ecosystem will need to put in a lot of effort and investment to make this change happen. In any case, the potential rewards are significant. We can not only address the shortage that exists right now by reimagining the profession of accounting, but we can also make accounting a career choice that is appealing, dynamic, and rewarding for generations to come.
Our economic systems have always relied heavily on the accounting profession. It can evolve to meet the challenges and opportunities of the 21st century while continuing to perform this essential function thanks to this paradigm shift.
Those who are willing to embrace change, make use of technology, and constantly adapt to the changing requirements of businesses and society will undoubtedly shape the accounting profession's future. The change in outlook isn't just about conquering a deficiency — it's tied in with rethinking being a bookkeeper in the cutting-edge world.
Shawn Parikh is the CEO and Co-Founder of MYCPE ONE. A Chartered Accountant by qualification, he has over 15 years of experience of being a problem solver for small to mid-size firms and over time he has given consultation to thousands of CPAs, accountants and tax pros. Shawn has always been a big believer and advocate of social enterprises and small accounting firms & businesses. He consults and speaks on several topics ranging from Building Remote Team - Remote Working, Offshore Staffing, strategic planning, Scalability of Accounting Practice, cloud accounting, practice management, LinkedIn marketing, etc.
Christopher Rivera
