Accounting is still one of the most in-demand professions in the business space. While more and more accountants are needed, there is not a big enough supply of graduates to fill the demand. We’re going to take a look at what is going on in the accounting market and what is driving such a high demand for accountants. Let’s take a look!
Are Accountants in Demand? (Looking at the Market)
Accountants are in more demand than ever before. With an older generation of accountants retiring every day, new accountants are needed to replace them. Even after COVID-19, and in an economic downturn accountants are still needed.
As firms become more and more short-staffed, a snowball effect takes hold. to the lowest employees, and they have to pick it up. This causes more turnover and a higher demand for accountants at these sort of firms.
Where are Accountants Needed Most?
Well recently, a lot of accountants have moved out of the cities and are embracing remote work, many firms in the cities need accountants. Specifically, the big four are hiring tons for tons of accounting positions.
There are options in audit, tax, advisory, and IT-related work. While small firms are certainly competing for accountants as well, the large firms are putting out great marketing efforts to attract top new talent.
Narrowing it down to one sector, audit has been extremely hard on employees. With a very high turnover rate, it’s almost hard to replace so many employees every year. That really brings two things into question. Why is there so much turnover in audit and how can the demand for accountants be met?
The turnover in audit always goes back to the same problem. The hours can be crazy. Most auditors survive a few busy seasons, but the population of accountants that survive many busy seasons decreases. It’s not uncommon for accountants to work one or two busy seasons, and then realize that audit is not for them. They usually move on to taking a private accounting job and leave the firm in search of a replacement. With so much turnover, let’s look at how some of the firms, and especially the big for are meeting the demand for accountants.
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The Market Demand of Accountants (The Effect on Pay)
One of the solutions for accounting firms that need a greater supply of accountants is raising the pay. While there have been inflationary increases and midyear bonuses at some firms, the overall pay for accountants has been increasing but this makes sense.
Firms can’t expect to be lower staffed and pay the accountants, the same amount when there is a lot more work to go around. Thankfully, the big four has to lead a little bit of a trend to increase accounting pay. Smaller firms aren’t much farther behind them.
At the end of the day, pay is the one incentive that will get accountants to go back to public accounting after they have left for private accounting. Everyone has a certain number in terms of the salary required to work public accounting hours. For some, it is higher than others.
Are More CPAs Needed?
It’s not just more accountants that are needed but a supply of qualified CPAs are even more important. Just because there are a lot of new accounting majors. Every year, it doesn’t mean that everyone goes into public accounting. Even if they do, many stop taking the CPA exams after failing a few parts. Not everyone makes it through those exams.
Well, there isn’t really a solution for the shortage of CPAs, all that firms can do is compete for the CPAs that are out there on the market. Otherwise, they can try to bring on young staff and work them up until they are CPAs but the bottom line is that more CPAs are needed in accounting.
The Long Lead Time to New CPAs
We’ve mentioned it before, but becoming a CPA takes anywhere from 6 to 9 years on average. This considers the time from starting college to finishing exams. That being said, it leads to a limited supply of accountants coming out of college every year. Out of the graduating, accounting majors, not everyone is going to even pursue a CPA. For the ones that do it can still take quite a bit of time to get licensed.
One of the main concerns of firms right now is how long it takes for new CPAs to get licensed. It’s a valid point as older CPAs are retiring, but there shouldn’t be an incentive to lower the standard of new CPAs just based on a short supply. It will certainly be interesting to see how this plays out in the coming years.
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What Does the Future Look Like for Accountants
The future for accountants looks like it is moving towards more flexibility. This has really been needed for a long time in the accounting industry. A lot of firms are moving away from the white-collar norm and are transitioning to a more casual in office or remote environment.
While remote accounting has been a thing for the past few years, it is becoming more popular than ever. Employers are offering it as a perk to accountants, and even offering some positions to work from anywhere. While the demand for CPAs and accountants remains high, we would expect quite a bit of flexibility from accounting firms with their employees. This may only increase over time as wages continue to rise as well.
Are Robots Going to Replace Accountants? (What About Artificial Intelligence?)
Sometimes there is talk that robots or artificial intelligence will replace accountants. While AI will streamline accountants day to day job, it won’t fully replace the thinking brain of an accountant. At least not anytime soon.
While they’re already is AI being employed in the big four, it can’t fully do a job from start to finish. Plus, there is always a human reviewer for any AI work.
Expect to see the next biggest shift in online bookkeeping and easier financial reporting.
Why Accountants Will Always be in Demand
The brain. It’s the whole reason accountants will be in demand for such a long time. The entire job involves critical thinking and problem-solving. Plus there is a client-facing side of accounting, which will always put accountants in demand.
People like to speak to other people, and that is very true when it comes to accounting. Clients like to be able to pick up the phone, dial up their accountant and discuss their situation. The demand for accountants right now is very high and it won’t be going down anytime soon.
Are Accountants in Demand? Final Thoughts
Hopefully, now you have a bit of confidence if you were debating on pursuing an accounting degree or switching careers into accounting. It is a very strong field currently and will be for years to come. The displacement of the workforce in the accounting sector should be low, and it will be extremely low if you obtain your CPA.
