Crunch time: How Accounting Firms are tackling the severe talent shortage in the USA

The accounting industry is currently facing a severe shortage of certified accountants in the USA. The situation has become a mounting and sustained concern for many in the profession. According to projections, the demand for accountants and auditors is set to increase by 13% between 2021 and 2031, and?to grow at a rate of 5% per annum -?resulting in an estimated total of 136,400 job openings over this two-year period. This scarcity of qualified professionals has had several detrimental effects, including a lack of expertise, lower productivity, and an increased burden on existing staff to handle the workload.

The Causes of the Shortage?

The shortage of certified accountants in the USA can be attributed to several factors. Firstly, the demand for accountants has been steadily increasing over the past decade due to the growth of businesses and the increasing complexity of tax regulations. At the same time, there has been a decline in the number of students pursuing accounting as a profession. This has resulted in fewer graduates entering the workforce and a shortage of experienced professionals. Despite a 10% increase in regional completions related to Accountants and Auditors from 2010-2021, there was a decline of 12,789 regional completions from 2019-2020 alone. These statistics suggest that efforts are needed to encourage more students to pursue accounting careers to meet the growing demand for skilled professionals in this field.

Secondly, the baby boomer generation is retiring at a rapid pace, leaving a significant gap in the accounting industry. Many accounting firms are struggling to replace these experienced professionals, leading to an even more significant shortage. According to recent data, the Annual Replacement Employment (the estimated number of people retiring or leaving the occupation) for accountants and auditors in the US was 114,730 between 2020-2021. Projections indicate that this figure will rise to 129,627 by 2025-2026 and continue to increase in the coming years.

Thirdly, the pandemic has also had a significant impact on the accounting industry. Many firms have had to cut back on hiring and training due to the uncertainty in the economy. This has made it challenging to attract and retain talent, exacerbating the shortage of certified accountants. Furthermore, the labor force participation rate across all industries in the US has experienced a steep decline, falling from around 63.4% pre-pandemic to 62.1% currently. This drop largely explains the pains employers are feeling, including the shortage of skilled accounting professionals.

Addressing the Shortage with Talent Augmentation?

The shortage of certified accountants in the USA is a significant problem that requires immediate attention. One solution in addressing this problem is talent augmentation. Talent augmentation is the process of outsourcing talent to reinforce your workforce and access expert talent from around the world. By partnering with a talent augmentation company, accounting firms can tap into a vast pool of highly skilled professionals from different parts of the world.

Talent augmentation companies have a vast network of highly skilled professionals who are available to work on short-term or long-term projects. These professionals can provide the expertise that accounting firms need to stay competitive in the market. By outsourcing talent, accounting firms can save on training costs and reduce the burden on their current staff, allowing them to focus on core tasks.

Gain a competitive advantage with on-demand talent?

Together with a talent augmentation company, firms can access a diverse pool of talent, including experts in niche areas of accounting. This can give them a unique advantage in the market and enable them to take on more complex projects.

In addition to the severe shortage of certified accountants in the United States, many accounting firms also face challenges with limited budgets, time constraints, and the need to stay competitive in the market. These challenges make it difficult for firms to maintain the high-quality services their clients expect while keeping up with the latest trends and technologies in the industry.

Extend outsourced talent contracts for business continuity and expand your firm?

One solution to these challenges is by extending current outsourced talent contracts. Over and above the preferential pricing that can be negotiated, the expert talent has already been deployed on a short-term contract, and by now, knows the various nuances and ways of work each firm has, they can become better integrated with the firm’s culture and can deliver higher quality work. The team has spent time together and extending this develops trust and stronger relationships. Continuous high-quality work is another advantage. Additionally, extensions can help firms create a more diverse workforce by accessing a diverse pool of talent from around the world.

The key advantage of extensions is preferential pricing. When a firm enters into a multi-year agreement with a talent provider, they can negotiate better pricing and save significant costs over time. Outsourcing talent can furthermore help firms save money on salaries, benefits, and other costs associated with hiring and training employees, as well as avoid the costs associated with maintaining office space and equipment.

Extensions also give access to growth markets, with a dedicated facility and talent pool to help them expand into these new markets and regions. This can be especially valuable for firms that lack the resources or expertise to do so on their own.

Retain access to skilled global talent through extended outsourced talent contracts?

Extensions also offer solutions to attrition and retention concerns in today's fluid market conditions. Outsourced talent providers have a steady pool of talent sourced globally, so firms can easily replace resignations or poor performers without disrupting their operations. Longer-term deployment also reduces volatility and increases flexibility, which helps firms better plan and manage their operations. Firms can scale their workforce up or down as needed. This approach is especially useful for firms that experience seasonal fluctuations in demand or need to staff up for specific projects.

Extensions can recession-proof a business and enable firms to achieve their growth aspirations. By partnering with an extension provider, firms can access the talent and resources needed to weather economic downturns, continue to grow their businesses, and offer a wider range of services to compete with larger firms without incurring the costs associated with hiring full-time employees.

Leverage talent augmentation to tackle the talent shortage and strategically grow your firm?

In conclusion, the severe shortage of certified accountants in the United States is a mounting and sustained concern for many in the profession. However, by leveraging extensions, accounting firms can tackle the talent shortage and achieve their growth aspirations while providing high-quality services to their clients. Therefore, outsourcing talent and extending contracts with a talent augmentation company is a smart and strategic solution for accounting firms in the face of the ongoing talent shortage.

“Extensions are an essential tool for accounting firms to achieve their growth aspirations and stay competitive in today’s fast-paced business environment.”

- Paula Laurenti, SAPRO Head of Strategic Accounts