The accounting industry is facing a unique challenge: fewer individuals are choosing accounting as a career path, and those who do often look for an exit shortly after entering the field. This phenomenon, known as the “labor cliff,” compounded by the retirement of baby boomers, has left many firms struggling to attract and retain top talent. It’s not just about entry-level talent; experienced professionals are also exiting the workforce in large numbers. As the workforce landscape continues to evolve, it’s critical for firms to understand this shift and position themselves to adapt.
1. What Is the Labor Cliff?
Over the past few years, the accounting profession has seen a sharp decline in individuals pursuing the field. The perception of accounting as a cyclical, demanding, and often repetitive career is turning away potential candidates. Many professionals are seeking more forward-looking roles in financial planning, analysis, or even mergers and acquisitions—positions seen as more dynamic and challenging.
The result? Fewer professionals are staying in traditional accounting roles, leading to a talent shortage. This cliff is especially problematic for firms that rely on a steady pipeline of CPA-qualified professionals.
2. How This Shift Is Impacting Firms
The labor cliff isn’t just a short-term issue—it’s an ongoing challenge that could have long-term repercussions for accounting firms. Traditionally, firms sought talent with a CPA and a few years of public accounting experience. However, that talent pool is shrinking.
Additionally, the pandemic has further complicated the landscape. Many candidates who joined the workforce remotely missed out on valuable in-person client interactions and hands-on analytical projects. Firms are now recalibrating their expectations and realizing they may need to invest more in training and development.
3. What Can Firms Do to Stay Ahead?
Firms need to rethink their approach to recruitment and retention. Here are a few strategies that can make an immediate impact:
Invest in Career Pathing: Employees today want more than just a job—they want a career with opportunities for growth. Firms that clearly outline potential career trajectories, including hybrid roles that mix accounting and finance, will stand out in the marketplace. Offering opportunities to cross-train or shift from accounting to finance roles can create a more engaging career path and reduce turnover.
Reevaluate Compensation and Benefits: In a competitive talent market, even a small increase in compensation or additional perks can make all the difference. Firms should explore creative ways to attract candidates, including more flexibility, hybrid work arrangements, or increased support for continuing education.
Offer Certification Support: Many firms are looking for candidates who are pursuing or have completed their CPA. To remain competitive, companies should offer financial support for obtaining certifications, such as covering CPA exam costs. This investment in employees can enhance retention and draw in candidates looking for firms that are willing to support their professional development.
Embrace Career Changers: Don’t limit the talent search to traditional candidates. Professionals with degrees in economics, finance, or even unrelated fields who have transitioned into accounting can bring valuable experience to the table. Firms that are open to training and supporting career changers will find a broader and more diverse talent pool.
4. Looking Ahead: The Future of Accounting Talent
If firms don’t adapt, the labor cliff will continue to deepen. However, companies that take proactive steps—such as clearly communicating career paths, engaging students early, and making strategic investments in their current workforce—will be well-positioned to not only survive but thrive.
In the end, the firms that embrace these changes will be the ones that can successfully attract, develop, and retain the next generation of accounting talent.
