By Ringside Talent Partners
November 15, 2024
CFOs and finance recruiters have been grappling with a growing challenge: a shrinking pool of U.S. accounting professionals.
For years, labor experts have pointed to a steady decline in the number of accountants and auditors needed to handle essential tasks such as closing quarterly books, completing audits, and ensuring financial compliance with GAAP (Generally Accepted Accounting Principles).
The Declining Pool of Accountants
The statistics surrounding the accounting profession are stark. Although there was a spike in the number of practicing accountants and auditors in 2019, the overall number of accountants has declined by about 10% since 2013, according to the Bureau of Labor Statistics. Additionally, the number of CPA exam passers has hit its lowest level since 2007, with only 18,847 individuals passing the exam in 2022.
Why is This Happening?
Several factors are contributing to this trend:
- Education Requirements: The requirement to complete 150 hours of college credit—equivalent to a fifth year of schooling—before becoming a CPA is a significant barrier. Many students find the additional year burdensome and choose other finance careers that don’t require as much education.
- Lower Starting Salaries: Compared to other areas of finance, entry-level accounting positions tend to offer lower starting salaries, making the field less attractive to recent graduates.
- Demanding Work Hours: The demanding nature of the job, combined with rising regulatory pressures, has led to burnout, causing many practicing accountants to leave the field entirely.
Addressing the Talent Shortage
In 2024, professional associations and lawmakers are working on initiatives to address the talent gap in accounting. One of the more controversial discussions surrounds reducing the 150-hour education requirement. For instance, Minnesota lawmakers are considering a proposal to reduce the credit requirement to 120 hours, which would make it easier for candidates to earn their CPA certification. Similar proposals are being discussed in states like South Carolina and Washington.
The AICPA is also taking steps to modernize the CPA exam. The new CPA Evolution initiative, launched in 2024, includes updated content and structure to better reflect the skills and competencies required in modern accounting, with a greater focus on technology.
Solutions CFOs are Implementing
To meet their staffing needs, many CFOs are employing innovative strategies:
- Salary Increases: To compete for the shrinking pool of accountants, many firms have increased starting salaries. A study by CFO Dive found that over half of accounting firms planned to raise salaries by 14% in 2024.
- Outsourcing: With U.S.-based talent becoming scarce, many firms are outsourcing accounting tasks to professionals in countries like India, the Philippines, and Poland. The pandemic made remote work more commonplace, easing concerns about outsourcing critical functions.
- Remote Work: Remote work opportunities have opened the door to hiring talent from outside traditional geographic areas. Many companies are leveraging remote work as a way to tap into a broader talent pool, which is especially useful for smaller firms unable to compete with larger companies on salary alone(
Conclusion: Turning the Tide
While the accounting profession is facing significant challenges, there are reasons to be optimistic. Efforts to revise education requirements, modernize the CPA exam, and address the profession’s evolving needs are already underway. Meanwhile, CFOs and recruiters are employing creative tactics to fill critical roles and keep up with demand.
Despite the hurdles, accounting remains a vital and evolving field, and with the right adaptations, it can continue to attract the talent it needs for the future.
The recruiters at Ringside Talent can help you find the right talent to fit your current work environment. Learn more here.