Bryan once dreamed of exploring the cosmos, not crunching numbers. His bedroom was a constellation of glow-in-the-dark stars, and his bookshelf overflowed with NASA photo books. But when he announced his decision to major in accounting, his parents gave him “the look.” To them, it seemed an uninspired choice for someone with such grand dreams.
The Truth About Accounting Jobs
Accounting has long been associated with a certain drudgery. Think of the typical accountant: a meticulous figure in a cubicle, obsessed with taxes and financial statements. This stereotype has grown more outdated as the industry faces a severe shortage of professionals.
Here’s why the profession is in trouble:
- Declining Interest: Fewer students are graduating with accounting degrees. The American Institute of Certified Public Accountants (AICPA) reported a drop from 79,000 graduates in 2011 to just 65,000 in 2022.
- Certification Challenges: Becoming a Certified Public Accountant (CPA) requires a master’s degree, passing a gruelling four-part exam, and accumulating a year of work experience. It’s a tough and costly journey.
- Aging Workforce: Many current CPAs are nearing retirement. In 2019, three-quarters of US CPAs were at or close to retirement age.
The Impacts of the Shortage
The shortage isn’t just a minor inconvenience. It has tangible consequences:
- Corporate Reporting Issues: Companies like Advance Auto Parts and Tupperware have faced delays and errors in their financial reporting due to high turnover and skill gaps in their accounting departments.
- Increased Workload: Fewer accountants mean those who remain face larger workloads, which can lead to burnout and further attrition.
Why Is Accounting Losing Its Appeal?
The accounting profession is struggling to attract new talent. Here’s why:
- Low Starting Salaries: Entry-level accountants often earn less than their counterparts in other finance sectors. For example, Bryan’s starting salary is $72,000, while entry-level investment bankers can earn over $100,000.
- Unsexy Reputation: The field lacks the glamour associated with high-profile finance jobs. Accounting isn’t as flashy as investment banking or tech startups, and that’s a turn-off for many young job seekers.
Key Factors Driving Away Talent:
- Perception vs. Reality: The job’s true nature can seem mundane compared to its more exciting counterparts. Despite opportunities in forensic accounting or corporate auditing, the general perception remains unappealing.
- Social Media Influence: Gen Z, who grew up with social media, are drawn to careers that seem more exciting or glamorous. Accounting’s low Instagram factor doesn’t help.
Potential Solutions to Revive the Accounting Profession
To address the shortage, several strategies are being explored:
- Increase Salaries: Many experts agree that raising salaries is crucial. Richard Rampell, a retired CPA, believes higher pay could attract more qualified candidates.
- Enhance Education: Making accounting education more engaging could help. For example, incorporating practical applications like blockchain technology into the curriculum might spark interest.
- Streamline Certification: Simplifying the certification process could also attract more candidates. Some firms are experimenting with alternative pathways to certification, like EY’s Career Path Accelerator program.
How Firms Are Adapting
Some firms are already taking steps to address the shortage:
- PwC: Margaret Burke from PwC mentioned that the firm has increased entry-level salaries and offers performance-based raises and bonuses.
- NYU’s Stern School of Business: Amal Shehata is working to make accounting education more relevant and exciting, focusing on practical applications and funding for students.
The Road Ahead
The accounting profession faces a pivotal moment. With a dwindling workforce and increasing demands, it’s crucial to modernise both the perception and practice of accounting. Here’s what needs to happen:
- Boost Salaries: To compete with more glamorous finance jobs, accounting firms need to offer competitive compensation.
- Revamp Education: Make accounting education more engaging and applicable to current technologies.
- Simplify Certification: Streamline the process to make it more accessible.
As the landscape evolves, there’s hope that the profession can adapt and thrive. The key will be balancing tradition with innovation to attract and retain new talent.
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