CPAs Would Probably Stick Around If Firms Paid Them More, Let’s Just Outsource Instead

The Pennsylvania Institute of CPAs (PIPCA) has released a new report called CPA Talent Retention 2024: Keeping Your Best Performers, free to read for PIPCA members but we’ll have to settle for browsing the press release.

Their research polled two distinct groups of professionals — entry- and mid-level CPAs nationwide who have left their firm or the profession within the last five years (“Career Changers”) and Pennsylvania CPAs with 3-10 years of experience who are still on the grind (“Current Talent”). The goal? To find out what made the first group dip out and what keeps the second group not only at their current firm but in the wider profession.

“The findings from our latest report emphasize the complexity of talent retention and the necessity for firms to adopt innovative strategies that address both individual and organizational needs,” says Jennifer Cryder, CPA, MBA, CEO of PICPA. “We want to make sure that the ‘Current Talent’ group does not become ‘Career Changers’. This report aims to guide accounting firm leaders towards effective strategies that we believe, when properly implemented, will enhance both retention and firm performance.”

You’ll recall it isn’t only the scary “75% of current CPAs will retire by 2035” AICPA figure nor plummeting accounting enrollments and low CPA exam numbers that the profession is worried about but also a significant number of experienced professionals leaving accounting completely. See: Job Security Isn’t Enough to Keep Many Accountants From Quitting from Wall Street Journal (published Sept. 22, 2023). So making current professionals “stickier” should be as high a priority as recruiting young people into the profession at the high school and college level. So far it’s the pipeline that’s getting most of the attention.

Notable findings from the 323 professionals in the Career Changers group who have 0-15 years of public accounting experience and have left their firm or profession within the past five years:

• When asked to complete this statement “My desire to stay at my previous firm or in the accounting field would have increased if…” the leading response was higher salaries (39.7%).
• Other top responses were: “there were more flexible work options” (35.6%), “entry- and mid-level employees were more valued” (33.5%) and “there were better benefits offered” (30.4%).
• When provided the same statement but specific to work-life balance, the leading response was: “there were more flexible work options around hours and location” (35.6%).

We’re giggling at the inclusion of people with 0 years of experience. Washouts!

And key findings from the 449 Pennsylvania CPAs with 3-10 years of experience in the Current Talent group:

• The majority of respondents (56.7%) stated they have a higher desire to stay in public accounting, with 73% stating they would like to stay with their current firm.
• Career development is a critical factor for retention with 85% of respondents saying their firm actively supports their career development, and 78% saying their firm offers interesting career opportunities.
• Still, the number one response to the question “What would increase your desire to stay at your firm in the accounting field?” was “there were higher salaries” (46.9%), followed by “my working hours were capped” (42.3%) and “there were better benefits offered” (37.4%).

PIPCA’s suggestion is not to pay everyone more. Rather:

With over 70% of CPAs nearing retirement and a notable decrease in accounting graduates and CPA exam takers, the need for firms to fundamentally move away from the traditional “pyramid” model to a more robust “pentagon” model, better leveraging automation, AI, and outsourcing is critical to long-term success. [emphasis ours] This shift reduces reliance on a broad base of entry-level talent, allowing firms to focus on hiring fewer, but better retained staff while fortifying the middle managers with higher compensation and more diverse career opportunities. The PICPA believes this approach not only can help meet client needs effectively but also aligns with salary expectations and improves work-life balance, ensuring high-quality work without compromise.

Petition to use a five-pointed star model instead of a pentagon.

Reading between the lines, or rather the words in the above paragraph as it’s all plainly laid out, they’re suggesting firms move away from the cattle calls of young, disloyal talent that will leave within two years and pivot instead to automation, technology, and compartmentalized outsourced talent to replace them along with “fortifying the middle managers” who’ve been loyal thus far with better pay and career opportunities.

Are we finally living in the disruptive future we were promised?