Consider this: According to the AICPA, there were almost 50,000 CPA candidates in 2010. That number dropped to slightly more than 32,000 in 2021.
As baby boomers retire and fewer students opt for accounting careers, the accounting profession faces a growing talent shortage, a crisis that requires creative solutions and collaboration across the profession.
On a recent episode of The Accounting Podcast, Jen Cryder, CEO of the Pennsylvania Institute of CPAs (PICPA), shared insights on the talent pipeline based on demographic trends, licensing requirements, and firm culture. Here are the highlights of that discussion.
Solving the CPA pipeline problem requires more than people
Demographic shifts in the United States mean that each generation is smaller than the previous one. College enrollments have declined by double digits over the past five years, shrinking the pool of potential accounting majors.
Jen Cryder is blunt when she describes the situation: “It is not possible to replace retiring CPAs 1-to-1 with new CPAs. You have to think about [the problem] with lots of different layers. You've got to look at demographics, high school and college enrollments, and size of the population."
That means the profession needs to come up with creative solutions to the CPA pipeline problem that go beyond simply increasing the number of accounting students, graduates, and CPA candidates.
Changing licensure laws in every state would take too long
I asked Cryder what she thinks about changing the 150-hour requirement to become a CPA, or offering an alternative pathway that doesn’t require the equivalent of a fifth year of college education.
Cryder says, "It would take far too long and open up way too much risk to change all those laws." In her view, it would require changing the laws in every state, and we simply don’t have 30 years to do that, which is how long it took to put the 150-hour rule in place.
Work-learn models can reduce time and the cost burden of 150 hours
To help alleviate the problem, some in the profession propose blending online courses with on-the-job training. These work-learn models provide rigorous, competency-based development.
“How do we take those pieces that have existed forever and put them together in new ways to buy down the time and the cost of the extra 30 [semester hours of education]?” asks Crider. “The research shows that it's really the time and the cost that are the hurdles.”
Many think Big Four is the only path, but regional firms offer benefits
Many students think the large firm path is the only path worth following—Deloitte, PriceWaterhouseCoopers, Ernst & Young, and KPMG—but regional firms may offer better work-life balance and culture.
Cryder says, "It turned out to be the best thing that ever happened to me," referring to when she joined a regional firm instead of a Big Four after graduation. “This firm was so connected and there was such a strong culture. They would cook us dinner every night during busy season, and we would all sit and eat dinner together. It was amazing.”
The takeaway? Professors and lecturers in accounting should enlighten their students about the benefits of working for regional firms.
Firms must improve work-life balance and reduce workload compression
Public accounting firms must strive to develop sustainable business models that prioritize work-life balance. Luckily, an increasing number of firms are committed to achieving this goal. Cryder explains, "I'm getting the question much more frequently: 'How do I build my firm so that there's not workload compression?'"
Cryder believes that small and regional firms will be the first to figure this out faster “because they are a little more agile to make those changes."
Better data is needed to fully understand and address talent issues
Limited data has constrained the accounting profession's ability to develop solutions to talent pipeline issues. "Until we have much better data, it's hard to find a solution," explains Cryder.
With better insights, the profession can develop targeted interventions at each phase, from attracting students to accounting, to supporting their development and retention as professionals. Tracking metrics will illuminate what initiatives effectively move the needle on talent engagement and pipeline flows.
The profession needs to collaborate more to find solutions
Organizations are working together more than in the past to address talent issues, notes Cryder. "I don't think the profession was collaborating in a way it needed to in the past. I can tell you I've seen that change a lot. I get to participate in a lot of different national discussions.”
This cooperation enables groups such as the state CPA societies to share best practices with firms. Building networks across the profession will help collectively tackle the talent crisis. The shortage requires rethinking how we attract, prepare, and retain accounting professionals. As Cryder emphasizes, continued collaboration and data-driven solutions are key.
