DEPOSIT PHOTOS
The number of candidates for the CPA exam dipped to its lowest level in 10 years in 2018, according to the latest AICPA (American Institute of Certified Public Accountants) Trends Report. At the same time, the AICPA estimated that – as of 2020 – 75% of its members were eligible to retire.
Does this mean a CPA drought is ahead? Actually, it’s here already, according to some experts.
For Tifphani White-King, a principal and National Tax practice leader at the international audit, tax and advisory firm Mazars, the shortage hit home when a colleague at a peer firm mentioned that “a tax professional left to become a TikTok star,” after realizing they were earning about $60,000 a year “for spending one hour a day on the online platform.”
A CPA shortfall has persisted for at least a decade, she noted, but it’s gotten worse as the path to the top doesn’t offer the guarantees it used to. “You’ll always have a job as an accountant, but the partner-level security has been eroded. At one time a retired partner could count on a significant buyout or other income stream, but as people live longer firms can’t support the same level. CPA firms need to focus more on these kinds of issues.”
White-King
White-King also pointed to a series of surveys that indicate a growing number of people don’t view CPA certification as being as important as they used to. According to a state and national survey released in 2021 by the Illinois CPA Society, 15% or fewer of respondents older than 22 plan to become CPAs. And while a CPA generally establishes a degree of “instant creditability,” according to White-King, it’s just not as important in some cases. The Illinois report, for example, highlighted a 2020 Wall Street Journal article that noted just 36% “of CFOs at the 1,000 largest U.S. public companies were CPAs in 2019, which is the lowest figure in the six years Korn Ferry has collected the data.”
To attract and retain qualified people, Mazars is working with human resources, diversity and inclusion and other professionals to ensure its pay and hiring practices remain competitive, “and we also try to keep people motivated, engaged and happy with mentorships and other formal and informal programs. A long time ago I noticed those people who came in smiling and those who did not. I want my teams to be happy.”
Other CPAs are also sounding the alarm. “No CPA firm has enough people,” said Glenn Friedman, co-managing partner at Prager Metis CPAs. To a large degree, that’s due to the AICPA itself, he added. “Some years back, in a bid to elevate accounting educational standards to more closely represent those for lawyers and doctors, the AICPA instituted a 150-credit hour educational requirement. At the time I said it was a bad idea, because it meant more barriers to entry, and that – along with a relaxation of the requirement to work for a CPA firm for two years – meant that fewer people choose to work in a CPA firm.” In New Jersey, besides passing the national CPA exam, a CPA candidate generally needs one year of experience in the practice of public accounting or its equivalent, under the direction of a licensee, according to the NJCPA.
Tech to the rescue
But the news is not all bad. “Between technological advances and COVID-related remote work requirements, the whole country is now open for recruiting regardless of your physical location,” he added. “We’ve hired people from places like Chicago, Arkansas and Atlanta. And many firms are also hiring qualified people from India, the Philippines and other competitive-cost locations to take on some work.”
Friedman
CPA firms are also shifting their business model. “The development of artificial intelligence means that CPAs will be doing less compliance and review work and will be able to deliver more high-level advisory assistance,” Friedman said. “So having a reduced number of candidates isn’t necessarily bad. But the profession will have to adapt.”
Some firms have already taken steps to adjust. “I remember when just about everyone at a firm would study and sit for the CPA exam,” said Ren Cicalese, managing shareholder at Alloy Silverstein Accountants and Advisors. “But today, if you pressure people to take it, they’re likely to quit. So finding new staff is a full-time job. We never used headhunters before, but now we are.”
Cicalese
Cicalese said he is also looking beyond traditional help-wanted ads. “I’ve been at restaurants and other locations, and when I see someone who displays a good work ethic, I ask about their educational background. You’d be surprised at how many are finance or accounting majors, and I’ve been able to hire some. After all, when you get right down to it, at some level we’re all in the client service business.”
Phillip Goldstein, the CEO of Goldstein Lieberman & Co. LLC, observed that his profession involves “meeting a lot of deadlines, including taxes, financial statements, SEC reporting, sales, and payroll taxes. So we usually put in long hours, and many of the younger generation just aren’t interested in doing that. And I think that the AICPA and the state societies exacerbated the problem when they rolled out the 150-credit hour requirement.”
Still, Goldstein’s firm is bringing in new talent. “We’re fortunate enough to be right around the corner from Ramapo College, and we have a huge internship program,” he said. “And at the other end, unlike some forms we do not have a mandatory partner retirement age. If you’re still sharp and want to work, why should we push you out?”
To retain people — “tax season is still a killer,” he noted — Goldstein Lieberman offers competitive salaries and benefits, advancement opportunities, and flexible schedules. “We also promote a collegial team environment, and we try to help people to enjoy themselves. No one ever says, “I’m too busy to help.”
During busy times, the firm also brings in meals and massage therapists and engages concierge services to run errands for employees. To promote a team spirit, the firm also sponsors dinners and trips to sports games, concerts and other outings — although the COVID pandemic put a dent in that. “It’s an investment, because this way we’re able to attract and retain qualified people, and people are happy they’re more effective,” noted Goldstein. “But it’s also more pleasant to work with smart people who enjoy what they do.”
Carnevale
Ted Carnevale, co-leader at the New Jersey office of the accounting and advisory firm Grassi, has also felt the pinch. “Across firms, it’s getting harder to find licensed CPAs, and fewer people are sitting for the exam,” he said. “We try to hire new accounting graduates and then train them, coach them and otherwise try to get them to stay with our firm. Salary and benefits are part of the attraction, but we also maintain team-building and other programs to foster a collegial environment.”
A different take
Not everyone agrees that a shortage of CPAs exists. “Through our hiring efforts, we are currently not seeing a crimp in CPA candidates,” according to Theresa Richardson, a partner and chief talent officer at Withum. “Our entry-level candidates are continuing to pass the exam as fast as possible, and we continue to find quality CPA candidates in our recruiting efforts.”
To attract and retain CPAs, Withum starts “by providing a culture and benefit that promotes passing the exam as quickly as possible,” said Richardson. “In terms of benefits, we help our team members in many ways to pass the exam. We help with providing discounts for CPA review materials, financial help with paying for the materials, time off to take the exam and financial rewards when someone passes the exam. The sooner someone passes the exam, the greater the bonus for passing.”
Richardson
At the same time, at Withum “and in most in the industry, you cannot be a manager without your CPA license. So, if you are interested in making it to the higher ranks of the firm, obtaining your license is key.”
Professionals at Marks Paneth are also upbeat about the CPA pipeline. “We do a lot of college recruiting and we’re seeing a fairly consistent flow of candidates,” said Richard Jania, partner-in-charge of the accounting and advisory firm’s New Jersey office. “There’s an expected number of retirements at the partner- and staff-level, but many of our new recruits stay and grow within the firm. We have succession plans, and as existing partners transition new partners come in.”
Marks Paneth Director of HR Steve Sacks has noticed a slight uptick in people leaving for corporate accounting but pointed out that the firm attracts a steady stream of applicants, including “college interns who get hired and advance from associates to seniors and, if they’re qualified, ultimately to partners —Rich joined the firm more than 20 years ago and followed this path.”
Added Sacks, “At Marks Paneth we try to develop a sense of community. Pre-pandemic we had events like Taco Tuesday, kickball teams and other social activities during busy season. Now we buy lunch and dinner for people while they’re working remotely, and we offer virtual classes on topics like mixology and yoga. It’s all about achieving a work-life balance to make things a bit easier for everyone.”
