What does the talent shortage in accounting and finance mean for businesses and workers?

There’s a talent shortage in the accounting and finance sector – and it’s not going away any time soon.

According to AICPA, 2018 saw the lowest number of candidates taking the CPA exam in a decade – and it’s fallen a further 12% since then. The number of successful candidates has also fallen; there were 5.5% fewer passes in 2021 than 2020. 

Fewer students are graduating with accounting degrees, too. According to the AICPA’s most recent Trends Report, the numbers of graduates at the bachelors’ and masters’ levels fell in 2020 by around 3% and 8% respectively. 

A shrinking intake isn’t the only factor at play, however. This shortage could be set to grow in the future, as older CPAs begin to retire. The average age of a CPA in the US is 52-53 years old. Given that many accounting firms mandate a retirement age of 65 or 66, this suggests most CPAs are set to retire within the next decade or two. 

This gap is exacerbated by a growing demand for accounting and finance professionals. Of firms that hired one or more accounting graduates in 2020, almost three-quarters expected to hire the same number or more in 2022 as they did the previous year. Our research predicts the employment of accountants and financial analysts will grow 7% and 6% respectively over this decade.

Supply and demand

This poses a clear challenge hiring managers – and it’s good news for candidates with the right skill sets. This supply/demand gap is exerting upward pressure on salaries, as well as candidates’ expectations, but not everyone has worked this out yet. 

“Clients are offering new hires [significantly] less because they think the economy warrants it,” says Simon Talbot, National Brand Strategist, Accounting & Finance at LHH. “In reality, there is a critical shortage in the supply of accountants. Companies need to be prepared to pay qualified candidates market value - if not more.”

In fact, the shakiness being felt throughout the global economy today hasn’t had a major impact on the accounting and finance sector jobs market, which remains relatively healthy. This is due in part to the fundamental importance of these roles; after all, even in a downturn companies still need people to close the books and ensure compliance is taken care of. The post-COVID aftershocks are subsiding, too; almost two-thirds of hiring managers say they are backfilling accountancy and finance roles that were lost during the pandemic.

It’s a good time to work in this sector, especially for those with the right skillsets. Candidates and employees should know their worth – and the same goes for their employers, too.

For more insights into the current trends shaping the accounting and finance sector, read our latest white paper here.