Accounting corporations are working into difficulties filling the pipeline with new accountants as they discover themselves struggling to recruit expertise.
On the Illinois CPA Society’s summit this week, ICPAS president and CEO Todd Shapiro mentioned the issue in gentle of figures from the American Institute of CPAs. “We’ve seen some disturbing issues within the pipeline,” he mentioned throughout his keynote handle Tuesday.
He pointed to the AICPA traits report from 2019 primarily based on 2018 information displaying a 7% decline in first-time CPA Examination candidates since 2017. The variety of CPA Examination candidates who handed the fourth part of the examination decreased 6% between 2017 and 2018. He in contrast it to earlier declines.
Illinois CPA Society president and CEO Todd Shapiro with ICPAS chair Tom Murtagh, a companion at BKD CPAs & Advisors, on the ICPAS Summit
“What shocked us was 2018,” mentioned Shapiro. “Take a look at 2011. It dropped, however then it got here again. In 2018 it fell and what we don’t see is the 2019 numbers, which I’ve been aware about. The 2019 numbers are the identical as 2018, so that may be a concern for us after we’re seeing numbers are falling. What’s inflicting the drop? By the way in which 2020 goes to be a waste of time as a result of the testing facilities had been closed for many of 2020. So once you take a look at 2018, it fell to 36,000. In 2019, it was about 36,000. 2020 might be one thing under that. We gained’t know for some time, however I’m actually fascinated with what occurs in 2021. What’s inflicting it? I believe it’s relevance to younger folks when they consider the career and changing into CPAs.”
He famous that in a survey by Korn Ferry of the highest 1,000 largest U.S. corporations, solely 36% of the CFOs had been CPAs. “I believe that’s the tip of the spear,” mentioned Shapiro. “It’s a number one indicator. We noticed this earlier than. In 1998, there was quite a lot of dialog about how the career is in bother, folks aren’t changing into CPAs and so forth. After which it modified.”
It might take some time for the accounting career to show that round. “It’s not going to vary in a single day, and the pandemic did nothing to assist the development,” Shapiro mentioned in a later interview. “I haven’t seen the numbers, however I count on 2020 might be down from 2019 simply due to the challenges with signing as much as truly take the examination.”
He pointed to a latest column by Ken Bishop, president and CEO of the Nationwide Affiliation of State Boards of Accountancy, in a NASBA e-newsletter that known as for focusing extra on the declining pipeline of CPA candidates. Shapiro believes the causes for the decline should be addressed, together with the surprisingly low beginning salaries supplied to many younger accountants who’re graduating from schools and universities.
“Beginning salaries are flat and so they’ve been flat for quite a lot of years,” mentioned Shapiro. “I used to be speaking with some accounting division chairs, and one in all them made a remark that they discuss to freshmen about careers in enterprise and so they mentioned accounting was the third lowest beginning wage. So are we seeing a change in pipeline? I’m going to guess no. As a result of if it is relevancy, if it’s employers not requiring it, if beginning salaries are flat, till we start to vary these causal elements, you’re not going to see a change within the pipeline. What we’re seeing, I believe, is extra embracing of the problem.”
He mentioned he has heard constructive feedback from AICPA officers about his highlighting of the problem, together with NASBA’s latest feedback.
ICPAS’s new chairman is Tom Murtagh, a companion at BKD CPAs & Advisors, which has been actively recruiting younger accountants. “I really feel like our pipeline facility has been fairly robust,” he mentioned in an interview. “We have got a extremely sturdy campus recruiting staff creating actually good relationships with the campuses. We’re an excellent various for college kids who possibly have a notion that going into the Huge 4 is sort of like being a small fish in a giant pond and possibly not having the ability to be an impression participant immediately. I believe our college students who need to be somewhat extra engaged and invested with purchasers earlier on of their profession take a look at it as an excellent choice for that. The good factor, too, is we will go to campuses as a result of we’ve bought a footprint across the nation. We will have, say, our Indiana-based recruiting staff possibly down at [Indiana University]. There are quite a lot of college students from Chicago who go all the way down to IU. That helps us draw present college students again in, so I believe the pipeline coming in, for us anyway, is we’re actively managing it and it looks like we’re getting a good shake at getting college students on board. I believe the problem actually, then, goes ahead, as college students convert to being full-time accountants. Is the profession that they are working in offering them that means and relevance for the long run? For us, it’s about retention. I really feel like this has been a difficulty as previous as time. You may have a three- to five-year one who begins to guage what the following step of their profession goes to seem like. Determining methods to assist them see the worth that they’ll deliver is actually crucial, and serving to them see what an fascinating profession path seems to be like for them that will get them past that entry-level work.”
He has plans as the brand new chairman at ICPAS to assist accountants deal with the lingering pandemic. “The point of interest of what I’d prefer to proceed to speak about over the following 12 months is simply this transition from the place we had been to the place we’re going,” mentioned Murtagh. “After I was invited to change into the chair, I believed it could be like a post-pandemic surroundings, and what does that seem like? And clearly, we’re not submit pandemic. Throughout this pandemic, it’s serving to practitioners and people throughout the state sort of suppose it by way of. Todd talked about it rather a lot on this presentation at this time, that we’re not going backward. Whenever you take a look at the statistics of individuals shifting jobs and searching for alternative, to me, the thought of flexibility and integration of individuals’s work life and their private life and household lives, along with fascinated by the soul looking out that folks have executed during the last 18 months. I’d prefer to be engaged in conversations round that with the practitioners across the corporations. I’m lucky to be in a corporation the place we’re having these conversations internally.”
BKD has about 40 workplaces throughout the nation the place it has been serving to purchasers deal with the pandemic. “Loads of our workplaces are actually small markets,” Murtagh mentioned in the course of the keynote handle on the summit alongside Shapiro. “We have now an workplace right here in Chicago and in New York, however we even have an workplace in Enid, Oklahoma. These usually are not like powerhouse markets. And people purchasers, these family-run companies are searching for recommendation as properly. Even after I was half of a big native agency, what differentiated us was the power to offer some consultative recommendation. And we see that fairly usually in our shopper surveys. We’ll ask what can we be doing extra? They might be very proud of our timeliness and compliance and assembly the deadlines, and that type of factor, however fairly often we get that little additional ‘I simply want you possibly can be somewhat extra strategic, simply deliver somewhat extra proactivity to the desk.’ And I give it some thought within the context of what we had been all coping with over the previous 12 months, with the PPP program and the worker retention credit and I believe our purchasers checked out us and mentioned, ‘That is wonderful. You’re giving us tons of nice data, maintaining us apprised of a really fast-moving course of right here.’ However when it then got here all the way down to how will we combine PPP right here and the worker retention credit score, at that time we needed to transfer past simply being trusted and we needed to be extra strategic. We had to have a look at the numbers and the place will we do the cutoff traces so we’re not overlapping and we’re maximizing the advantages of these two issues. It’s a small instance, however that impacts each small enterprise that was taking part in these two packages.”
Attracting a extra numerous group of accountants has change into extra essential for corporations, however Shapiro feels he hasn’t seen sufficient progress on that entrance but. “The problem is it is going to take time, and so endurance is a advantage,” he mentioned. “After I got here into my job in 2013, we checked out what number of black and Hispanic accounting majors there have been within the state of Illinois, and it wasn’t rather a lot, particularly as a share of whole accounting majors. My private purpose, which wasn’t given to me by the board, was to double that earlier than I retired, which is developing in lower than 18 months now. Of all of the issues I wished to got down to do after I grew to become CEO, that purpose is not going to be met. I far underestimated the challenges in constructing the pipeline. We’re competing. It might assist that accounting goes to change into a part of STEM relating to analysis {dollars}, nevertheless it’s going to take time. I believe extra is being executed now than ever earlier than. You may have EY popping out with a giant program, and Deloitte popping out with large packages. I believe that is going to assist. However I believe rising our pipeline goes to take time. We’re lacking a complete lot of potential CPAs. In highschool, particularly a various highschool, they’ll hear about whether or not they need to change into an engineer, whether or not they need to change into a lawyer or a health care provider or an funding banker, you title it. So the bottom line is relevance. How do you make this actually engaging and fascinating to someone who doesn’t know something concerning the career? They don’t have a mum or dad or an uncle or a member of the family who’s been a CPA. I believe that we’ll make progress, and I believe that can assist with the pipeline. All of that is going to take time, however it is going to take a concerted effort.”