Does finding a qualified accountant these days feel like searching for a needle in a haystack?
2024 has been a wild ride for the accounting sector in the US. Due to the steadily declining number of accountants, organizations are caught in a recruiting & retention pinch that won’t be resolved anytime soon.
If your company is struggling to fill positions in its accounting department, you’re not alone. This crisis has impacted businesses and entire industries across the US. Fortunately, there’s a proven way to survive the shortage: offshore accounting.
Understanding the Accountant Shortage
The great accountant shortage of 2024 is not just a buzz phrase; the phenomenon is real, and many organizations are feeling the crunch.
According to reports:
- There are a total of 1.6 million accountants in the US today, which is 340,000 fewer than there were in 2019.
- The accounting market is expected to achieve a combined annual growth rate (CAGR) of 6.4% by 2030. This projected development may be hindered by the limited supply of talent.
- Around 75% of seasoned accountants had reached retirement age in 2020. The average age of certified public accountants (CPA) in the United States today is 52-53 years old. Since the retirement age for this profession is 65, many more are set to leave the workforce soon.
- There were 2.8% fewer accounting graduates at the bachelor’s level and 8.4% fewer at the master’s level in the 2019-2020 academic year.
- In 2022 only about 30,000 people took the CPA exam, compared with nearly 50,000 people in 2010.
Numerous factors have contributed to the current severe shortage of accounting talent. Unfortunately there’s no quick fix for any of these.
Retirement of Veteran Accountants
Around 10,000 baby boomers retire every day in the United States alone. With a significant number of experienced accountants reaching their retirement age, the industry is losing a substantial roster of skilled talent. The accounting field is under immense pressure to replenish the outgoing talent pool with younger recruits.
Not Enough Students
There has been a sharp decline in the number of students pursuing accounting degrees and CPA certifications. Multiple factors contribute to this loss of interest: the waning attractiveness of accounting jobs, greater opportunities in other fields like IT, and arduous academic requirements.
Undervalued Perception of the Job
Many accountants complain that their work is monotonous, repetitive, tiring, and poorly rewarded. These factors are resulting in burnout, stress, and abandonment of the profession. Many end up exploring greener pastures in fields like banking or technology.
The Impact of the Shortage
A shortage of accounting talent is terrible news for businesses. Without qualified accountant expertise, companies risk the following repercussions:
- Understaffing – The drop in accounting talent has gotten to a point where less than 1% of accounting firms can fully staff their organization. An understaffed accounting team can lead to delayed financial reporting, increased errors, and overworked employees.
- Costlier Services – Due to the limited number of qualified accountants, more companies will have to offer higher compensation & benefits to fill their staffing gaps.
- Professional Burnout – Existing accountants face greater strain in meeting deadlines and fulfilling client expectations, which could result in worse burnout and even more departures from the profession.
- Compliance Struggles – Since fewer accountants are working to complete tasks, organizations might be unable to fulfill their financial obligations. The company’s financial reporting, tax preparation, projections & strategies, and regulatory compliance could all be severely impacted.
Strategies to Get Through the Crisis
The accountant shortage of 2024 is changing the way businesses view the profession. To help your company amidst the chaos, here are some strategies you can adopt:
Raise Salaries and Benefits
Low salaries and poor benefits are among the top reasons why accountants quit. Consider increasing the compensation offers for accountants to enhance the role’s attractiveness. Raising pay and improving benefits can also lower turnover rates.
Integrate Technology
Many successful businesses today integrate technology to streamline their operations. Rather than relying on conventional paper methods or using programs like Excel, consider investing in popular software like QuickBooks and Xero to reduce the workload and stress in the accounting department.
Partner with Recruitment Agencies
Organizations may need support in finding talent, especially as they tackle the challenge of the great accountant shortage. When posting job openings online is not enough, you can partner with offshore recruitment agencies to make screening and hiring faster and easier.
Offshoring: A Breakthrough Solution
The limited number of CPAs in the US is opening the doors to a wider and more diverse global talent pool. Countries like the Philippines have an abundance of qualified accountants ready to fill the gaps of understaffed accounting teams through offshoring.
Offshoring is the process of relocating business processes from the US to lower-cost regions abroad. With the help of offshoring companies in the Philippines, you can find the talents and skills lacking in your country at a much lower cost than sourcing locally.
There are many fantastic reasons why the Philippines is the ideal location to offshore your understaffed accounting department:
Standardized Accounting Processes
Accountants in the Philippines follow GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards).
The Philippine Institute of Certified Public Accountants (PICPA) is also a member of the International Federation of Accountants (IFAC). This means that Filipino CPAs can meet professional standards and regulations applicable to over 130 countries around the world.
Qualified and Licensed Expertise
When you offshore to the Philippines, you will work with knowledgeable and skilled individuals who have successfully passed the CPA board exam. On top of these basic qualifications, licensed Filipino accountants undergo the continuing professional development (CPD) program to maintain their competitiveness in the global field.
English Fluency
Filipinos are among the most fluent English speakers ranking second in Asia and 20th worldwide. Their ability to understand and communicate in English makes it easier to work with them.
Cost-Savings
Offshore accounting in the Philippines can help you save around 70% of costs on labor and 50% on overhead.
Combat the Shortage with Offshored Expertise
The great accountant shortage of 2024 is a worrisome phenomenon for organizations, but smart companies know how to leverage talents beyond borders. Don’t let this crisis slow down your growth. Allow Elite Virtual Employment Solutions (EVES) to help bring your accounting team up to its optimal capacity through our offshore accounting services.
Inquire at (747) 300-3234 or visit https://evesolutions.net/ for additional information.
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