Long before the Great Resignation was a thing, major accounting firms struggled with high turnover and regular raids on their ranks, often from their own clients. Companies now also have to deal with a decreasing number of college students interested in the profession.
“We are seeing a decline in enrollment for students pursuing accounting studies. Over the past two years, this decline has been dramatic in some major universities that have produced the most graduates, 50% in one year,” said Sharon Lassar, director of the School of Accountancy at Daniels College of Business. University of Denver.
The decline in DU has been smaller, but enrollment in accounting remains lower than it was five years ago. For a variety of reasons, some of which are not entirely clear, the accounting profession is no longer appealing to young Gen Z adults as it has for previous generations.
“These days, students are looking for careers with a purpose or in which they feel they can have an impact on society. It’s hard for young people to see the importance of providing good accounting information to protect our capital markets and our economic activity,” Lassar said. But she adds that the profession is essential to the proper functioning of the economy.
Although the University of Colorado at Boulder hasn’t suffered a drop in the number of accounting graduates, the program is not keeping pace with the increase in enrollment at the Leeds School of Business, said Steve Rock, associate professor Accounting and Chairman of the Professional Efficiency Division at Leeds. .
Rock said students need 150 credit hours to qualify to take the exam to become a certified public accountant, or CPA, a key certification for advancing in the field. If they don’t arrive with college credits from high school, it may add an extra year of study. With the reduction or disappearance of the salary premium that accounting used to offer, more and more students are carrying out a cost-benefit analysis and choosing other business majors.
“Accounting students generally earned the highest salaries coming out of business programs. All other programs have increased their salaries. There’s no more that salary premium,” Rock said.
Accounting firms also had a reputation for hiring the best business school graduates and working them hard to see who would come out of that “tournament,” Rock said. But these survivors, once they have developed expertise in a particular business or industry, are highly sought after in the corporate world. A job at an accounting firm often serves as a stepping stone to bigger and better things rather than a career destination.
Prior to the pandemic, employee turnover at the largest accounting firms averaged 17% per year, and one in six firms experienced turnover rates above 20%, according to the CPA Journal. High turnover has been built into the business model, but in a tight labor market with fewer entrants, this approach is simply not sustainable.
“It can be a big chore in terms of hours. People, as they progress in their careers, are looking for a better work-life balance,” Rock said. And across industries, the pandemic has caused people to re-examine what they were willing to put up with.
Accounting firms have become more aware of the need for a better work-life balance, are more accepting of remote working arrangements and have recruited a wider range of candidates as they attempt to create a more welcoming environment for women and other underrepresented groups. And they are still missing.
“The talent shortage has gotten so bad now that service providers, accounting firms, are able to turn down work,” Lassar said. This is particularly harmful to the public sector, which relies on competitive bidding to secure suppliers.
KPMG’s cultural shift
Last year, more than 24,000 people in the Denver metro area worked as accountants or auditors, and Denver’s concentration in this occupational group is 76% higher than the concentration seen in the U.S. workforce, according to U.S. Bureau of Labor employment and occupational wage statistics. Statistics.
Mike Bearup, managing partner of KPMG’s Denver office since 2010, has earned a reputation as an executive who can handle the workforce challenges facing the accountancy industry, so much so that KPMG promoted him as managing partner in charge of culture for all its operations in the United States. in July.
Bearup hands over the reins in Denver to Brandon Wilcox, himself a longtime company veteran who has been in the city since 2009. Under Bearup, the Denver office has doubled in size over the past 12 years and is the first destination for KPMG staff transfers.
Culture may seem like an amorphous term, especially in an industry used to dealing with hard numbers, but it has become a key ingredient in recruiting and retaining workers, Bearup said.
Measured globally, Deloitte was the world’s largest accounting firm last year with 345,370 employees, followed by EY, formerly known as Ernst & Young, with 312,500, and PwC with 295,731. and finally KPMG with 236,000 employees, according to the Statista website.
In metro Denver, KPMG has 1,120 employees, second only to Deloitte. This number includes 377 listeners, making it the leader in this field locally. But the most important line for the company in terms of employment is consulting, in part because of the KPMG Ignition Center, which Bearup helped launch in Denver in 2015.
The center, now deployed company-wide, brings together employees with different skills and provides them with state-of-the-art technology. It emphasizes taking a more collaborative approach when it comes to helping customers operate more efficiently through automation, artificial intelligence, blockchain and other innovations.
“The council has grown like crazy in Denver,” Bearup said.
Some of these same technologies are also being deployed to make accounting jobs more interesting by eliminating more time-consuming and repetitive tasks. AI programs, for example, can wade through long leases and extract the key phrases useful to a listener, avoiding mindless page-turning. The software can also model complex tax law changes, allowing tax practitioners to provide more accurate recommendations.
Accounting currently emphasizes environmental, social, and governance, or ESG. Companies, for example, must disclose more detailed information on their environmental impact on the climate. This requires designing new methods and standards to measure and report these impacts.
“Our people here in Denver are passionate about it,” Wilcox said, adding that the new field is a good fit with many young adults’ desire to make a positive difference in the world.
To adapt to the new realities of remote working, the company has adopted a “flex with purpose” policy. Employees are welcome to come in when there’s a purpose or need for them, but otherwise they have the option of working remotely if they prefer, Bearup said.
But there’s also a realization that being away from the office can make it harder for new hires to absorb a work culture and bond with colleagues. To this end, the company organizes a monthly barbecue and brings in a barista every week. Maybe no one wants to do Monday through Friday at the office, but what about Tuesday through Thursday?
Just as accounting firms help their clients be creative when it comes to finding solutions to the challenges they face, they will need to innovate when it comes to recruiting and retaining talent.
“The labor shortage is here to stay,” Bearup acknowledged.