4 ways accounting firms can appeal to new professionals

The accounting profession is in the midst of a significant transformation, driven by advancements in artificial intelligence (AI) and automation. These technologies are reshaping the landscape of accounting practices, requiring firms to adopt new strategies to stay competitive.

As the industry evolves, so do the expectations of new tax and accounting professionals seeking to work within it. For accounting firms, adapting to these changes is crucial to attracting and retaining top talent.

According to the Future of Professionals Report 2024, 77% of respondents believe AI will have a transformational or high impact in the next five years, with an average of 56% of all professionals’ work set to use new AI-powered technologies in five years.

The future is bright. Most professionals surveyed foresee more innovation; more time spent on engaging, judgment-based, or expertise-driven work; and greater opportunities for continual skill building.

But how do accounting firms harness this opportunity and use it to attract high-quality candidates?

As evidenced in the 2024 State of the Tax Professionals Report, recruiting and retaining new professionals is a top priority given the shortage of tax and accounting talent and a shrinking labor pool. That’s why many accounting firms are now directing more of their energies toward hiring, training, and engaging high-performing staff, as well as cultivating a healthier, more sustainable work culture.

With the future of the profession in the balance, one thing is clear. To attract and retain talented professionals, today’s accounting firms must adapt their practices to meet the evolving needs of a new workforce. By implementing modern compensation strategies, promoting work-life balance, prioritizing soft skills, offering career development opportunities, and embracing technology and innovation, firms can position themselves as leaders in the industry and desirable places for young professionals to work. Let’s take a look.

4 key employer attributes

Modern compensation strategies

Among the stressors, it’s economic worries that are most likely to keep new professionals awake at night. Thomson Reuters research found that financial stability is the main career goal among today’s new practitioners (94%). Ninety-three percent said a competitive salary is what matters most in an employer.

Firms looking to successfully attract and retain new professionals must ensure they are keeping pace with salary expectations. This, of course, is a challenge for some firms, especially smaller practices with tighter budgets.

For those firms struggling to compete in today’s competitive job market, it is important to ensure no money is being left on the table. In other words, it may be time to rethink the firm’s pricing model (i.e., value-based vs. hourly billing, etc.), increase prices, and/or expand client services to include more higher-margin, higher-value offerings.

Keep in mind that clients will be more willing to pay a premium for services if they understand the value being provided. Know your firm’s value. Communicate your firm’s value. Ensure staff are getting paid for the value they provide. This will ultimately lead to greater profitability for the firm and more money for associates.

Among survey respondents in metro areas, the majority said they were making $80,000 to $99,000. In micro areas (areas with 10,000 to 50,000 people), new graduates reported making between $50,000 and $69,000.

Thomson Reuters research also found that, among new practitioners in metro areas with two to three years’ experience, most are making more than $80,000. Among new practitioners with four to five years of experience, a majority (36%) are making more than $100,000 in metro areas, but only $40,000 to $59,000 in micro areas, and $60,000 to $69,000 in rural areas. Data from rural areas was extremely limited.

The evolution of salary expectations, particularly in metro areas, has led to a more competitive pay scale. To keep pace, firms must offer salaries that reflect the cost of living and the value of their employees’ skills. However, compensation is not limited to base salary alone. Additional benefits such as performance bonuses and equity options make a significant difference in attracting potential hires. These benefits not only provide financial incentives but also create a sense of ownership and investment in the firm’s success.

Work-life balance

Today’s new professionals want to work for a firm where leaders demonstrate that they care about their employees and encourage a greater work/life balance. When considering what matters most to new practitioners in an employer, 85% of respondents said prioritizing work-life balance, according to Thomson Reuters research.

Given this, it is especially important that today’s firms leverage solutions that drive automation, enhance efficiencies, and improve collaboration among both staff and clients. This enables staff to work smarter and faster while providing them the ability to achieve the work-life balance they desire.

According to the research, new practitioners said they currently average 46.1 hours per week working, highest among business leaders (48.6%) and employees at non-accounting firms (48.1%).

Respondents said they would like to average 40.6 hours per week working, a reduction of about 12%. Practitioners at accounting firms with under 30 accountants were the most likely to say they want to work less than 40 hours per week (62%).

Fortunately, AI-powered technologies can make this a reality. According to the Future of Professionals Report, respondents projected that AI could free up as much as four hours a week within the next year. That’s an extra 200 hours per year of extra time that could be reinvested into nurturing the coveted work-life balance.

With AI taking on the more mundane aspects of tax compliance, firms can focus more on hiring individuals with communication, collaboration, creativity, and critical thinking skills which are essential for building strong client relationships and fostering a collaborative work environment.

Moreover, these “soft skills” enhance the quality of work and client interactions, particularly in hybrid and remote settings where clear communication and teamwork are vital.

Consider hiring techniques like behavioral interviews, assessments, and feedback to help identify candidates who excel in these areas.

To attract and retain the best professionals, firms must consider their needs and expectations. New practitioners value work-life balance, career development, and continuous learning. They also seek employers that are innovative and embrace technology.

Firms can leverage AI-powered solutions to improve efficiency, reduce workload, and free up time for more meaningful and rewarding tasks. Additionally, firms can invest in training programs, career paths, and diversity initiatives to foster a culture of professional growth and inclusion. By doing so, firms can not only enhance their performance and reputation but also empower their professionals to thrive and succeed.

Career development and continuous learning

To attract and retain top talent, firms must offer robust career progression opportunities. Learning and development programs that align with current industry standards and technologies are crucial for keeping employees engaged and up to date.

New professionals want to work for a firm that can provide long-term job stability.

They also look for employers that are invested in helping them grow professionally and achieve their career goals. In fact, according to Thomson Reuters research, 75% of new practitioners said long-term job stability is a top career goal.

This is good news for firms. However, it is important that firms have the resources and tools in place to empower associates and foster a culture of professional growth and development.

Take, for example, tax research. Firms can spend less time on tax research — while encouraging new professionals to efficiently find their answers and free up senior staff — by implementing a robust tax research tool. This means leveraging a solution that offers intuitive and predictive search capabilities; suggests relevant expert insights and analysis; and is powered by the latest in artificial intelligence, cognitive computing, and machine learning technologies.

While such tools certainly play a role in staff development and efficiency, it is also important that firms rethink their approach to learning by utilizing firm-wide curriculums and embracing blended learning formats — in-house training, conferences, webinars, and online self-study — for greater flexibility.

Additionally, initiatives to increase workplace diversity and inclusion efforts ensure a welcoming environment for all professionals. By fostering an inclusive culture, firms can benefit from a wider range of perspectives and ideas, ultimately leading to more innovative solutions.

The reality is that firms that overlook the importance of a culture of learning and development risk losing those practitioners who demand growth opportunities. Plus, if competency or effective communication is lacking in a firm’s professionals, firms also risk losing clients to the competition.

Technology and innovation in practice

Embracing AI-powered tax technology can streamline workflows and open new career paths within firms. The integration of AI and automation tools allows for more efficient and accurate accounting processes. This not only reduces the burden of manual tasks but also provides opportunities for professionals to focus on more strategic and analytical work.

According to the 2024 State of the Tax Professional Report, the use of AI-powered tax solutions is still relatively low at most tax and accounting firms. Fewer than one-quarter (24%) of respondents said their firms use AI at all; and among those that do, the most common usage was for research.

That said, 35% of respondents to this year’s survey said their firms would invest in some form of AI over the next two years, although few (7%) cited AI as a top investment priority.

The survey also uncovered the unsurprising fact that many tax and accounting firms continue to struggle with the need to drive more efficiency. This challenge is amplified by the shortage of qualified candidates, not only in tax skills but also in technology skills.

With a limited talent pool, many firms are increasingly relying on technology to enhance the speed and accuracy of their work, ultimately delivering higher-quality services to clients. Central to this push for efficiency is the need for tax firms to integrate automation into nearly every aspect of their operations.

By utilizing AI-enabled tax software to improve workflow processes, your firm can move away from mundane and repetitive work and shift your focus to more value-added tasks like providing strategic advice and building deeper relationships with clients. AI can also help your staff members leverage data more effectively, supplying insights, predictions, and recommendations that can help you find new opportunities and proactively solve problems for your clients.

In addition, an AI-powered tax research solution can empower even junior staff members to answer complex client questions quickly and accurately — without having to bog down senior colleagues for approvals.

By staying at the forefront of technological advancements, your firm can attract tech-savvy professionals and create a dynamic work environment that encourages innovation.

Conclusion

There’s no doubt that new accounting and tax professionals have entered the profession in a completely different world than their predecessors. This has impacted not only their priorities but how they want to work.

To remain competitive in a challenging job market, firms must find ways to appeal to today’s new professionals who are increasingly focused on work-life balance, career development opportunities, and embracing technology and innovation.

Firms that overlook the importance of these attributes risk losing top talent to rivals who are heeding the call. Where does your firm rank?