The accounting profession is going through a big change because of advances in 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. Many accounting firms are now spending more time hiring, training, and engaging good employees. They're also creating 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.
4 key employer attributes
Modern compensation strategies
Among the stressors, it’s economic worries that are likely to keep new professionals awake at night. In fact, 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're keeping pace with salary expectations. This, of course, can be a challenge for some firms, especially smaller practices with tighter budgets.
For those firms struggling to compete in today’s competitive job market, it's important to ensure no money is left on the table. In other words, it may be time to rethink the firm’s pricing model, such as value-based vs. hourly billing, increase prices, 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 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 isn't limited to base salary alone. Additional benefits like bonuses for doing well and shares in the company can make a big difference in getting people to apply. 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 show that they care about their employees and encourage a greater work-life balance. When asked what matters most to new workers in an employer, 85% of respondents said working-life balance is important, according to Thomson Reuters research.
Given this, it's 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 and provides them with the ability to achieve the work-life balance they desire.
According to the research, new practitioners currently average 46.1 hours per week working, the highest among business leaders (48.6%) and employees at non-accounting firms (48.1%).
Respondents said they'd like to average 40.6 hours per week of work, 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 less important parts of tax compliance, companies can focus more on hiring people with communication, teamwork, creativity, and critical thinking skills. These skills are important for building strong client relationships and creating a teamwork 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, 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't only enhance their own 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 development 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 say long-term job stability is a top career goal.
This is good news for firms. However, it's 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 letting new employees find their own answers quickly and freeing up senior staff, by using a strong 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 can certainly play a role in staff development and efficiency, it's 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 making sure everyone is included, companies can get more ideas and perspectives, which can lead to better solutions.
Firms that ignore the importance of a culture of learning and development risk losing those workers who want to grow. 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, using 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 be investing 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 efficiency. The shortage of qualified candidates amplifies this challenge, 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 use data better. It can give them insights, predictions, and suggestions that can help you find new ways to do things and solve problems for your clients.
A tax research solution with AI can help even new staff members answer difficult client questions quickly and accurately. They don't have to wait for senior colleagues to approve the answers.
By staying at the forefront of technological advancements, your firm can attract tech-savvy professionals and create a dynamic work environment that encourages innovation.
The path forward
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 stay competitive in a tough job market, companies must find ways to attract today's new professionals. These professionals are increasingly focused on work-life balance, career growth opportunities, and using technology and new ideas.
Firms that overlook the importance of these attributes risk losing top talent to rivals who are heeding the call. Where does your firm rank?
Ready to attract the best new accounting talent to your firm? Find out how to adapt your workplace to meet the evolving priorities of new accounting professionals.
