The accounting profession is facing a talent crisis that shows no signs of slowing. With experienced workers retiring, fewer new people joining the field, and more people needing special advice, small and medium-sized tax and accounting firms are having trouble.
To remain competitive and continue delivering value to clients, firms must rethink how they attract, develop, and retain talent. Traditional approaches to recruiting and retention fall short in today’s fast-paced, digitally driven world. Firms that fail to evolve risk falling behind — not just in productivity, but in their ability to deliver the higher-value services clients now expect.
This white paper explores how leading small and medium-sized tax and accounting firms are meeting the challenge head-on by embracing technology, offering greater flexibility, and cultivating a more engaging, purpose-driven workplace culture. These three pillars prove essential to surviving the talent crisis and transforming it into an opportunity for growth and differentiation in a competitive market.
Consequences of the accounting talent shortage
The accounting profession has long grappled with a growing talent shortage, fueled by a wave of retirements, barriers like the 150-hour rule, and a shrinking pool of accounting graduates. Outdated perceptions of the profession haven’t helped either. But what’s become clear is that today’s emerging professionals are redefining what they expect from a career. They don't want to sacrifice work-life balance for long hours during busy times. They're quick to leave companies that haven't changed to meet their changing needs.
Several indicators underscore the urgency of the situation. Retirement rates among experienced professionals continue to rise, with a significant portion of the accounting workforce nearing retirement age. At the same time, the American Institute of Certified Public Accountants (AICPA) Trends Report indicates that fewer students are graduating with accounting degrees, and Certified Public Accountant (CPA) exam pass rates have declined, reflecting a drop in interest and potential misalignment between academic preparation and industry demands.
Another major shift is the overhaul of the CPA exam. The new model adds a stronger focus on technology, which makes sense as technology-mature firms are seeing 39% higher revenue per employee. Candidates can now focus on areas like business analysis and reporting or tax compliance and planning. This shows that CPAs need to move beyond seasonal compliance and focus more on providing advisory services that are more valuable.
These trends are creating a growing gap between talent supply and business demand. Firms that fail to adapt may find themselves chronically understaffed, relying heavily on a shrinking core team stretched thin by rising workloads. This not only impacts productivity but also puts quality and client satisfaction at risk. When teams are overworked, errors increase, communication suffers, and the ability to deliver timely, high-value insights diminishes.
Accounting talent shortages are a big problem in the industry. They threaten both the ability to work and the chance to grow in the future. To effectively address it, accounting firms must understand the full scope. The shortage of qualified professionals isn’t a temporary fluctuation — it’s a systemic issue affecting firms of all sizes, particularly small and medium-sized practices that may lack the resources of larger competitors. Underneath it all, the accounting profession is undergoing a seismic shift, and firms that ignore it risk falling dangerously behind.
Companies that don't update their technology or use new ways to hire may find it hard to keep top talent. They are increasingly focused on new ideas, flexibility, and a work-life balance. Additionally, firms risk losing their competitive edge as clients seek more agile, technology-enabled advisors who can respond quickly and proactively to their evolving needs.
Ultimately, the talent shortage is a business imperative. Firms that take a wait-and-see approach may find themselves locked in a cycle of attrition, lower morale, and missed growth opportunities. The solution lies in forward-thinking strategies that reimagine the workplace through the lens of technology, flexibility, and culture. Let’s take a look.
Three pillars to winning the accounting talent wars
Today’s accounting firms must move beyond traditional recruitment tactics to win talent wars and embrace a more strategic, future-ready approach. The most successful small and medium-sized firms are combating the talent crisis by leaning into three critical areas — technology, flexibility, and workplace culture.
1. Enhance your tech infrastructure
Enhancing your firm’s technology infrastructure is a powerful tool for attracting talent in a competitive hiring market. Today’s professionals — especially younger talent — are looking for workplaces that embrace innovation and invest in tools that support their growth.
According to the 2025 Generative AI in Professional Services Report, 40% of professionals say they already are using publicly available tools such as ChatGPT, and using industry-specific tools is expected to rise within the next few years. Respondents also believe that generative AI (GenAI) will be a central part of professional services organizations’ workflow within the next five years, if not sooner. Interestingly, tax and accounting professionals saw stark increases in the use of AI over the past year.
To successfully apply AI, accounting firms need a broadly capable solution that's purpose-built for tax, audit, and accounting professionals. Enter Thomson Reuters CoCounsel Tax, an AI-driven platform that transforms how tax, audit, and accounting professionals conduct research, manage knowledge, and automate complex workflows.
CoCounsel Tax automates complex research and tax planning tasks. This frees staff from time-consuming compliance work and helps companies grow their services without having too many employees. This shift creates new opportunities for growth without adding to a head count.
In addition, tools that automate data entry, streamline document management, and centralize communication allow staff to spend less time on repetitive tasks and more time on strategic, high-value activities. For example, scan-and-populate software like 1040SCAN automates the extraction of tax data from source documents, eliminating hours of manual input. Work-paper software, such as SPbinder, centralizes file organization and workflow, making it easier for teams to collaborate and track progress. These solutions reduce bottlenecks and free up capacity, making the entire firm more productive.
As technology improves internal workflows, it also has a direct impact on the client experience. Clients today expect fast, accurate, and digital-first services from their accountants. Tech-savvy firms can deliver on these expectations by offering streamlined interactions and faster turnaround times. For instance, SafeSend automates the delivery of tax returns and e-signature collection, giving clients a seamless and secure experience that aligns with modern expectations.
When job seekers see your firm using smart, efficient tools, it sends a clear message — we value your time, we support continuous development, and we’re committed to staying ahead of industry trends. Candidates are more likely to choose firms that offer efficient, forward-looking environments where they can focus on meaningful work rather than outdated, manual processes.
Enhancing technology infrastructure is more than a productivity upgrade — it’s a strategic necessity. It supports the full spectrum of firm success. From attracting and retaining top talent and meeting and exceeding client expectations, to enabling scalable, profitable growth. Firms that invest in the right tools position themselves not just to survive the talent crisis, but to thrive in a new era of digital-first accounting.
Investing in modern technology does more than streamline operations. Benefits include:
- Attracting talent. A strong tech stack signals a commitment to innovation and efficiency, showing prospective hires that you value their time and professional development.
- Improving efficiency. By reducing repetitive manual tasks, technology frees staff to focus on higher-value, expertise-driven work that enhances job satisfaction.
- Boosting client service. Today’s clients expect seamless, tech-enabled interactions. A modern, efficient firm earns trust and loyalty by meeting those expectations.
- Driving growth. Scalable technology solutions make it possible to expand service offerings and client capacity — without burning out your team.
2. Prioritize flexibility for your staff
A focus on hybrid flexibility is proving to be one of the most effective responses to the accounting profession’s ongoing talent crisis. Flexible work arrangements, supported by secure cloud-based technologies, give professionals more control over their schedules and working environments.
In fact, a landmark study led by Stanford economist Nicholas Bloom — the largest of its kind on remote work — reveals that employees who work from home two days a week are just as productive and equally likely to be promoted as their fully in-office counterparts.
The research also shows that hybrid work greatly improves employee retention. This is clear benefit for both companies and their employees. These findings reinforce the value of flexible work models as a strategic tool in addressing the accounting profession’s talent crisis, making hybrid arrangements a win-win for firms seeking to retain top talent without sacrificing performance or growth.
As candidates seek better work-life balance, allowing staff to work where and when they’re most productive signals empathy and adaptability. These are qualities that attract high-potential candidates and encourage long-term commitment.
Whether it’s a working parent juggling school drop-offs or a team member pursuing continuing education, flexibility allows individuals to tailor their workday around life’s demands. This flexibility not only broadens the talent pool but also enhances a firm’s appeal as a modern employer. Flexibility, in this context, is more than a perk — it’s a foundational strategy for workforce sustainability. Cloud-based solutions like document management systems, client portals, and tax workflow tools ensure that employees can stay connected, collaborative, and efficient regardless of location.
Flexibility also plays a critical role in job satisfaction, which is directly tied to talent retention. When employees feel trusted to manage their own time and workload, their engagement rises. They're more likely to feel valued and empowered — two key drivers of morale. For accounting firms, this translates into a more stable, motivated workforce that's less likely to pursue opportunities elsewhere. In an industry where turnover can be costly and disruptive, the ability to retain experienced staff is a significant competitive advantage.
In a profession facing both a talent shortage and rising client demands, embracing hybrid flexibility is no longer optional. It’s a crucial shift that allows accounting firms to support their people, boost performance, and future-proof their business. When used with the right technology, flexible work models create a place where tax professionals can do well. This helps firms become stronger, more resilient, and more attractive to the next generation of accounting talent.
3. Support expertise-driven work
One of the best ways to fight the accounting talent crisis is to focus on offering work that is based on knowledge. This will make accountants more important than just doing the same things over and over again. By embracing automation and digital tools, firms can shift focus to higher-value, intellectually rewarding work. This transformation not only improves job satisfaction but also helps attract professionals who are looking for meaningful career opportunities where they can apply their analytical and strategic skills.
Automation plays a key role in enabling this shift by taking on the burden of repetitive, manual tasks that often lead to burnout. Tools like 1040SCAN and SPbinder streamline tax preparation and improve document organization, significantly reducing time spent on tedious processes. Similarly, SafeSend eliminates manual steps in the delivery of tax returns, allowing accountants to devote more attention to client service.
By letting technology do the hard work, your staff can focus on areas where they can give expert advice, like tax strategy and planning. With CoCounsel Tax, even junior staff can quickly access authoritative answers, allowing them to focus on delivering deeper insights and guidance to clients. This not only enhances the quality of work but also positions the firm as a trusted advisor rather than just a compliance provider.
Creating a workplace culture centered on professional development is another critical piece of the puzzle. Firms that prioritize skill-building and encourage staff to grow into consultative, advisory roles are more likely to retain top talent. When employees see a clear way to learn hard topics and help clients, they're more likely to stay interested and involved in their work. This culture of improvement matches the natural change of the accounting profession toward more valuable advisory services.
Offering expertise-driven work supported by a culture of professional development can help your firm address the talent crisis. By using tools that minimize low-value tasks and fostering a culture that rewards critical thinking and continuous learning, you can attract and retain professionals who want to make a meaningful impact. This strategic investment in people and technology not only improves internal morale and retention but also strengthens client relationships and enables long-term success.
Modern technology is shifting the role of accounting professionals from routine compliance processors to strategic advisors. By automating time-consuming tasks, firms can redirect staff energy toward more fulfilling, expertise-driven work. This may look like:
- Freeing up time for strategy. Tools like CoCounsel Tax handle complex research and tax planning tasks, giving tax professionals the capacity to engage in high-value client advisory services.
- Eliminating low-value work. Solutions such as 1040SCAN and SafeSend automate data entry and tax return delivery, reducing repetitive tasks and boosting overall efficiency.
- Supporting skill development. Platforms like SPbinder bring clarity and organization to workflows, creating space for staff to grow their expertise in a more structured environment.
- Enhancing job satisfaction. Empowering employees to use their knowledge and skills in impactful ways leads to more rewarding careers and stronger client relationships.
With the right technology in place, your firm can elevate work and deliver greater value — both to clients and staff.
The future belongs to tech-forward firms
Future-proofing a firm means taking deliberate steps today to identify inefficiencies, invest in training, and adopt tools that drive both innovation and productivity. Beyond the tools themselves, building a culture that values continuous improvement and innovation is essential for lasting growth.
These three pillars — technology, flexibility, and culture — form the foundation of actionable solutions to the profession’s most pressing workforce challenges. With automation handling much of the compliance workload, team members can shift their focus to more engaging and strategic responsibilities. This makes work less stressful and more balanced. This is especially appealing to younger professionals who want flexibility and meaningful work.
Solutions like CoCounsel Tax, 1040SCAN, SPbinder, and SafeSend not only improve operational efficiency but also demonstrate to current and potential staff that the firm is serious about supporting them with the best resources available. In today’s competitive talent market, a modern, tech-forward work environment can be a key differentiator in attracting and retaining top performers.
Investing in the right technology sends a powerful message about the vision of your firm. Becoming a tech-savvy accounting firm , however, involves more than just adopting new software — it requires a strategic shift in mindset, operations, and culture. Here are the key steps to successfully making that transition..
- Conduct a tech audit. Start by evaluating your current technology stack to identify gaps, redundancies, and inefficiencies. Analyze which tools are being underused, where manual processes still exist, and how technology is — or isn’t — supporting your goals. This assessment lays the foundation for targeted improvements.
- Flag inefficiencies and set priorities. Use the audit findings to pinpoint critical pain points, such as repetitive data entry, disorganized workflows, or outdated client communication tools. Then, prioritize which areas need immediate attention and which tools could provide the most value quickly.
- Invest in training and upskilling. Technology is only as effective as the people using it. Provide comprehensive training to ensure your staff are confident and capable with the new tools. Make ongoing learning a priority so your team continues to grow with your tech stack.
- Pilot new tools and gather feedback. Start small by testing new solutions with select teams or clients. Monitor results, gather employee feedback, and refine your implementation strategy before rolling tools out firm-wide. This measured approach helps ensure success and buy-in.
- Foster a culture of learning. Encourage continuous improvement by creating space for experimentation, celebrating early wins, and involving staff in technology decisions. A tech-savvy firm isn’t just built on software — it’s powered by a team that embraces change and actively looks for better ways to work.
Turning the talent crisis into an opportunity
The ongoing talent shortage remains one of the most pressing challenges for accounting firms. However, firms that go beyond traditional hiring strategies and focus on creating an environment where professionals want to work — and stay — have an incredible strategic advantage.
Technology, flexibility, and a culture of continuous improvement are the cornerstones of this opportunity. By automating routine tasks with solutions like CoCounsel, 1040SCAN, SPbinder, and SafeSend, your firm can free staff to focus on meaningful, expertise-driven work.
The firms that embrace these changes will not only address the current talent shortage but also position themselves as industry leaders. Now is the time to invest in the tools, training, and culture that today’s professionals demand. In doing so, your firm will attract top talent, retain them through engaging, rewarding work, and build a competitive edge that lasts well into the future.
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