Companies will need to pursue business model changes aggressively to attract and retain top CPA talent, especially amid staff shortages, a study by Pennsylvania Institute of Certified Public Accountants (PICPA) said.
Retaining the best accounting talent has become jarringly expensive but “one critical thing is even more expensive than retaining talent — attracting it,” according to PICPA’s April 25, 2024, report, CPA Talent Retention 2024: Keeping Your Best Performers. Companies therefore should “make strategic investments in retentions to avoid the crippling costs of recruitment.”
The report includes data on why CPAs have left the profession; what entry and mid-level talent are looking for to feel valued and retained; and what accounting firm leaders can put into practice to move from “pyramid” to “pentagon” business models. Other areas flagged are the importance of career and skills development, balancing work-life and workload, retaining diverse talent, and financial compensation for employees.
The study comes at a time when more than 70% of CPAs are near or at retirement age and are retiring in the next decade or so. Compounding issues include the drop in the number of US college accounting graduates and those taking the CPA Exam; and the incoming Gen Z workforce (those born between 1995 and 2004) who place greater importance on work-life balance than other generations did at similar ages — and this trend will continue.
PICPA said it surveyed two groups: 323 CPAs and accounting professionals nationwide who have 0-15 years of public accounting experience and have left either a firm or the profession within the past five years; and 449 Pennsylvania CPAs and accounting professionals with 3-10 years of experience, a group with a high potential for considering leaving the profession or their firm.
Broken Workload Management System in Place
Among factors respondents highlighted as having a strong impact is a broken workload management system that firms have in place, according to the study.
“Unreasonable, unsustainable productivity and time expectations are crushing the pipeline of talent and pushing out current talent,” the report found. “Retaining talent isn’t as simple as paying a lot more and expecting a lot less from staff.”
The study also found that most CPAs want to stay in the profession and with their current firm. More than 73% of those responding gave high ratings (5 or higher in a range up to 7) indicating that they would like to stay with their current firm; and 57% want to stay in the public accounting profession—and with their current firm.
In addition to direct compensation such as salaries and bonuses, there is a wide array of indirect and nonfinancial compensation that can help firms “retain the whole person,” the report found.
The critical factor to achieve “whole person” retention is personalizing each professional’s reason to stay. “There is no “one size fits all” approach. When employees feel appreciated and valued for their efforts, they will not only stay with your firm, but they will also become brand ambassadors.”
This article originally appeared in the May 1, 2024, edition of Accounting & Compliance Alert, available on Checkpoint.
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