CPA firms are increasingly looking beyond the traditional pool of accounting graduates when filling their vacancies.
This strategy, which emphasizes diversity in the workforce, has gained momentum, especially post-pandemic. According to the AICPA's 2021 Trends report, there was a 10% decrease in the hiring of new accounting graduates in 2020. Conversely, there was a notable uptick in the recruitment of non-accounting graduates for accounting and finance roles by 10 percentage points.
To break it down, 57.3% of the new hires were accounting grads, while 42.7% came from different educational backgrounds. Moreover, there's been a shift in roles, with a surge of 11.5 percentage points from 2018 in placing new accounting graduates into audit positions. In response, accounting firms are modifying their recruitment strategies, actively seeking candidates with varied skills and backgrounds.
The Talent Gap in Accounting
One of the main reasons why Accounting firms are adjusting their recruitment programs is the talent gap in the industry. With many STEM graduates gravitating towards tech or investment banking and existing accountants staying put due to economic uncertainties, the talent gap widens. Although firms have increased compensation and adopted remote work, enrollment in accounting courses is dropping.
The mismatch between the skills and competencies that employers need and those that job seekers have pushes firms of all sizes to look for non-traditional prospects to fill the roles. According to a survey by Robert Half, 90% of accounting firms and internal audit departments say hiring and retaining skilled talent is the fastest-growing challenge.
Alarmingly, in 2020, 75% of the CPA workforce neared retirement age. Traditional tactics like offering higher salaries won't solve this talent shortage. The industry needs a comprehensive strategy overhaul, focusing on attracting, retaining, and turning professionals into advocates for the accounting profession.
There are many factors to this phenomenon, but to make a quit summary:
- The declining number of accounting graduates. The AICPA Trends Report shows that the combined number of bachelor’s, master’s, and certificate graduates in accounting totaled less than 70% of the projected demand for accountants and auditors in 20201.
- The retirement wave of baby boomers. According to a study by Oracle/NetSuite, 75% of the existing CPA workforce reached retirement age in 20203. This means that many experienced accountants will leave the workforce soon, creating a leadership vacuum and a knowledge gap.
- The increasing complexity and diversity of accounting services. The accounting profession is evolving rapidly, driven by technological innovations, regulatory changes, and client expectations. Accountants today need to have both technical and soft skills, such as communication, collaboration, critical thinking, and creativity. They also need to have expertise in emerging areas, such as data analytics, cybersecurity, sustainability reporting, and blockchain.
The Benefits of Hiring Non-Accounting Majors
To address the talent gap, CPA firms have been expanding their recruitment pool to include non-accounting majors and young students with no experience. Here’s why:
A Pathway to an Actual Career
Non-accounting graduates can find a route to an exciting career in the finance sector. Emphasizing financial planning, analysis, control, and decision-making, this route is an ideal fit for those keen on finance and accounting.
Attracting Top Talent Early
In the current state of the labor market, getting a jump on the competition is more important than ever, especially when it comes to securing the best talent. Attracting top talent early can have a myriad of benefits for any organization such as a shorter rump-up, better cultural fi and, employee loyalty.
More Job Opportunities
Achieving certification in this field offers numerous career opportunities for non-accounting graduates. Globally recognized, this certification is a prerequisite for various finance and accounting roles, giving those with it a competitive edge in the job market.
Juggling Job and Study
A notable benefit of this route is its adaptability. Non-accounting graduates can pursue the certification while holding a full-time job, offering a perfect balance for those keen on progressing in their careers without halting their work.
Chance for Higher Pay
Reports indicate that certified professionals in this domain earn 31% more than those without certification. This suggests that non-accounting graduates with the certification can substantially elevate their income.
The Challenges of Hiring Non-Accounting Majors
While hiring non-accounting majors can offer many benefits for CPA firms, it also comes with some challenges. Some of these challenges are:
- Usually, non-accounting majors don’t have sufficient accounting education or experience to perform certain tasks or meet certain standards right after hiring. They may also face difficulties in obtaining professional certifications or licenses, such as the CPA credential.
- Non-accounting majors may need more time and resources to learn the basics of accounting principles, practices, and software. They may also need more guidance and feedback from senior accountants or mentors to develop their skills and confidence.
- They may have different expectations and motivations like specific preferences for work environment, culture, or compensation. These differences may affect their satisfaction, commitment, or retention.
How Outsourcing to South America Can Help
One way that CPA firms can overcome these challenges is by outsourcing some of their accounting functions or projects to nearshore locations like South America.
South America has more than 1.5 million accounting graduates, which is more than the United States and Canada combined. These graduates have high levels of education and expertise, as well as proficiency in English and other languages. They also have experience in working with international accounting standards, such as IFRS and US GAAP.
It can reduce costs and increase efficiency.
Outsourcing to South America can help CPA firms save money on labor, infrastructure, and overhead expenses. According to a study by Deloitte, outsourcing can reduce operating costs by up to 70%. Outsourcing can also increase efficiency by allowing CPA firms to access services around the clock, leverage time zone differences, and scale up or down as needed.
It can improve quality and innovation.
Outsourcing to South America can help CPA firms improve the quality and innovation of their accounting services. South American providers have access to advanced technologies, such as cloud computing, artificial intelligence, and automation, that can enhance the accuracy, speed, and security of accounting processes. They also have a culture of creativity and entrepreneurship that can foster new ideas and solutions for accounting challenges.
It can keep up with your firm's culture
South American professionals often share cultural values and business etiquette with North American companies, particularly if considering the influence of the Western world in both regions. This similarity can lead to smoother communication, better understanding, and more harmonious working relationships.
It can ensure synchronism and share time zone
One of the significant advantages of hiring from South America is the minimal time difference, especially for businesses based in North and Central America. This ensures synchronous working hours, allowing real-time collaboration, and immediate feedback, and eliminating the delays that can occur when working with teams in vastly different time zones.
Why Your Next Accounting Hire Should be From South America
Outsourcing offers CPA firms an opportunity to bridge talent gaps, reduce costs, and enhance efficiency, especially with the vast pool of skilled accountants available in South America. This region promises high-quality services, innovation, and affordability.
While firms need to be aware of the inherent challenges in outsourcing, such as potential communication barriers and compliance concerns due to cultural and regulatory differences, South America presents a valuable outsourcing destination. If CPA firms can assess their individual needs and goals before making a decision, ensuring a clear and purposeful outsourcing strategy is right around the corner.
Reference:
Accounting firms pursue non-traditional applicants in bid to diversify
Creativity and closing the accounting talent gap
What is outsourcing? Definitions, benefits, challenges, processes, advice
QS World University Rankings by Subject 2021: Accounting & Finance
