Looking to hire an accountant for your firm? Good luck. The declining number of students entering the accounting field (and actually staying) is posing a significant challenge for public and private organizations.
Accounting is a profession that requires a high level of technical competence, analytical skills, and ethical standards. So, the short answer should be: yes. However, finding qualified accounting employees who meet these criteria is not an easy task.
According to a report by Robert Half, 90% of accounting firms and internal audit departments say hiring and retaining skilled talent is the fastest-growing challenge. Moreover, the demand for accountants is forecast to grow 7% from 2020 to 2030, according to the Bureau of Labor Statistics.
As a result, reports from the 2022 labor market found that 57.3 percent of new graduate hires were accounting graduates, and 42.7 percent were nonaccounting graduates according to the AICPA. With such figures, it's becoming increasingly clear that accounting firms are opting for alternatives and seeking out new talent.
One of the ways that some accounting and finance firms try to overcome this talent gap is by hiring non-graduate accountants, or those who do not have a bachelor’s degree in accounting or a related field. These candidates may have some relevant experience, certifications, or skills that make them suitable for certain accounting roles. However, hiring non-graduate accountants is not a walk in the park either.
But is this decision a smart one? In this article, we explore the potential pitfalls of hiring non-graduates and discuss viable alternatives, such as outsourcing accounting roles to countries in South America.
The Rise of the Non-Graduate Accountant
Historically, a bachelor’s degree in accounting or a related field was seen as a ticket to entry for most accounting roles. But as firms have struggled with talent shortages and the changing dynamics of the business world, many are giving non-graduates accountant roles a second look. This isn't just a cost-saving measure; it's a reaction to the observed skills and potential these individuals bring to the table.
While there are many benefits to hiring students, entry-level accountants, or non-graduates, there are also some challenges that firms need to overcome beforehand hiring a candidate with no degree.
Lack of Technical Knowledge
Higher education in accounting equips students with a comprehensive understanding of the field's technicalities. While on-the-job training does provide knowledge, it often can't match the breadth and depth of a formal education. Hiring someone without this background might mean they're unaware of the nuances of advanced financial principles, potentially leading to errors.
Increased Workload for CPA-Certified Employees
Every time, in company or firm, needs a good ratio between super experiences, profiles, fresh faces that can bring in new ideas, and the one who put down their signature for the big papers. Accounting firms know this first hand. Non-graduate accountants might help bridge the talent gap short term, but in the long run, especially with big clients, CPA-certified accountants are going to absorb the majority of the workload if non-grads don’t actually pursue the degree.
Less Commitment to Pursue a Career
One of the main reasons for the talent shortage in the US is that young students have a better tendency to change from one career to another in the pursuit of better prospects or a higher salary. And yes, accounting salaries are rising every day, but even in entry-level roles, some careers like software development and programming are taking the lead.
With no formal degree anchoring them to the profession, there's a perceived risk that they might see accounting as a transient job rather than a long-term career. This perspective can lead to higher turnover rates, with non-graduates possibly shifting careers or pursuing further education, leading to potential disruptions in firm operations.
Training and Onboarding Time
As mentioned earlier, non-graduate accountants typically need a longer onboarding phase. The good news about it is that you can train them as you like, and even suggest a specific path for them to follow that aligns with your future plans.
This prolonged training period isn't merely a time investment; it's a financial one so make sure you: 1. Have the right candidate that is going to take true advantage of training. 2. You have enough remaining team to handle what fresh students can’t.
Addressing the Talent Gap: A South American Solution
Hiring non-graduate accountant employees may seem like a quick fix to the current talent shortage, but firms still ponder over whether this is a good strategy or not. If firms wish to maintain the quality and consistency of their services, a more strategic solution might be to look beyond domestic borders.
Offshore accounting staffing from the Philippines, India, and South American countries is on the rise. South America, for instance, presents an excellent opportunity for firms looking to outsource their accounting functions. Here’s why:
Highly Qualified Professionals: Many countries in South America have rigorous accounting programs that produce well-educated, competent professionals.
Cost Savings: While maintaining the quality of work, outsourcing to South America can offer significant cost savings, given the differences in currency and living expenses.
Time Zone Alignment: Unlike other outsourcing hubs, South America shares time zones with North America. This means real-time collaboration is feasible, and there's no need to adjust to significant time differences.
Cultural Affinity: The cultural similarities between North and South America can foster better working relationships and smoother communication.
Bilingual Advantage: Many professionals in South America are bilingual, which can be an asset to firms with diverse clientele or those looking to expand internationally.
The Bottom Line
While the allure of hiring non-graduate accountant employees might seem tempting, it's essential for firms to consider the long-term implications of such decisions. The potential risks in terms of quality, compliance, and training could outweigh the immediate benefits. Firms must weigh the immediate advantages against the longer-term challenges to make informed, strategic decisions.
