Accounting profession having trouble with recruitment

Accounting firms are running into difficulties filling the pipeline with new accountants as they find themselves struggling to recruit talent.

At the Illinois CPA Society’s summit this week, ICPAS president and CEO Todd Shapiro discussed the problem in light of figures from the American Institute of CPAs. “We’ve seen some disturbing things in the pipeline,” he said during his keynote address Tuesday.

He pointed to the AICPA trends report from 2019 based on 2018 data showing a 7% decline in first-time CPA Exam candidates since 2017. The number of CPA Exam candidates who passed the fourth section of the exam decreased 6% between 2017 and 2018. He compared it to earlier declines.

Illinois CPA Society president and CEO Todd Shapiro with ICPAS chair Tom Murtagh, a partner at BKD CPAs & Advisors, at the ICPAS Summit


“What shocked us was 2018,” said Shapiro. “Look at 2011. It dropped, but then it came back. In 2018 it fell and what we don’t see is the 2019 numbers, which I have been privy to. The 2019 numbers are the same as 2018, so that is a concern for us when we’re seeing numbers are falling. What is causing the drop? By the way 2020 is going to be a waste of time because the testing centers were closed for most of 2020. So when you look at 2018, it fell to 36,000. In 2019, it was about 36,000. 2020 will be something below that. We won’t know for a while, but I’m really interested in what happens in 2021. What’s causing it? I think it’s relevance to young people when they think about the profession and becoming CPAs.”

He noted that in a survey by Korn Ferry of the top 1,000 largest U.S. companies, only 36% of the CFOs were CPAs. “I think that is the tip of the spear,” said Shapiro. “It’s a leading indicator. We saw this before. In 1998, there was a lot of conversation about how the profession is in trouble, people aren’t becoming CPAs and so forth. And then it changed.”

It may take a while for the accounting profession to turn that around. “It’s not going to change overnight, and the pandemic did nothing to help the trend,” Shapiro said in a later interview. “I haven’t seen the numbers, but I expect 2020 will be down from 2019 just because of the challenges with signing up to actually take the exam.”

He pointed to a recent column by Ken Bishop, president and CEO of the National Association of State Boards of Accountancy, in a NASBA newsletter that called for focusing more on the declining pipeline of CPA candidates. Shapiro believes the causes for the decline need to be addressed, including the surprisingly low starting salaries offered to many young accountants who are graduating from colleges and universities.

“Starting salaries are flat and they’ve been flat for a number of years,” said Shapiro. “I was talking with some accounting department chairs, and one of them made a comment that they talk to freshmen about careers in business and they said accounting was the third lowest starting salary. So are we seeing a change in pipeline? I’m going to guess no. Because if it’s relevancy, if it’s employers not requiring it, if starting salaries are flat, until we begin to change those causal factors, you’re not going to see a change in the pipeline. What we are seeing, I think, is more embracing of the issue.”

He said he has heard positive comments from AICPA officials about his highlighting of the issue, along with NASBA’s recent comments.

ICPAS’s new chairman is Tom Murtagh, a partner at BKD CPAs & Advisors, which has been actively recruiting young accountants. “I feel like our pipeline facility has been pretty strong,” he said in an interview. “We’ve got a really robust campus recruiting team developing really good relationships with the campuses. We are a good alternative for students who maybe have a perception that going into the Big Four is kind of like being a small fish in a big pond and maybe not being able to be an impact player right away. I think our students who are looking to be a little more engaged and invested with clients earlier on in their career look at it as a good option for that. The nice thing, too, is we can go to campuses because we’ve got a footprint around the country. We can have, say, our Indiana-based recruiting team maybe down at [Indiana University]. There are a lot of students from Chicago who go down to IU. That helps us draw current students back in, so I think the pipeline coming in, for us anyway, is we’re actively managing it and it feels like we’re getting a fair shake at getting students on board. I think the challenge really, then, is going forward, as students convert to being full-time accountants. Is the career that they’re working in providing them meaning and relevance for the long term? For us, it’s about retention. I feel like this has been an issue as old as time. You have a three- to five-year person who starts to evaluate what the next step in their career is going to look like. Figuring out ways to help them see the value that they can bring is really critical, and helping them see what an interesting career path looks like for them that gets them beyond that entry-level work.”

He has plans as the new chairman at ICPAS to help accountants cope with the lingering pandemic. “The focal point of what I’d like to continue to talk about over the next year is just this transition from where we were to where we’re going,” said Murtagh. “When I was invited to become the chair, I thought it would be like a post-pandemic environment, and what does that look like? And clearly, we’re not post pandemic. During this pandemic, it’s helping practitioners and folks across the state kind of think it through. Todd mentioned it a lot in this presentation today, that we’re not going backward. When you look at the statistics of people moving jobs and looking for opportunity, to me, the idea of flexibility and integration of people’s work life and their personal life and family lives, in addition to thinking about the soul searching that people have done over the last 18 months. I’d like to be engaged in conversations around that with the practitioners around the firms. I’m fortunate to be in an organization where we’re having those conversations internally.”

BKD has about 40 offices across the country where it has been helping clients cope with the pandemic. “A lot of our offices are really small markets,” Murtagh said during the keynote address at the summit alongside Shapiro. “We have an office here in Chicago and in New York, but we also have an office in Enid, Oklahoma. These are not like powerhouse markets. And those clients, those family-run businesses are looking for advice as well. Even when I was part of a large local firm, what differentiated us was the ability to provide some consultative advice. And we see that pretty regularly in our client surveys. We’ll ask what can we be doing more? They may be very happy with our timeliness and compliance and meeting the deadlines, and that sort of thing, but pretty frequently we get that little extra ‘I just wish you could be a little more strategic, just bring a little more proactivity to the table.’ And I think about it in the context of what we were all dealing with over the past year, with the PPP program and the employee retention credits and I think our clients looked at us and said, ‘This is amazing. You’re giving us tons of great information, keeping us apprised of a very fast-moving process here.’ But when it then came down to how do we integrate PPP here and the employee retention credit, at that point we had to move beyond just being trusted and we had to be more strategic. We had to look at the numbers and where do we do the cutoff lines so we’re not overlapping and we’re maximizing the benefits of those two things. It’s a small example, but that impacts every small business that was participating in those two programs.”

Attracting a more diverse group of accountants has become more important for firms, but Shapiro feels he hasn’t seen enough progress on that front yet. “The challenge is it’s going to take time, and so patience is a virtue,” he said. “When I came into my job in 2013, we looked at how many black and Hispanic accounting majors there were in the state of Illinois, and it wasn’t a lot, especially as a percentage of total accounting majors. My personal goal, which wasn’t given to me by the board, was to double that before I retired, which is coming up in less than 18 months now. Of all the things I wanted to set out to do when I became CEO, that goal will not be met. I far underestimated the challenges in building the pipeline. We are competing. It may help that accounting is going to become part of STEM when it comes to research dollars, but it’s going to take time. I think more is being done now than ever before. You have EY coming out with a big program, and Deloitte coming out with big programs. I think that’s going to help. But I think growing our pipeline is going to take time. We are missing a whole lot of potential CPAs. In high school, especially a diverse high school, they’re going to hear about whether they should become an engineer, whether they should become a lawyer or a doctor or an investment banker, you name it. So the key is relevance. How do you make this really attractive and interesting to somebody who doesn’t know anything about the profession? They don’t have a parent or an uncle or a family member who’s been a CPA. I think that we’ll make progress, and I think that will help with the pipeline. All of this is going to take time, but it’s going to take a concerted effort.”

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