How Accounting Firms Fail at Recruitment (Do This Instead)
A growing number of job vacancies, difficulty reaching the younger generation of professionals, and only getting a few applicants for each job posting are all common problems for accounting firms recruiting talent.
In fact, 9 out of 10 accounting and audit firms currently struggle to fill open positions.
On our podcast, Growing Your Firm, we’ve heard from many industry experts and successful firm owners. In one recent conversation, we gathered some expert advice on hiring and recruiting qualified talent—even in today’s challenging labor market.
In this guide, we lay out some of the most common recruiting mistakes that we’ve seen accounting firms make. We also provide some helpful tips and suggestions for overcoming these failures so you can support your growing firm despite the shrinking talent pool.
Fail #1: Not Adapting to the Depleting Talent Pool
Ongoing trends in the accounting industry’s labor market provide unique challenges for firms seeking enough incoming talent to fill vacant positions.
On a recent episode of Growing Your Firm, we had the chance to sit down with Rob Brown, the co-founder of the Accounting Influencers Roundtable (AIR) mastermind group and the co-host of Accounting Influencers, the popular accounting and fintech podcast.
In the clip below, Brown points out that more people are leaving the accounting profession than entering it. This shift is primarily due to the many baby boomers retiring from their accounting careers, leaving a large vacancy in accounting positions.
According to current estimates, 75% of public accountants and CPAs working today will retire within the next 15 years. As this outward movement of talent from the industry continues, firms need to rethink how they view their workforce and adapt to the changing industry landscape.
Consider outsourcing to offshore teams where appropriate to navigate this depleting talent pool. Outsourcing can help you maintain efficiency levels even with a reduced internal headcount.
You may not be comfortable outsourcing billable work just yet.
However, there are fewer barriers to outsourcing administrative roles or non-billable tasks that don’t need to be completed by licensed CPAs. Your internal team can then focus solely on billable work within their expertise.
Plus, many tasks that previously needed to be done manually can now be automated using advanced tools.
As a result, leveraging modern tools, software, and AI to complete administrative tasks may be helpful, lessening your reliance on human workers to some degree.
Fail #2: Difficulties Recruiting Generation Z
Brown also points out that Gen Z thinks differently about jobs and employers than previous generations.
These differences mean firms need to approach recruiting Gen Z candidates differently than they have in the past.
In short, Gen Z wants to see quicker results and doesn’t necessarily want to put in the years before reaching their career goals, even more so than millennials.
While prior generations were more willing to put in the time and effort to earn their seniority, Gen Z has a more fast-track mentality regarding their career growth. They prioritize factors like a work-life balance and passion for their job, not just titles and salaries.
That mindset makes filling and fostering entry-level positions challenging for accounting firms.
Since the accounting field is already experiencing a shortage of incoming talent, layering on these cultural differences among different generations makes recruiting new talent even more difficult.
The World Economic Forum explains that by 2025, Gen Z will make up one-third of the workforce.
Therefore, firm owners need to strategize ways of reaching and connecting with younger accounting students and professionals to keep their employment pipeline healthy and full.
You can be more receptive to the younger generation by learning to speak Gen Z’s language. Consider listening to and appearing on podcasts, staying active on social media, and paying attention to relevant surveys regarding Gen Z’s workplace communication preferences.
More than other age groups, Gen Z is responsive to how you describe the story and the mission behind your business.
Explaining how they make a difference at your accounting firm could encourage more buy-in from younger candidates and keep them invested once they’re on the job.
Brown explains in the following clip that it’s becoming increasingly popular for firms to start recruiting in high school or even younger. You may even weigh sponsoring potential hires’ degree programs to show your intent to employ them after graduation.
Fail #3: An Inability to Relate to Younger Business Owners
Across the United States and beyond, business models and the mechanisms of the overall economy are rapidly changing.
With the rise of cryptocurrencies, AI, SaaS, and other emerging technologies, younger professionals want to work for firms evolving and expanding into innovative industries.
That often means firms must start working with younger and more forward-thinking clients. Given the average staff accountant in the US is 41 years old, it can be harder to relate to business owners in their early 30s or younger, in addition to understanding their newer or unconventional business models.
Firms uncomfortable expanding their clientele beyond the industries they’re most accustomed to may find it hard to attract younger talent who don’t see that as a path forward in the modern economy.
Staying current with the changing times and being open to new clients in innovative fields is one of the best incentives you can offer to younger talent and existing employees.
Plus, bringing on younger employees makes it easier for your firm to relate and be relevant to young business owners.
Familiarize yourself with modern business models through podcasts and social media pages focused on these areas. For an even more in-depth look at these new business models, you can start a side hustle in one of the emerging sectors to gain a deeper understanding firsthand.
Fail #4: They Can’t Cope with VUCA
As Brown explained in our conversation, among other issues, firms that can’t handle VUCA (volatility, uncertainty, complexity, and ambiguity) will continue to struggle with staffing.
Uncertainty is the new norm in business, and new challenges constantly arise that impact how a CPA firm and its clients operate. The complexities of the post-COVID world make even 90-day plans tricky, let alone a one-year plan.
A firm’s staff can be its biggest asset when navigating industry headwinds and uncertainty. Your hiring decisions either set you up for further growth or leave you in an endless cycle of recruiting, hiring, and training non resilient candidates.
Strengthen your firm and make it more adaptable by hiring only the best talent for open roles. Recruit accountants with agile skills and adequate commercial knowledge who can easily speak with clients and are effective problem solvers.
In other words, qualified candidates for today’s modern accounting jobs aren’t just technical experts regarding accounting matters; they are multifaceted with a wide range of skills that can benefit a growing firm.
As a firm owner, you can’t always plan for tomorrow or forecast where the industry will be in a year. However, how you recruit for your firm can make your team better equipped to deal with any uncertainties that may arise.
Fail #5: Not Hiring for the Five Skills You Actually Need
Brown further shares that firms can remedy their staffing issues by investing in the top candidates adept in five essential skills:
- Technical skills
- Technological skills
- People skills
- Business acumen
- Selling skills
While technical and technological skills are vital, accounting professionals today need to be able to tell stories around the numbers they present to clients.
They need to offer more to your firm, such as an area of expertise on a specific business model or industry or the ability to bring in new clients.
Accounting recruiters with no clear idea about which types of candidates would improve their operations will find themselves unsatisfied with their hiring efforts. They’ll likely need to invest even further in recruiting to replace incompatible or unsuitable hires.
Assess and identify these five skills within your current workforce, and make hiring decisions that compensate for any shortfalls among your existing team.
Ask your employees for a self-assessment of their skills, then offer them a roadmap to develop any skills they lack.
Approach your recruiting efforts with these missing skills in mind to make your team more well-rounded. Then, show potential candidates how you encourage skill development and that these personal growth options are available to them once they join your firm.
Fail #6: Not Developing Their Existing Team
High turnover within your firm can exacerbate the labor shortage even further.
Firms that don’t support and develop the skill sets of existing employees by investing in their education, tech stack, and mentorship may face a higher turnover rate, needing to recruit more to fill open positions.
Not offering these perks makes attracting and retaining the right talent difficult. To explain this aspect further, Brown makes an analogy to dating:
“If you want to attract the right mate, be the right mate. If you want the best talent, be worthy of attracting the right talent.”
Statistically, 61% of adults in the United States seek job opportunities that offer career development opportunities.
Firms need to be aware of these preferences to attract top candidates and nurture them once hired. They can then promote from within their existing team rather than externally recruiting as positions open up.
While you want to make your firm attractive to job seekers, you must also invest resources in your people and the technology that helps them do their jobs more efficiently.
Demonstrate a clear path of progression to your employees so they can see their future within your firm. Become a great mentor and set up a program for experienced professionals to advise their junior colleagues.
This way, you create a positive company culture dedicated to nurturing its talent.