You might be searching for a new accountant next tax season if your current one follows the trend of others in the wake of the Great Resignation.
While the COVID-19 pandemic has certainly exacerbated the trend of people leaving their jobs, the Harvard Business Review cites data from the Bureau of Labor Statistics (BLS) which shows that the share of workers voluntarily leaving their jobs has steadily risen almost every year since 2009. (2020 was the anomaly, perhaps because of the uncertainty early in the pandemic.)
This upward trend reached a fever pitch in 2021 with more than 2.5 percent of workers voluntarily leaving their jobs. Low pay, lack of opportunity for advancement, and a perceived lack of respect in the workplace are some of the top reasons people gave for leaving their jobs in 2021 according to the Pew Research Center.
Why the Accounting Industry Is Being Hit Hard by the Great Resignation
The field of accounting is not immune from these trends. Bloomberg Tax cites BLS data which shows that the total number of Americans employed as accountants and auditors decreased by 17 percent from 2019 (its peak) to 2021. The pandemic started taking off in the United States in March 2020, the middle of the tax season, and extensions on tax filings coupled with the introduction of new relief packages (such as the Paycheck Protection Program) have added to the strain on accountants.
People have been leaving their jobs at accounting firms during the middle of the tax season, which was previously unheard of. If a firm struggles to replace outgoing accountants, those who stick around then have to pick up the slack. The long work hours, particularly during peak season, have some wanting a healthier work-life balance. One company has even experimented with eliminating overtime to prevent burnout for its employees.
Researches also cite stagnant wages over the past two decades as another reason why accountants are leaving the profession. Joe Schroeder, an associate professor of accounting at Indiana University, told The Verge, “You’re working a lot of hours, you’re not getting paid enough, and that causes people that have the skillset to sit there and say, ‘I’m not being appreciated.’” Schroeder also points out that when workers are underappreciated, particularly through low pay and long hours, it can eventually impact the quality of their work, which can reflect poorly on the company.
How Accounting Firms and Companies Can Remain Competitive and Retain Accountants
To combat this and retain the best employees, companies need to make their employees feel appreciated. Companies can support their employees in pursuing advanced degrees and additional licensures (i.e. CMA, CPA), which would give the employee a deeper skillset and potentially lead to promotions and pay raises down the road.
A 2021 report by the Institute of Management Accounts shows that those with advanced degrees and licensure have higher wages, from entry-level positions up to the top management level. For example, those with the CMA certification earned 30 percent higher median total compensation compared to those without a CMA or CPA, while those with a master’s degree earned 25 percent more median total compensation compared to those with just a bachelor’s degree. Even before the pandemic, respected colleges and universities offered online courses and degrees, with some of the programs developed specifically with working professionals in mind.
In a 2021 survey by the American Institute of Certified Public Accountants, respondents felt recruitment and retention of staff would be a top issue. Employers need to adapt to new workplace practices that came about because of the pandemic if they want to retain their best employees. Fostering a work culture open to work-from-home and hybrid work schedules is just one way accounting can remain competitive with other industries.
With work-from-home or hybrid schedules, employers should do what they can to make those workers feel included in the company culture. Small things like an office-wide March Madness pool and virtual office happy hours via video conferencing platforms (i.e. Zoom, Skype) are just a couple of relatively simple ways to boost comradery amongst workers which could lead to greater loyalty to the company. Effectively embracing technology will be another key to companies succeeding. Everything from offering video conferencing for meetings with both colleagues and clients to the adaptation of digital tools that can automate tedious tasks can help.
Understanding Cultural Differences Will Play a Role in Retention
Companies should also be mindful of the generational differences of Millennials and Gen Zs, who are becoming a larger workforce segment (especially at the entry and mid-career levels) as Baby Boomers continue to retire and Gen X’ers ascend to senior and upper-management levels. The younger generations generally seem to be less loyal to a particular company than their predecessors.
One finding from a 2018 report by the Association of Chartered Certified Accountants (ACCA) showed that 61 percent of respondents from all sectors indicated that their next career move would be outside of their current company. (Though it’s important to note that number fell to 48 percent for those working at the Big Four firms: PwC, EY, Deloitte, and KPMG). A new-age workplace culture with promising opportunities for advancement within the company might be something the mid-tier and smaller firms consider in an effort to retain a younger workforce and remain competitive.
Effects of the Great Resignation on the Accounting Field
The Great Resignation has empowered the workforce in a significant way and while the rates of people leaving their jobs may change, it’s likely that some of the workplace cultures that came about are here to stay. Flexible work arrangements and the ability to work remotely will almost become expected for workers going forward, and the companies able to meet the exceptions seem the most likely to survive.
The great resignation may not impact the field of accounting as much as other sectors (i.e. leisure and hospitality, health care and social assistance, construction, etc.) However, accounting firms must keep up with current workplace trends and actively help their employees grow if they want to remain competitive in an environment where the leverage is increasingly on the side of the worker, particularly the most sought-after workers.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.