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The Wall Street Journal published another article on October 6, 2023 addressing the accounting shortage. Below are highlights from the article, along with our recommendations to keep your accountants engaged.
The Wall Street Journal article "Why No One's Going Into Accounting" on October 6, 2023, examines the factors that are discouraging people from pursuing careers in accounting.
One key reason is the pay gap between accounting and other majors. According to a survey by the Center for Audit Quality, higher starting salaries with other majors were the top reason why non-accounting majors who had considered the field decided against it. In 2017-2021, accountants aged 25-29's median salary was $56k. Compare that to financial analysts, who made a median of $74k.
Accounting is often seen as a boring and tedious field. Debits and credits are less attractive than numerous other careers. Stability and pay are no longer matching job satisfaction in the younger generation.
Other factors
Other factors that may discourage people from pursuing accounting careers include:
So what can you do to engage your accountants?
Expand your accountants' roles - Many accountants are leaving to be Financial Planning & Analysis (FP&A) analysts. Did you know FP&A is similar to a combination of managerial and strategic accounting? If your accounting team is solely focused on recording activity, consider getting them involved in financial modeling and planning (also known as strategic accounting, more on that here). Training in other areas of accounting and finance is a great way to keep your accountants engaged. Data analysis is another tool to boost accounting engagement.
Emphasize business objectives - This is not said enough, but every employee at your business should understand their role in the big picture. If you are pushing a new initiative, how does that affect your business, and how does accounting play a part? Ensure that your accounting department sees the strategic importance of their role. Reinforce it with strategic accounting initiatives.
Examine your pay and extrinsic motivations - Check to see if you are paying industry standard for your accountants, otherwise, you risk losing them. If your pay is competitive, explore other benefits, such as bonuses and work-from-home opportunities. Encourage vacations during non-busy seasons, and give plenty of breaks after the season ends. There are many little adjustments you can make to have a happier workplace. Many accounting functions require two screens, or higher resolution. Does your business offer that?
Ask your accountants - Perhaps the most simple, and often overlooked, metric is to simply talk to your accountants about their perspective. Engage in open and honest communication. Not every business will have the same problems.
Automation - AI is the new buzzword. However, automation for accounting is not new - in fact, automation has been around for decades. With new tools and continual improvements, now is the time to invest in software or custom scripts that massively reduces the time spent on tedious tasks.
Consider outsourcing - Take away the mundane tasks from your accountants, and let them focus on analysis and strategy. Outsourcing bookkeeping and journal entries will prevent your accountants from being chained to cyclical close cycles. If you have bookkeepers, consider outsourcing strategic accounting. External consultants keep your employees happy by taking away the tedious work, and will allow you to expand their roles to be more strategic.
If you are interested in ways to improve your accounting department, contact us today.
