Retaining talent is more critical than ever before. A report from the Institute of Management Accountants (IMA) in collaboration with Robert Half indicates that turnover for 18-36-year-old finance and accounting respondents in  the last two years was 39%. Over a quarter of respondents in that age group are also most likely to leave their current employers in the next year, and 8% are considering leaving the profession entirely in the next year.  

Once accounting professionals enter the workforce, how do we keep the best and brightest, when consulting, finance, tech companies, and Wall Street firms beckon? Addressing the retention challenge begins with understanding why people are leaving and where they are going once they leave.  

In fall 2023, the National Pipeline Advisory Group (NPAG) launched focus group polling conducted by state CPA societies and the AICPA to explore barriers and solutions to grow the profession’s talent pipeline. Eighty-nine percent of the 1,600 poll respondents said understanding retention trends was as important as attracting new entrants to the profession. 

As we look to the future, we must create an environment where those who are in the profession are motivated to stay.  

The market today: high turnover, fewer new candidates 

The Bureau of Labor Statistics reported that the U.S. added 353,000 jobs in January 2024, and the unemployment rate held steady at 3.7%, beating economists’ projections. Good news for the economy! The BLS also reports that employment of accountants and auditors is projected to grow 4% from 2022 to 2032, about as fast as other occupations, with 126,500 openings for accountants and auditors projected for each year on average.  

However, the agency also noted, “Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.”  This turnover, together with fewer students entering the profession, is a cause of concern. The profession must pay special attention to identifying solutions around holding onto the talent we already have. Retention in the first five years of an accounting career is an important focus for NPAG. 

Why is talent leaving? Are other pastures really greener? 

To be sure, some accountants are moving on to other careers, and determining whether they are leaving the accounting profession or simply applying their accounting skills differently can be challenging. Many are likely looking for an employer who will offer a competitive salary, provide a culture they fit into, allow for work-life balance, and expect more reasonable hours. According to the Illinois CPA Society’s 2023 report, “Righting Retention: A look into the accounting profession’s greatest management challenge,” the biggest reasons cited for leaving include: 

1. Salary
2. Too many hours/burnout 
3. Lack of work-life balance
4. Workplace culture   
5. Lack of advancement opportunities 

In the initial polling by the NPAG mentioned earlier, the feedback reinforces many of these attrition trends. Over 90% of respondents agreed or strongly agreed that the ongoing high volume of work makes accounting feel like a more challenging career. And, 41% reported that the highest rate of turnover occurs when employees hit the three to five years.

What can we do now? 

None of the reasons for the turnover cited above are insurmountable, and a first step is communicating with employees to better understand what they want and expect. And, while “more money” feels like the most obvious answer, equally important is flexibility and office culture.  

Unless the profession takes decisive action, the pipeline shortage poses a risk to the future of the profession, finance departments, and CPA firms in the foreseeable future. Much discussion has focused on ways to encourage more students to pursue a career in accounting, but this is only part of the solution. The only way to completely address the pipeline shortage is to focus on retention strategies geared toward all life stages, from high school to college, new recruits, career changers, and accountants near retirement.  

The NPAG’s mission is to increase the number of people entering accounting, some of whom later go on to earn their CPA. The NPAG is actively identifying solutions to the pipeline shortage, and our initial draft report, scheduled for release in May 2024, will outline some of the best solutions to come out of our research and discussions. We look forward to hearing your ideas, feedback, and input on this most pressing issue. 

Lexy Kessler, CPA, CGMA, is the chair of the National Pipeline Advisory Group. She is the Mid-Atlantic Regional Leader for Aprio and is a member of the board of directors of the Association of International Certified Professional Accountants. For more on NPAG, visit our FAQs page.  

The National Pipeline Advisory Group (NPAG) is committed to developing a unified strategy that increases the number of people who choose a career in accounting. To ensure any recommendations are grounded in data and reflect the needs of multiple stakeholders, the advisory group is pursuing several research and outreach activities. Findings from these efforts are helping NPAG identify root causes of pipeline attrition, prioritize key areas for improvement, and ultimately shape solutions.   

From August to December 2023, NPAG partnered with state CPA societies and accounting firms to poll more than 1,600 stakeholders about pipeline trends. The majority of respondents work in public accounting (49%) and finance or business (37%).   

When asked about the factors influencing students’ decisions to pursue an accounting career, respondents cite work-life balance, starting salaries, and meeting the education and exam requirements.  

According to the NPAG poll, the top pipeline hurdles include: 

• The ongoing high volume of work accountants have been experiencing makes a career in accounting feel more challenging than other careers might be (92%) 
• Students perceive that their starting accounting salary will not compete with other professions (79%) 
• Inconsistencies in the makeup of the additional 30-hour education requirement detracts from its value (75%) and presents too great a hurdle (59%)  
• Students perceive the CPA Exam to be too difficult to study for and pass (69%) 
• Students don’t choose a career in accounting because they don’t know an accountant and lack access to information about the benefits of the career (67%) 
• Students aren’t attracted to an accounting career because they’ve heard negative things about the profession on social media (58%) 

Another key finding shines light on when the profession may be losing talent. Four in 10 respondents (41%) said turnover is highest after three to five years of employment. It’s unclear whether these employees are finding new accounting jobs or leaving the field altogether.

When asked about the relative importance of attraction and retention, 89% of respondents agreed that “it is as important to identify why CPAs leave the accounting profession after they are licensed as it is to work on attracting more accounting students into the early stages of the talent pipeline.” 

While this initial round of polling did not include students or CPA candidates, the results are consistent with findings from many other pipeline studies. These insights also underscore the need for solutions that address every life stage – from attracting students in high school to supporting candidates on the licensure path and beyond. 

In January, NPAG began piloting a national survey on potential solutions to select audiences. Following the pilot, the survey will be open to the wider profession and will remain open for an extended period of time. NPAG hopes to hear from as many people as possible.