Three young adults walking through a maze of blue blocks.

Higher salaries, flexibility, and office culture are key to keeping accountants on the job 

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.