Accountant shortage has companies big and small struggling
Let us direct your attention to United States Securities and Exchange Commission Form 12b-25, Notification of Late Filing. That’s the form publicly listed corporations have to fill out if they think they’re going to be late reporting their numbers to investors.
Raleigh, North Carolina-based Advance Auto Parts had to file one of those Form 12b-25s recently, but what’s interesting here is the reason why. Basically, it had turnover in its accounting department and couldn’t “attract, develop and retain sufficient resources” to get its filings out on time.
Advance Auto Parts isn’t alone. Other companies big and small are struggling with a national accountant shortage, one that starts on college campuses.
When Drew Niehaus was young and single, going out in New York in the early 2000s, let’s just say some nights he’d have second thoughts about his career choice.
“My friends in finance would give me a hard time when we were talking to girls in bars or something like that and they’d introduce me as a tax accountant,” Niehaus said.
His friends were investment bankers and Niehaus was an accountant, but not a tax accountant.
“And so I would lean into that right? ‘Oh, I don’t do audit. I don’t do tax. I do this more sexy accounting work.’ Right? Let me tell you, that did not work,” he said.
Accounting has never been sexy, especially to young people not yet aroused by the thought of a nice 401(k) match. Although somewhat similar jobs are luring away potential accountants.
“Data analytics jobs are taking off, and we do a lot of the same things, just in a specific setting,” said Josh Herbold, who teaches accounting at the University of Illinois Urbana-Champaign.
The number of students who got accounting degrees dropped 9% over roughly the last decade. And the traditional accounting path of working very long hours for a very big firm before making very big money isn’t a viable model these days, Herbold said.
“It’s not like it was even 30 years ago where you knew you were going to be overworked for a couple of years and you just had to deal with it. Students today have lots of options,” Herbold said.
Accounting firms are trying, offering more remote work and better pay.
And that should help another of the industry’s goals: more diversity, said Jina Etienne, former CEO of the National Association of Black Accountants.
But step one is just getting more accounting majors, period.
“We’re going to need to see a steady pipeline of students coming out of college. And that pipeline inherently will be more diverse, because the demographics of our country are becoming more diverse,” Etienne said.
In recent years, more women and Latinos have become accountants. But according to the American Institute of CPAs, more than 60% of the new accounting hires are white.