When it comes to the accounting shortage, much attention has been paid to the pipeline and to employers’ struggle to hire qualified staff. But another factor exacerbating the shortage deserves more attention: turnover. A new survey by the Illinois CPA Society (ICPAS) sheds light on the causes of turnover, where employees go once they leave, and what employers can do to improve retention.
Turnover at CPA firms averages 15%, according to an INSIDE Public Accounting report, and turnover at professional services firms, including the Big Four accounting firms, averaged 13.4% in 2022. Almost 84% of accounting turnover is voluntary.
Turnover can lead to increased workloads for staff of all levels, and work can “trickle up” as well as down, the ICPAS survey found. The survey polled 433 employees and 449 employers, representing both businesses and public accounting firms, who were current or former members of ICPAS. According to the results, 65% of employers said turnover placed a higher burden on staff at similar levels as the employees who left, and 67% said it increased workloads for staff at leadership levels.
That’s a concern, Geoffrey Brown, president and CEO of ICPAS, told CFO Brew, because it can prove discouraging to younger staff. Younger professionals from smaller firms in Illinois, he said, told him they saw new partners doing senior- or manager-level work, and it made them question whether there was an “incentive” to advance at their firms, he said, adding that these are “people they should be looking to for models of where they can go career-wise.”
Where departing employees go: About 67% of employers assumed that employees took jobs with businesses, rather than public accounting firms, when they left, and 33% thought they left the profession altogether. But that reportedly wasn’t the case: 62% of accountants surveyed who left their jobs went to public accounting firms. Just 23% went to work for businesses, and only 1% left the accounting field.
The survey data stands in contrast to widely-held beliefs about the typical accounting career path, Brown said. Many people believe that most accountants spend “3, 4, 5 years in public accounting and then go to where the grass is greener—to corporate finance and business and industry—and that’s not necessarily the case,” he said.
The questionable veracity of this narrative is, in some ways, encouraging news for accounting firm leaders: Accountants aren’t leaving because they dislike the work itself, or because they no longer want to work in public accounting, but for other reasons—many of which could be within employers’ control.
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Why accountants leave: The top three reasons respondents gave for leaving their jobs within the past two years were salary (49%), burnout/heavy workload (49%), and lack of work-life balance (48%). Many employers surveyed said they had taken steps to address these issues: 64% said they had increased compensation within the last two years as a means of improving retention, while 60% allowed for remote work and 49% used flexible scheduling.
A deeper dive into the results, though, reveals areas of disconnect between employers and employees: 36% of employees named workplace culture as a top reason for leaving, for instance, but only 10% of employers thought culture was a major reason employees left.
“Ultimately, for me, it comes down to culture,” Brown said. “People will stay at a company if they believe in the culture, they support it, and they understand what they’re working towards.” The disconnect, he said, arises from the fact that leadership’s vision for a culture “doesn’t always trickle down” to more junior employees. There are “a number of levels between the people that are trying to advance the culture and the people that are called upon to implement it,” he said.
Culture is an opportunity for “smaller [or] midsize firms who may not have the flexibility on salary” to move the needle on retention, Kristin McGill, VP of member experience and engagement at ICPAS, told CFO Brew.
According to the results, 27% of respondents said they left their jobs in search of advancement opportunities, while 15% said that lack of a defined career path was a key reason for their departure. Leaders should realize that young staff may have different views on an acceptable time frame for advancement, McGill said.
“They’re not thinking three or five years out,” she said. “They want to find out what the value is for them…They want to understand what the mentorship opportunities are a little bit sooner in the game.”
Ensuring staff understand career paths can only benefit employers, Brown said. “Across all firm segments, everybody says that they want experienced talent, and we have this pool of experienced talent” available “if we can just nurture them and make sure they get to that level,” he said.