Tupperware—that “burping” brand you may have taken your sandwich to work in today—is the latest company to fall victim to the accounting shortage.
The company announced it would delay filing its annual report due in part to internal control issues stemming from a lack of accounting staff, the Wall Street Journal reported. “Significant attrition” in its accounting department contributed to material weaknesses, and it needed to take additional procedures to address them.
Tupperware’s hardly the only company grappling with this shortage: In the first half of 2023, almost 600 US-listed companies reported material weaknesses resulting from personnel issues— 40.6% more than in the first half of 2019, data from Bedrock AI reported in the Wall Street Journal shows. Even larger companies, such as Advance Auto Parts, LegalZoom, German biotech Evotec, and air taxi company Joby Aviation, have reporting problems due to staffing shortages.
Filing delays and admissions of material weakness can cause investors to worry restatements are on the horizon, Geof Brown, president and CEO of the Illinois CPA Society (ICPAS), told CFO Brew.
In general, a shortage of accounting staff can lead to “errors, under-performance, and diminished decision-making capability,” Michael DiPrisco, president and CEO of the Institute of Management Accountants, told CFO Brew in an email. It can inhibit internal controls such as segregation of duties. That can be a risk, Brown said.
But, these days, retaining and hiring accountants can be a challenge. There are 340,000 fewer accountants in the US than there were 5 years ago, a Bloomberg analysis of Bureau of Labor Statistics data shows. Many accountants are retiring while, at the same time, fewer students are joining the profession, DePrisco said, and stress and burnout can harm retention.
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“We’ve got a long road ahead,” in terms of solving the accountant shortage, Brown acknowledged.
Keys to retention: Still, there are steps companies can take to recruit accounting staff while holding on to the employees they have. Making sure salaries and benefits are competitive are things both Brown and DiPrisco suggested. Be sure that staff feel their concerns are heard, Brown said, citing a recent ICPAS survey that showed how important culture is to retaining accountants.
“People want to hear from their supervisors early and often. They want to know they can come to you when things are good, but also talk to you when things are going badly,” he said. That, he added, “creates the conditions where people want to continue working where they’re working.”
Automation can also take some of the pressure off staff. “A better and faster integration of the latest technology into the finance function can help mitigate the compliance burden and burnout among accountants,” DePrisco said.
CFOs, he said, can act as advocates to ensure accounting staff have reasonable “compensation, work-life balance, value, and purpose.” All these are factors that are “important to the next generation of professionals,” he observed.
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