If “shrinking pains” are a thing, then the accounting profession’s feeling them.
With baby boomers retiring and fewer young people going into accounting, employers are finding it hard to land accounting and finance talent. That’s led to some alarming consequences, such as filing delays and a rise in accounting errors.
But the accounting field’s seen similar fallow periods in the past—and it’s been able to weather them, Barry Melancon, CEO of the AICPA, told CFO Brew. “We have had times in this profession where the supply-and-demand equilibrium was not right,” he said, but observed that “the profession has grown consistently despite what the economy does.”
Melancon speaks from long experience: He became a CPA in 1980, when general ledgers were still printed on paper and desktop computers were just coming into vogue. He’s headed the AICPA since 1995, and has announced his retirement for the end of this year.
Melancon likens the current moment, when potential entrants to the accounting field are being lured away by higher-paying fields or trendier careers in AI or data science, to the dotcom boom of the 1990s. Then, many young people opted for jobs in the new frontier of the internet rather than go into accounting. “We went through a period of about seven to 10 years where competition in that new and emerging world was a pretty big drain on the high performers that are typically attracted to our profession,” Melancon said.
And, he noted, the accounting shortage is unevenly distributed around the globe. While countries like the US, Japan, and EU nations are short on accountants, other regions of the world, like Asia, Africa, and the Middle East, have an oversupply of them.
Changing perceptions and business models: Though having a historical perspective is important, Melancon also acknowledges that the profession needs to make some changes to become attractive to young people once more. “One of them is to tell a different story about the profession,” he said, noting that sometimes accountants focus on the negative aspects of their careers, such as long hours or constantly changing standards. Instead, he suggests, the profession should emphasize purpose and that it's "trusted in a world with not a lot of trust." “What we do is really exciting and is a lifeblood for business success,” he said.
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Accounting and finance organizations’ business models need to evolve, Melancon said, particularly in public accounting. It’s no longer “a given” that entrants to the field will need to work “extraordinarily long hours,” he said. And higher starting salaries could also help move the needle: “We have to make sure starting salaries are competitive with other disciplines’,” he said.
Today’s accountants need to do more, faster: And accounting is becoming a more cognitively demanding profession. Today, Melancon said, accountants need to be proficient in multiple “capitals” alongside computational skills, such as “relationship capital” and “controls and measurement and storytelling and decision-making,” he said.
What’s more, he said younger accountants are being asked to develop these additional skills earlier in their careers so they can start affecting business decisions more quickly. “As a young management accountant, you’re expected to be a business partner and help to make the right decisions in a much different way than in the past,” he said.
Your org chart may soon resemble Homer Simpson: Accounting firms’ and functions’ organizational structures are shifting as a result, Melancon said. Instead of “pyramids” with wide bases of entry-level accountants that taper with each level of experience, org charts have gained a “fat middle.” Finance professionals with skills like “business acumen and strategy and risk and communication skills” will occupy the middle, he said, adding that educators and employers will both be challenged to build entry-level accountants’ skills more rapidly.
The upside to this increased demand for skills is that it will create the kind of jobs young accountants want, Melancon said. It expands their horizons and “they are viewed as way more valuable” than they would be in pure compliance roles, he said. But employers need to recognize this desire to contribute more sooner. Younger staff don’t want to wait for career advancement to see “the return on their learning and skills,” Melancon said. He advises CFOs and finance leaders to give newer finance staff “opportunities to be exposed to what the business is” so they can apply what they’ve learned earlier in their careers.