(4 Minute Read)
The finance and accounting sector is fundamental to the operation and growth of business. The American Institute of Certified Public Accountants (AICPA) estimates that about 75% of CPAs will retire in the current decade. Sourcing qualified professionals in the finance and accounting field has become increasingly difficult.
Here are four key reasons why finding qualified finance and accounting employees is so challenging.
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Limited Talent Pool
There are several factors which contribute to the current talent shortage and restricted talent pool. Despite a growing demand for finance and accounting professionals, the number of individuals entering the finance and accounting field is not keeping pace. The gap is especially pronounced in specialized roles such as forensic accounting, risk management, and financial analysis.
Primary Contributing Factors:
- Many seasoned professionals are reaching retirement age, leading to a loss of experienced talent.
- There are not enough younger professionals to fill their positions. The number of graduates in finance and accounting is currently insufficient to meet market demands. A report from the American Institute of Certified Public Accountants (AICPA) found a 33% decline in first-time candidates taking the national certified public accountant (CPA) exam from 2016 to 2021.
- The “150-Hour Rule” has further limited the attractiveness for people to go into the accounting field.
- Not all educational programs are aligned with current industry requirements. The finance and accounting landscape is evolving rapidly due to technological advancements and changing regulatory frameworks. Today’s professionals need a blend of traditional accounting knowledge and modern technological skills.
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Complex Regulatory Environment
The finance and accounting industry operates under one of the most stringent regulatory frameworks of any sector. Compliance with a myriad of local, national, and international regulations is essential, and this regulatory complexity significantly contributes to the difficulty in finding qualified professionals. This environment demands that finance and accounting employees possess a deep and dynamic understanding of various regulations, which are continuously evolving. Compliance with a myriad of local, national, and international regulations is essential, but it requires professionals who are well-versed in not only Generally Accepted Accounting Principles (GAAP), but often a need exists to possess additional skill sets around regulatory staples such as:
- International Financial Reporting Standards (IFRS)
- Sarbanes-Oxley Act (SOX) Compliance
- Anti-Money Laundering (AML) and Know Your Customer (KYC) Regulations
- Dodd-Frank Wall Street Reform and Consumer Protection Act
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Demand for New Skills
The finance and accounting field is undergoing a significant transformation, driven by technological advancements and evolving regulatory landscapes. Professionals in these sectors are required to master a blend of traditional accounting skills and new competencies. These include proficiency in data analytics to interpret vast datasets, expertise in advanced financial software, and a thorough understanding of international financial reporting standards (IFRS). Knowledge of blockchain technology and its applications in financial transactions is becoming increasingly important. As a result, the demand for finance and accounting professionals who can navigate this complex, dynamic environment is higher than ever. Finding candidates who possess this combination of skills is challenging, as many educational and training programs lag behind incorporating these emerging competencies into their curriculum.
Examples of New Skills Needed:
- Data Analytics: Ability to analyze and interpret large datasets to derive actionable financial insights.
- Technological Proficiency: Familiarity with advanced financial software, enterprise resource planning (ERP) systems, and blockchain technology.
- Regulatory Acumen: Understanding complex and frequently changing regulatory requirements.
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Additionally, the highest ethical standards are mandatory as you seek candidates who possess these skills., making the recruitment process more rigorous and selective. This complexity necessitates thorough vetting of candidates, including background checks and verification of credentials, which can further limit the pool of qualified candidates.
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Competition in Identifying and Recruiting Candidates
Recruiting top-tier finance and accounting candidates poses substantial challenges, as competition for talent extends beyond the industry itself. Sectors such as technology, consulting, and startups actively seek individuals with strong analytical and numerical skills, creating a competitive landscape for qualified professionals. These industries offer enticing perks, including innovative work environments, competitive salaries, and promising career trajectories, often surpassing traditional finance roles in terms of allure. Moreover, the pull of working in dynamic, forward-thinking industries can pull potential candidates away from a more conventional finance and accounting sector. The increased demand from diverse sectors not only shrinks the available talent pool but also intensifies the pressure on finance and accounting firms to offer compelling incentives and career development opportunities to attract and retain top talent. Consequently, recruiters and hiring managers in finance and accounting face the formidable task of navigating multifaceted competition to secure the most skilled and sought-after candidates for their organizations.
This broad demand across different fields diminishes the availability of skilled candidates for traditional finance roles, further complicating recruitment efforts and intensifying the battle for the best professionals. But there are strategies to deal with this.
- Offer attractive compensation packages: To compete with other industries, finance and accounting firms should provide competitive salaries and additional perks to entice top professionals.
- Provide career growth opportunities: Clearly outline career advancement paths within the organization, offering opportunities for ambitious candidates to progress quickly in their careers.
- Foster innovative work environments: Create a dynamic and forward-thinking culture that rivals the appeal of tech firms and startups, attracting candidates seeking a stimulating workplace.
- Invest in professional development: Provide continuous learning opportunities and support for career progression, demonstrating a commitment to employee growth and development that aligns with candidates’ career aspirations.
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The difficulty in finding qualified finance and accounting employees stems from a combination of a limited talent pool, evolving skill requirements, intense competition, shifting candidate expectations, and a complex regulatory environment. Addressing these challenges requires strategic efforts from employers, such as investing in employee development, utilizing outside resources, offering competitive compensation, and creating a supportive and flexible work environment. Partnering with a qualified staffing firm who understands this environment is a growing consideration. Companies can better attract and retain the talented professionals needed to thrive in today’s dynamic financial landscape, by understanding and taking proactive steps to mitigate these issues.