Ask the Expert: Eric Kelley, Finance and Accounting

In this edition of ‘Ask the Expert’, Eric Kelley, who leads Addison Group’s Northeast Finance and Accounting Executive Search practice, shared some of his insights on popular workforce trends. We sat down with Eric as he told us his thoughts on the Certified Public Accountant (CPA) shortage and how companies can attract CPA talent.

What are the current challenges around the CPA shortage?

There’s been a national dialogue surrounding the CPA shortage over the past few years as it’s becoming more problematic. People are choosing not to enter the profession due to long hours and the difficulty in passing the CPA exam. People will regularly fail portions of the exam and either need to retake it or simply choose to not to retake it given the costs and time required to prepare. Due to how challenging it is for people to earn their CPA, KPMG called for alternative pathways for CPA licensing.  Industry leadership has recognized that the CPA exam process has become a barrier to entry for young professionals choosing to enter the accounting field.

Many states have begun to examine their current CPA requirements. Currently, most states require 150 credit hours—which usually requires a master’s degree in tax or accounting –to take the CPA.  A proposed idea would be to create an alternative path with a year of work experience being substituted for a fifth year of school, with a lower credit hour threshold. Ohio recently made this change and Minnesota and Arkansas seem primed to soon follow.

How are the CPA shortages impacting companies? How can they attract CPA talent?

For publicly traded companies, hiring CPAs is often imperative, primarily due to investor and SEC quarterly and year-end reporting.  Given the legal requirements, and potential financial penalties for not meeting these standards, having a technical and high performing accounting team is a must.  Even if the staff may not be signing off on financial statements themselves, the CPA exam is a valuable tool to ensure the knowledge and standards of their team.   

With the total number of CPAs dwindling, specific SEC reporting and technical accounting roles have a more limited candidate pool than those they may feel comfortable hiring into GL accounting roles.

To attract CPA talent, companies need to provide a good candidate experience. This spans the entirety of the candidate and employee lifecycle including a transparent interview process, strong compensation at (or often above) market rates and ongoing career opportunities including a clear promotion or advancement track and support with their annual CPE credits to maintain the CPA.

Companies that do not recognize the CPA shortage and take the candidate experience seriously can find themselves with an even more limited pool and often need to extend beyond their local area to hire or invest additional resources into a non-CPA for training.  Retention is also critical as ignoring the high demand and taking a CPA employee for granted may open them to entertaining strong offers from competitors.

When is hiring a CPA a good idea? When is it beneficial for someone to get their CPA?

If a company is not going to invest in a long-term career track for a candidate, it doesn’t make sense for them to hire a CPA. If you can’t offer long-term growth or strong compensation, CPAs are at risk of being recruited by other organizations. Ultimately, it’s not just about recruiting them to your company but how you can give them a desirable career track.

For example, if someone starts in a technical accounting or SEC role, you can’t expect them to stay in that role for the next five years with no growth. It’s likely they’ll leave in two years, and you will lose their historical knowledge of the company. To retain them, you should have open conversations about what type of career they want and set expectations and timelines for that growth. Even if they end up in a different function outside of what you initially hired them for, at least you keep that historical knowledge, and they stay within the organization.

From a candidate’s perspective, if their long-term goal is to be part of a privately held company, they may not need their CPA. However, if they come from a non-traditional background like general business, economics, or art, it’s beneficial to demonstrate that they understand accounting at a technical level despite not having the traditional public accounting foundation that many CPAs do. In these cases, even people with a desire to work in a privately held organization may benefit from their CPA to demonstrate their technical knowledge, and ability to complete what is well-established as a challenging task – passing the CPA exam.

Need to hire finance and accounting talent for your team?

Need qualified finance and accounting candidates to add to your team? Addison Group can help. For more than 20 years, we’ve focused on quality, not quotas. We place qualified finance and accounting talent to help move your business forward. Let’s talk about how we can help fill your open positions.