As people leave an organization, there is a significant increase in pressure on the ones who stay. And this is a continuous loop. Since 2020, more than 3 lakh accountants have already quit their jobs and more continue to do so. While everyone in the accounting profession is aware of the declining number of resources in the industry, the burning question remains, why so many accountants are quitting?
In a recent interview, Geoffrey Brown from the Illinois CPA Society pointed out an interesting fact – it is the mentality. What he means by this is that when CPAs and accountants join a firm they know that they will have long hours. But when their expected 50 hours become 70-80 hours, the scenario changes.
The world of accounting is known to provide stable work, decent wages, and long-term security to those who choose to work in the profession. But today, that is no longer enough to keep accountants tied to the industry.
In this article, Finsmart Accounting – trusted globally for outsourced bookkeeping services – will share major reasons behind accountants quitting public accounting firms and tips to reduce attrition rates.
Why are Accountants Quitting?
The reasons why accountants are quitting public accounting firms are multi-faceted. Let us explore:
– Salary increase? Out of the picture
One of the major issues that accountants face is a stagnant salary. To answer the question of why accountants are quitting, we need to take a look at the pay band over the last 20 years, where the pay hasn’t gone up significantly, but prices of consumer goods and inflation have. The work hours are long, way longer during the busy seasons. They find themselves disillusioned by the lack of growth in monetary terms. They feel that despite their skills and expertise being used to the optimum level by the firms, their efforts aren’t appreciated enough. In many top firms, the starting salary continues to remain the same even after a decade.
Without competitive compensation as their peers from another industry receive, they feel undervalued, and demotivated, leading them to seek opportunities elsewhere. Living and lifestyle costs continue to rise, and stagnant salaries further strain their financial stability, prompting accountants to choose alternative careers with better rewards.
– All work, no life
Work is an integral part of the life we talk about. That does not mean that accountants should be left with no personal time of their own. While accountants do understand the busy season, there is a catch. Firstly, most often there are multiple busy seasons that accountants feel they did not sign up for. Secondly, they do not get paid enough for the extra hours they work for. Third, accountants seldom have clarity on how long the “long hours” are. The young generation of accountants prefers flexibility, and time for themselves and their families.
During the tax season, many firms require accountants to work for 70 hours or more. This season starts in mid-January and goes on till the middle of April. This means for about 4 months a year, they cannot commit to anything in their personal life. Even if some firms do pay overtime, often that is not in the regular pay cycle, where employees and their families can see tangible benefits soon. Today, many accountants prefer to complete their work in the due time, in the absence of overtime. And when they find an inclusive supportive model outside of the public accounting firms, they tend to quit.
Recommended: Accountant hiring tips and ideas for CPAs and accounting firms.
– Hard to find growth opportunities
When questioned about growth opportunities, many accounting firm leaders often dodge the question, because “stagnancy” is key in public accounting. While firms are trying to accommodate diversity, accountants often cannot picture themselves associated with the organization in the long term. Consistent promotions and growth opportunities give hope to everyone in the firm. Sometimes, accountants quit because they face stringent and micromanaging leadership, even if they love the work. After all, there are many facets to why an employee would want to be associated with an organization.
Many accountants also quit not because there are no growth opportunities, but simply because they do not know about them. It is the responsibility of the firms to make employees aware of the opportunities if that is the case. The easiest way to stop bookkeepers and accountants from quitting!
– Monotony and burnout
Accounting does tend to get boring at times. Especially if it is a smaller accounting firm, they provide limited services to clients. In pursuit of fulfilling the high volume of mundane tasks, accountants get stuck in a rut. They lose purpose and motivation and that is one of the top reasons why so many accountants are quitting. Today, consultants and private firms provide advisory services to clients, which makes room for accountants to explore, learn, grow, and expand their horizons.
Besides being a result of long work hours, burnout is also a result of voluminous, tedious, repetitive tasks, which is how public firms operate. Monotony and burnout often lead to the chances of increased errors, leading to loss of business and reputation and accountants feeling a loss of purpose. This is a major reason why accountants and bookkeepers are calling ‘I quit’
Accountants are quitting public accounting, not the profession altogether
The question of why accountants are quitting has several layers to it. While public accountants are leaving their roles in public accounting firms, they aren’t necessarily quitting the profession altogether. They are choosing roles that give them more flexibility and avoid burning out. Their alternative career paths are focused on work-life balance, growth, and overall job satisfaction. When accountants quit the most common option that they choose is the corporate sector, where there is a clear distinction of roles – they can choose between financial reporting, internal auditing, management accounting, or advisory roles in accounting across different industries.
Other options that public accountants choose after quitting include government agencies, non-profit organizations, or academia. Some accountants also use their expertise in accounting and multitasking abilities to start their firms. What they are trying to achieve is to break the culture of unnecessary hustle and prioritize themselves while doing what they love and are experts in. Stability, career progression, and alignment with their personal and professional goals are some of the top reasons that make public accountants seek an alternative path.
Read on to discover what leaders can do to reduce the accountant attrition rate in 2024 or learn about accounting outsourcing services cost in India.
What can leaders do to reduce the attrition rate in 2024?
Times have changed and there is a dire need for public accounting firms to change their approach toward hiring and retention. As modern-day accountants continue to seek a better balance between the personal and professional, this becomes imperative. Here are some of the ways that leaders should resort to reduce the attrition rate this year:
– Rethink the compensation strategy: Compensation isn’t limited to a fixed salary. This year, public accounting leaders should focus on realigning the salaries and benefits as per industry standards. You must regularly review and adjust the compensation structure, which should be indicative of the value of employees’ contributions. This should aim to address concerns around stagnant salaries. Additionally, leaders should also rethink offering perks of flexible work arrangements, and professional development programs, that should help enhance employee satisfaction.
– Encourage and support work-life balance: We are in 2024. The world is moving fast and so should our mentality. While the work public accountants do is of immense importance, leaders should also identify stress and the need to take breaks. Employee well-being is paramount and ensures productivity. If you want your firm to continue excelling, it is high time that you focus on your employees. Burnout and stress are real – promoting work arrangements and introducing wellness programs that educate and spread awareness are important. Make sure that as a leader, you do your bit to build a positive work culture.
– Career development opportunities: The new generation of accountants no longer wants a job that has no growth graph, especially in the name of stability. As a leader, it is your responsibility to implement clear and transparent career progression paths that give employees a clear idea of opportunities for growth, skill development, and advancement within the firm. Mentorship programs and training initiatives are also incredibly important for employees to learn responsibility and ownership. Accountants want to stay with firms that value their contributions and demonstrate a commitment towards their growth.
– Culture and communication: Diversity and inclusion is a talk that you need to have at your workplace. A culture that makes employees feel included, valued, respected, and supported is key. Encourage dialogue, and feedback and ensure transparency. At times of crisis, your employees should be able to talk to you and seek help instead of just quitting. Investing in a strong organizational culture can help strengthen employee engagement and loyalty, reducing turnover rates in the long run.
Why are accountants quitting public accounting firms
The first step to solving the talent shortage problem in the accounting and bookkeeping sector is to acknowledge the elephant in the room. Being delusional and not understanding that your public accounting firm has a problem will leave you more confused about the question of why so many accountants are quitting. In the post-pandemic world, the way we operate needs to change to include the changing demands of the workforce and that is the only way we can succeed.
If talent shortage has been a persistent problem for your firm, no matter what you do, you should consider outsourced accounting services. Write to us at connect@finsmartaccounting.com to get started.
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Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
