Certified Shortage: Qualified Accountants in High Demand

Certified public accountants make good money and there are plenty of jobs for recent graduates and seasoned professionals. But accounting firms across the country and in Northwest Arkansas have a problem: there’s not enough qualified accountants to go around.

According to the latest report by the Manpower Group, a human resources consulting firm based in Milwaukee, accounting and finance jobs are among the hardest to fill. And according to the U.S. Bureau of Labor Statistics, Northwest Arkansas has a 0.6 concentration of public accountants, but, ideally for an area of this size, the concentration should be 1.0.

The partners at some of the region’s top CPA firms all agree: The shortage in Northwest Arkansas is an issue and, when it comes time to recruit talent from outside this region, the results are, at best, mixed. The ability to make partner, land a huge salary and spend the weekends boating on Beaver Lake is there, but there aren’t as many takers as expected. 

The University of Arkansas has continued to build its accounting program. From 2004 to this year, students enrolled in accounting grew by 69 percent, from 384 to 650, and enrollment in the five-year program known as IMAcc (Integrated Master of Accountancy) continues to increase. But, even with that growth, accounting students are outnumbered by those in marketing at 699, business at 1,104, and health, human performance and recreation at 1,639, according to university enrollment figures.

The fact that UA is in Northwest Arkansas benefits the region’s accounting firms because there’s always a new crop of talent. But when it comes to experienced CPAs — those who can confidently manage and build wealth for an established company, for example — the pickings are still pretty slim.

Barbara Hambrick, managing member of Beall Barclay & Co. PLC, a top firm with offices in Fort Smith and Rogers, had this to say about the problem of manpower: “The shortage is very real in Northwest Arkansas. It’s not hard to hire an accountant straight out of college, as a lot of the UA students want to stay in the area, but there is a real issue when looking for experienced people.”

 

Classroom Vs. Boardroom

On a national and even global level, the issues are comparable to what’s happening in Northwest Arkansas. Despite a strong job market with strong salaries and good opportunities for advancement, employers are having trouble finding the right person for the job.

According to the Manpower report, which is based on the responses of over 37,000 employers in 42 countries, key talent shortages in skilled trades, which include accounting and finance, are caused by insufficient “hard” technical skills, lack of “soft” workplace competency, and, in many instances, a sheer lack of available applicants. According to the Manpower study, employers are reacting to the talent shortage in a variety of ways: Hiring applicants who have the potential to learn the skills they lack, searching for untapped talent pools and adopting new work models.

While the Manpower study points to the end result of the talent shortage — employers looking for employees — Jeff Thomson, president and CEO of the New Jersey-based Institute of Management Accountants, looks to what he says is the root of the problem.

“The accounting curriculum at many U.S. colleges and universities focuses on audit, tax, and compliance work — those skills that prepare students for entry-level public accounting jobs,” Thomson said. “The reality is that nearly 75 percent of accountants in the U.S. aren’t doing public accounting work. They are working in management accounting roles inside companies, where job duties are different … For a variety of reasons, schools haven’t kept pace with the profession and fail to prepare students for the long term.”  

Other issues facing the accounting industry, according to the American Institute of Certified Public Accountants, is that an estimated 75 percent of CPAs will hit retirement age over the next seven to eight years, triggering the need for serious succession planning. The accounting industry also faces a shortage of professors, which has caused the AICPA to implement the Accounting Doctoral Scholars program, sponsored by hundreds of accounting firms, to encourage CPAs to enter academia. Graduates of the program just recently started teaching classes.

For Thomson, the only way the accounting industry can solve its problems is for everyone to be involved.

“Schools need to collaborate with businesses to teach relevant material,” he said. “Businesses need to work with schools to contribute to education and offer more internship experiences … All of the accounting profession’s stakeholders need to collaborate to find solutions to the problem.”

Dan Prier, a partner at Prier Burch and Schermerhorn CPAs in Fayetteville, echoing Thomson’s remarks, said he feels the disconnection between what schools produce and what accounting firms need.

In his experience, it’s not only difficult to recruit CPAs to come to Northwest Arkansas, but it’s also tough to find people who can do the work. In business for nearly 40 years, Prier has extensive knowledge of the region’s market and its inherent weaknesses.

“It’s hard to find good-quality, hard-working, experienced people for bookkeeping and accounting in this area,” he said. “I do not know why. It’s our greatest need. Getting new clients and work is easy. Getting knowledgeable people to get the work done is very hard.”

 

Big Difficulties

Part of what ails the accounting industry, at least in the opinion of Keith Ekenseair, a CPA and partner with Frost PLLC in Fayetteville, is the memory of the financial crisis. It damaged revenue streams and caused reductions in hiring levels as well as attrition. The result is that accountants are ever cautious about how they manage their career.

“The local market is very tight,” he said. “We’re seeing few accountants moving around like we used to.”

Speaking to the sedentary nature of today’s accountants, Ekenseair said the recession still haunts the industry and the economy in which it operates.

“People buckled down and were afraid to change jobs,” he said. “Nobody wanted to be the low man on the totem pole. People have just decided to stay put, and there’s still some uncertainty with the economy.”

In terms of luring accountants here from other areas, Ekenseair said it still remains a difficult sell. If an accountant has some kind of familial tie with Northwest Arkansas and already knows about the area, the process is not so difficult. But to pry an accomplished CPA out of a major metro like Dallas-Fort Worth is not so easy.

Hambrick, who has been at Beall Barclay for her entire 20-year career, agrees. But where Ekenseair was reserved in his assessment of the issue, Hambrick was blunt.

“We promote the outdoor activities that are available, along with cultural events, but there seems to be a stigma about Arkansas as a whole,” she said. “The biggest difficulty we face is the difference in pay offered from those recruiting from other cities.” 

And then there’s the brain drain. Each year, the Big Four — Deloitte, PwC, Ernst & Young, and KPMG — gobble up tons of talent. If a student is geared toward latching onto a Big Four firm, regional outfits don’t have a chance.

But that doesn’t mean firms like Frost and Beall Barclay don’t try. Each year, Frost and many other firms visit a handful of campuses looking for young talent.

“That’s part of the business model and we’re not unique in that regard,” Ekenseair said.

While plenty of budding accountants are star struck by firms like Deloitte — “For some students that’s all they think about,” Ekenseair said — smaller organizations have a recruiting edge in that they can offer public accounting over a vast range of fields including small and large businesses, individuals, audits and taxes, consulting and estates.

Still, going head-to-head with firms like Deloitte is difficult, especially when the accountant is fresh out of school.

“We don’t really compete against the Big Four in work, but when it comes to recruiting, it is very hard,” Hambrick said. “Those firms tend to pay people more money and work them a lot more hours. Just coming out of school, the money is always more important.”

Most accountants will work in public accounting anywhere from two to four years before deciding if they want to remain in public accounting or make the transition to private accounting for a large company like J.B. Hunt Transport Services or Tyson Foods Inc.

“You get exposed to a lot of different things in public accounting,” Ekenseair said. “That helps them figure out what they want to do.”

While the longstanding stereotype of accountants is that they are cold, bean counters, Ekenseair said that’s not accurate. Accountants have to build trust and comfort and are counted on to be an effective agent in the process of building wealth for businesses and individuals.

“People think of it as black and white, but it isn’t,” he said. “It gets complex.” 

With the CPA shortage entrenched, it’s perhaps no surprise that an accounting arms race has broken out at campuses across Arkansas and the nation. The Big Four, eager to land the most talented and ambitious students, make their claims early and often, said Todd Wisdom, an assurance partner with HoganTaylor LLP in Fayetteville.

“It’s difficult to compete with the Big Four on the recruiting front, as recruiting is no longer about hiring accountants in their last year prior to graduation,” Wisdom said. “It’s about recruiting them through the internship process, making offers and receiving acceptances before they ever have to interview for the job.”

Once a firm has an accountant, it does what it must to retain them. Outside of great pay, incentives that might be offered include sabbaticals, flex time, work sharing and working from home. But accountants are human beings and the industry is not impervious to the ebb and flow of their wants and needs.

“Most accountants who decide to start in public accounting leave,” Wisdom said. “Reasons for departure vary greatly, but everyone can’t be a partner and many find they don’t want to be.”

As the ongoing competition for talent continues, Northwest Arkansas will continue to face pressure from large, powerful firms offering recruits excellent salaries, big-city locales and eye-popping entries on the résumé. But, as the competition continues to unfold, maybe the odds will slowly tip in this region’s favor.

“It’s difficult to get anyone to come here from other areas if they originally had no ties here,” Wisdom said. “However, once they’re here, it’s just as difficult to get them to leave.”