Accounting Hiring Trends and Challenges
What are some of the major challenges facing the accounting profession?
Major challenges accounting firms face include adapting to technological disruptions like AI and cloud computing, addressing staffing shortages and recruitment difficulties, meeting rising client expectations, complying with evolving regulations, enhancing data analytics capabilities, and maintaining cybersecurity.
If you’re on the hunt for accounting staff in your organization, you are not alone. While talent recruiting challenges are visible across all industries, the latest accounting hiring trends suggest they are particularly significant in the financial services sector.
According to a PwC report on the talent supply in the field, more than 25% of CEOs said they had to abandon or postpone a crucial strategic initiative in the last 12 months because the proper people were not available to execute it. This is not a new issue – businesses around the world have struggled to recruit qualified employees for a long time.
A combination of factors makes recruiting for the accounting department difficult, but there are several things HR teams can do to identify and screen top talent for these critical business roles.
Accounting Industry Growth
In 2020, the global market for accounting services was valued at a substantial $544.06 billion. Projections indicate that this figure will climb to an impressive $735.94 billion by 2025, reflecting a steady annual growth rate of 2.9%.
This upward trajectory underscores the increasing demand for accounting services worldwide.
But the accounting industry growth is not just about the numbers. A whopping 90% of accountants worldwide believe there’s been a major cultural shift in the industry.
This could be due to advancements in technology, changes in regulations, or evolving client expectations. Whatever the cause, it’s clear that the accounting industry is adapting to meet new challenges.
Accounting Hiring Trends: Skill Shortage is An Ever-Growing Issue
The accounting field is facing a significant challenge due to a decrease in the number of people entering and staying in the industry. This is causing problems for both public and private organizations. Below are some of the recent accounting hiring trends.
In the last two years, more than 300,000 accountants and auditors in the United States have left their jobs. This has resulted in a 17% decline in the number of accountants and auditors employed from the peak year of 2019, according to an article by The Wall Street Journal.
Based on a report by the Bureau of Labor Statistics, this great resignation consists of retiring Baby Boomers, young professionals in the 25-to-34 age range, and mid-career professionals aged 45 to 54 leaving the accounting profession.
Although many experienced accountants are moving into jobs in finance and technology, recruiters also face challenges when trying to source accountants with skills needed in the modern workforce.
Organizations now desire accounting departments fluent in financial, accounting and tech skills such as AI, process automation, and machine learning.
Despite experienced accountants making their exits, the demand for accounting professionals remains high. The Bureau of Labor Statistics predicts an average of 126,500 annual job openings for accountants and auditors from 2022 to 2032. Many of these new positions will result from transfers to different occupations or retirement.
Skills Shortage In Accounting: Consequences for Employers
The accounting industry is in crisis due to a severe shortage of skilled professionals, which has far-reaching consequences for employers. Here are some key implications and how they impact businesses:
Recruitment Challenges: Employers struggle to find qualified accounting professionals, leading to extended hiring processes and increased recruitment costs. This can hinder business growth and project timelines.
Employee Retention: The shortage intensifies competition for skilled accountants, making it challenging for employers to retain top talent. High turnover rates can disrupt team dynamics and result in knowledge loss.
Increased Workload: With fewer qualified accountants, the workload of existing staff increases, leading to burnout, reduced productivity, and potential errors. This can affect the overall quality of accounting services and financial reporting.
Outsourcing and Offshoring: Some employers may turn to outsourcing or offshoring accounting functions to access a wider pool of talent and reduce costs. However, this can create challenges related to communication, cultural differences, and data security.
Impact on Financial Performance: The skills shortage can hurt the timely and accurate preparation of financial statements, which can delay decision-making and affect investor confidence. This can have implications for access to capital and financial stability.
Reduced Innovation and Growth: A lack of skilled accountants can limit a company’s ability to implement new technologies, improve processes, and drive innovation. This can hinder long-term competitiveness and growth prospects.
Compliance Risks: The accounting profession is subject to complex regulations and standards. According to Business Insider, the shortage of qualified accountant professionals can increase the risk of non-compliance, leading to fines, reputational damage, and legal consequences.
Accounting Hiring Trends and Challenges: Unreliability of Resumes
Resumes are the currency of recruiting, as they are required by HR teams, recruiters, and hiring managers. At least initially, resumes can be the sole factor in whether an applicant advances in the recruiting process.
For several years, many authors have been predicting the downfall of the resume. Resumes only provide a job history and may not accurately reflect a candidate’s personality or potential.
Negative information is often left out, even if the candidate made mistakes in the past. This can lead to early recruiting decisions being made based on inadequate information.
In a competitive job market, job seekers may exaggerate their resumes to make themselves stand out. According to Forbes, a staggering 70% of job seekers do this, with the most common lies involving job titles and responsibilities.
This is especially concerning for accounting positions, which rely heavily on the accurate use of Microsoft Office programs, especially Microsoft Excel.
Candidate Screening: How To Battle Misleading Resumes
Yves Lermusi, the CEO of Checkster, claims that candidates may think exaggerating their skills is a simple way of getting away with it during the interview process, as it’s difficult to check unless there are skills tests involved.
Candidates may also believe that prospective employers will not verify employment experience with their previous employer.
Many hiring managers, on the other hand, appear to be forgiving of candidates who falsify information. Only one-third of hiring managers would never hire a candidate who lied on their resume, leaving 66% of hiring managers eager to hire someone despite exaggerated claims.
Fortunately, your HR team will be able to tell the difference between honest and dishonest candidates based on reference checks, background checks, skills tests, and other methods.
Accounting Hiring Trends: The Era of Pre-Employment Skills Tests
Although resumes are commonly used to describe a candidate’s skills, they may not be the best indicator of a candidate’s actual abilities. This is because resumes often fail to distinguish between knowing how to perform a task and actually performing it effectively with mastery, which are two different things.
The latest accounting hiring trends show that over time, more companies started getting on board with the idea that resumes were not sufficient to properly select the best possible candidate and started incorporating different types of applicant screening.
Screening would take place prior to the interview itself to make sure that only skilled candidates had the opportunity to land a job. For accounting roles, accounting skills assessment tests are essential, as accountants cannot provide a work sample like a copywriter, digital marketer, or graphic designer can. Comprehensive skills tests are the best way to understand the skill levels of accounting applicants.
Accounting Skills Tests for Better Applicant Screening
As a hiring manager, you can improve the hiring process and save time by using accounting skills tests. These tests can help you identify top talent quickly and eliminate any unconscious bias that may exist. By analyzing the actual skills and workplace behavioral traits of applicants, you can make data-driven decisions rather than relying on personal impressions.
Implementing pre-employment assessment tests at the beginning of the hiring process saves time for both yourself and the applicants. These tests provide standardized feedback so that decisions about who to hire can be made without the need for lengthy interviews or other time-consuming processes.
Pre-employment accounting tests, including pre-employment math tests, and screening procedures make you less dependent on resumes when it comes to finding the top talent accounting candidates.
For in-depth information on which tests to use depending on the position you’re hiring for, see “Accounting Assessments: Which Tests to Use for Each Job Role.”
Wrapping it Up
Accounting and finance teams play a critical role in every company, which is why team members need quantifiable knowledge to perform well. And even though resumes (and interviews) have long been the currency of recruitment, relying solely on them is no longer an option.
Resumes tend to overemphasize applicants’ positive past experiences while omitting all negative information. When it comes to accountant applicant screening and hiring, businesses should use pre-employment skills tests to guarantee a full understanding of the applicants’ skills.
If you’re looking to learn more about this topic of accounting hiring trends, check out our article “Accounting Skills Gap No Longer Unlikely” and see how our testing tools can transform your hiring process – learn more today!