the Future of the Accounting Profession
Recruiting and Retaining the Next Generation
Robert Bloom and Mark Myring
JUNE 2008 - Over
the past decade, the demand for qualified accounting professionals
has increased, while the supply has decreased. The current situation
is partially the result of a decline in college accounting enrollments
during the late 1990s, combined with new legislative requirements,
such as the Sarbanes-Oxley Act (see money.cnn.com/2006/02/03/pf/pay_hike_jobseeker/index.htm).
A recent survey conducted by Robert Half Finance and Accounting
reflects the high demand for accounting personnel: Of the 1,400
CFOs surveyed, 9% planned to add staff in the second quarter of
2008, while only 5% planned to reduce staff, and this trend is expected
how these changes will continue to impact the profession is critical.
In 2007, Robert Half issued a report on behalf of the Financial
Leadership Council it formed to study employment trends in accounting
and finance. The council consisted of 24 members, including 16
CFOs, controllers in industry, and partners in accounting firms;
three current and one former full-time accounting or finance association
CEOs; and four academics, along with a FASB board member serving
as an observer. The council members made a variety of recommendations
after examining human resource issues (a copy of the report can
be requested at www.roberthalffinance.com).
The findings are organized into four sections: recruitment and
tomorrow’s workforce, the business–academic partnership,
and global business. Below is an analysis of these findings, as
well as a critique of the recommendations.
competitive in a shrinking market of qualified accountants, it
is necessary to develop new and creative methods of attracting
and maintaining staff. Compensation packages and stable employment
alone are no longer sufficient incentives. To attract more suitable
individuals to the profession, firms must understand the work-related
preferences of the talented individuals considering accounting
as a career, and offer positions that accommodate those desires.
In addition, the profession must pay continuing attention to the
interests of individuals vis-à-vis the needs of employers.
issue the council considered was how to attract talented members
of Generation Y (defined as people born between 1978 and 1990)
to the profession. According to the report, Generation Yers often
expect challenging projects and participation in the decision-making
process early in their career. Companies are finding that they
must offer these individuals “a more individualized approach
to employment.” Structuring employment in such a manner
is difficult because job responsibilities have been affected by
increasing regulation (e.g., Sarbanes-Oxley). Many recent graduates
become dissatisfied with the tedious nature of their entry-level
positions, a problem that has increased with regulation.
a sufficient supply of qualified accountants, a fundamental shift
in the structure of entry-level accounting positions may be necessary,
according to the council. Such changes will be difficult to achieve.
For example, a five-year accounting graduate needs significant
experience in practice before being able to act as a business
advisor and consultant. This experience requirement is not limited
to the accounting profession—surgeons often study until
they are 30 years old. Additionally, while new graduates desire
nontedious work assignments, auditing can be tedious by its very
nature. The gap between what students expect from the profession
and what the profession expects from an entrant may be difficult
to overcome. One way to help reduce this expectations gap is to
provide accounting students with better information about the
type of work they will be responsible for as new hires.
means of alleviating the shortage of qualified accounting professionals
in the long-term is successful “branding” of the profession.
Unlike the areas of law, medicine, and criminal justice, accounting
does not benefit from visibility in the media. The council concluded
that the depiction of accountants in the media is often negative
or stereotypical, leading to a significant misconception about
what professional accountants do. This can have a profound influence
on young people.
this perception, the council suggests a branding campaign that
emphasizes the exciting aspects of the profession and the many
career paths available. The council also recommends increasing
the visibility of positive role models in a variety of positions
to emphasize the multifaceted nature of the profession. Such branding
should depict accounting as an attractive career choice for college
made a number of recommendations that individual firms may wish
to adopt in order to attract qualified current and prospective
accountants. Among these proposals was a double internship model
in which individuals would have an opportunity to pursue two different
internships within the same firm during different time periods.
The rationale was to provide a varied work experience. The experience
of the authors of this article as college professors, however,
indicates that students prefer to undertake a single internship
and receive a job offer upon completion. In addition, smaller
firms may be unable to offer multiple internships.
can enhance their performance by adopting a common message, emphasizing
the company’s vision and values, and highlighting appropriate
role models. To achieve a diverse workforce, for example, firms
should consider using a diverse group of recruiters. The council
also recommends greater emphasis on flexibility in the working
environment as a recruiting tool. If such flexibility (e.g., flexible
hours, working from home, sabbaticals) is actually available,
then it should be brought up during employment interviews; however,
if this flexibility applies only to select employees, the issue
should not be emphasized. The authors believe that the council
did not put enough emphasis on flexibility in work arrangements
as a recruiting tool.
the council suggests using an experienced human resources professional
for recruiting, the authors’ experience as college professors
indicates that students feel more comfortable with, and can better
relate to, nonprofessional interviewers or former accounting or
finance students. It may be helpful for recruiters to bring recent
alumni to recruiting events. A council proposal to attempt to
recruit individuals who are satisfied in their current positions
is problematic because it is difficult to find such individuals,
apart from personal referrals. The council proposes that significant
bonuses be paid to any parties making such referrals. Many firms
currently pay bonuses for referrals, a trend that has gained popularity
in recent years. Several council members said they have increased
the bonuses, which has increased the number of referrals. This
method is particularly effective in recruiting quality candidates
because current employees are generally reluctant to refer poor
candidates because their own reputation is at stake. In addition,
this method of recruiting is comparatively inexpensive.
the shortage of qualified accounting professionals at the firm
level, the council also discussed the use of retention strategies,
which are designed to keep quality employees in their current
jobs. Re-recruiting top performers is an effective way to maintain
talented staff members. The goal of this strategy is to sell top
performers on their employment in the firm before they get a better
offer from a competitor. Firms should also offer increased career
visibility. Under such a strategy, an employer would provide a
clearer vision of an employee’s potential career path. A
recent study by the AICPA suggests that career growth opportunities
represent one of the key reasons talented professionals stay with
a firm (Anita Dennis, “Understanding the Best and Brightest,”
Journal of Accountancy, November 2006). Succession plans
must be developed if employees are to have successful career progress.
There must be a transfer of knowledge from management to staff.
One council member addressed the idea of planning for succession
and knowledge transfer. At his company, McDonald’s, executives
are accountable for identifying successors, which is imperative
to ease the transition in management turnover at dynamically changing
enterprises. Succession planning is often downplayed or given
short shrift in organizations because it can be demoralizing for
executives who are not secure about their own positions within
the company. [A survey by Robert Half Management Resources (www.roberthalfmr.com)
of 1,400 CFOs, released July 11, 2007, found that only 16% had
identified successors, regardless of whether the CFO intended
programs may also be an effective means of retaining staff. Many
companies, including accounting firms, use mentoring rings, which
involve a group of employees from different areas (e.g., tax and
audit). Mentors can also be used to reemphasize the importance
of the CPA exam, an accomplishment that is critical to long-term
retention. A council member from Plante & Moran indicated
that her firm uses two levels of mentoring: New hires are assigned
to experienced staff, and partners supervise all staff members,
who are assigned to teams. Partners and experienced staff are
evaluated, in part, on their mentoring efforts.
and adjustments in compensation can also help retain current employees.
The council recommends ranking employees into quadrants and grids,
and tying incentives to such ranking systems. Microsoft, for example,
uses a ranking system (10% in the top group, 70% in the middle
group, 20% in the third group) for different layers of compensation,
including such incentives as restricted stock options and bonuses.
This system could, however, demoralize average performers and
lead to excessive competition at the top. If a firm has few top
performers, this strategy could produce morale problems, engendering
higher turnover and productivity shortfalls.
work arrangements, allowing employees to work part-time or from
home, can also improve retention. The council believes there is
no one suitable flexible work approach; each arrangement should
be employee-driven. These arrangements, however, may be difficult
to implement, in part because firms must decide which employees
are eligible (i.e., top performers versus other employees). Again,
it seems to the authors that the council could place more emphasis
on flexible work structures as a retention strategy.
employment options for retirement-age employees may also alleviate
staffing concerns. Many accounting firms enforce mandatory retirement
policies to give lower-ranking employees greater opportunities
to move ahead. To increase the number of experienced staff, mandatory
retirement could be replaced with new work arrangements such as
project-based roles, phased retirement, or cyclical work periods.
This strategy seems particularly attractive, given the percentage
of the workforce approaching retirement age.
management style and employee responsibilities may also improve
retention. Management values and expectations may need to be modified
to better fit the culture of the workforce. Supervisors should
maintain open communications and transparency. Although beneficial,
changes in management style are often difficult to implement;
the example of the U.S. auto industry illustrates this point (Subir
Chowdhury, “Changing Management Styles Put Their Mark on
Industry,” Quality Progress, May 2000).
shortage of qualified accounting professionals can also be alleviated
if the profession continues to focus on the new skills necessary
to succeed in today’s working environment. The council recommends
an emphasis on interpersonal and critical-thinking skills. Although
such skills are difficult to teach, they can be promoted or encouraged
throughout a curriculum.
written communication skills are critical in accounting. While
communication skills have long been incorporated into training
regimens at international accounting firms, the council reemphasized
the importance of these skills. The council suggests multiple
methods to help young professionals enhance their communication
skills, including organizing their thoughts before they speak
or write. The communication method should also fit the circumstances;
for example, instant messaging may not be an appropriate medium
to communicate a sensitive message.
skills are also important for professional development. When making
decisions, successful accountants must be able to analyze alternative
options and evaluate the benefits and costs of each. Universities
have spent much time modifying their curricula in recent years
to place more emphasis on these skills. This means less attention
is given to factual learning, and more attention is given to discovery
learning through experimentation and applications. Instead of
right or wrong answers, the focus is on finding approaches to
problems and decisions that do not lend themselves to simple solutions.
The council stressed the importance of cross-functional teams
in the workplace in developing critical-thinking skills on the
a member of the council and head of the department of accountancy
at the University of Illinois at Urbana-Champaign, argues that
critical-thinking skills can be nurtured by applying progressive
teaching practices. These practices include encouraging preemptive
self-criticism of judgments and decisions; focusing on the development
of both left- and right-brain skills; stipulating one’s
hypothesis fully; and asking for multiple solutions. Training
designed with this framework can enhance employees’ critical-thinking
partnership between the business and academic communities might
also help reduce the current shortage of qualified staff. Specifically,
the council calls for more meaningful involvement from corporate
executives on university advisory boards. Such interaction may
result in accounting and business curricula that better prepare
students for the realities of practice. The academic members of
the council emphasize that students would benefit from greater
access to real-life case studies and projects. The academics also
point out that students would benefit from access to the firms’
data for their own research. The council also called for more
internships for accounting students and more funding from firms
for innovations in accounting and finance education.
One key outcome
of globalization is the harmonization of international and U.S.-based
accounting standards. It is likely that the United States will
continue to actively converge FASB’s GAAP to the IASB’s
International Financial Reporting Standards (IFRS). SEC Chairman
Christopher Cox has stated that the SEC will most likely allow
foreign private issuers to choose between U.S. GAAP and IFRS.
In addition, an August 27, 2007, concept release (available at
suggests that U.S. companies may someday be allowed to file financial
statements under IFRS.
to recruit talented accountants overseas is a potential benefit
to increased globalization. The council reported that most U.S.-based
accounting firms are not recruiting internationally, and recommended
that they explore the international talent pool (both in Canada
and across the globe) for potential employees. To attract international
talent, recruiters must familiarize themselves with international
talent markets and offer competitive salaries. In addition, an
infrastructure that supports international collaboration must
be in place. While a company’s operations may be geographically
disparate, personnel should possess a common knowledge base, culture,
and ethical values, while respecting local customs and traditions.
Accordingly, accounting and financial professionals must become
more culturally sensitive to such differences in behavior and
the Financial Leadership Council’s report provides a set
of provocative recommendations on: enhancing recruitment strategies
in accounting and finance; collaborating between business and
academia; improving the scope and quality of accounting education;
using branding to improve the image of accounting and finance
to students; and dealing with the challenges and opportunities
of globalization. In the authors’ opinion, the recommendations
of the council are sound and can help the profession overcome
the many hurdles it currently faces.
A few additional
points raised by the council’s report warrant discussion.
Expanded examples of successful retention strategies would be
useful. In addition, the council does not distinguish between
small and large firms. Many of the issues new recruits have with
the tedious nature of staff accounting positions may be less pronounced
at smaller firms. For example, new recruits may have closer client
contact early on or participate in more diverse tasks (e.g., doing
both audit and tax assignments). The council does not address
the issue of exhaustion after five years, which is a particularly
acute problem in larger firms because they are more likely to
require extensive travel and significant overtime for new staff.
Also, there is a compelling need for more women to be in positions
of authority in accounting and finance, but there is no explicit
mention of this matter in the report, apart from hiring minorities.
way of alleviating a staffing shortage at the firm level is to
maintain contact with former employees, who could provide a source
of business to the firm or may wish to return at a later date
in some capacity. This issue is considered in the council’s
report, but could be explored in greater detail. While the council
does recommend more challenging and diversified assignments to
retain top performers, no explicit proposal encourages such individuals
to pursue international assignments within these firms by taking
extended sabbaticals to work for the firm abroad. Such a practice
could foster greater loyalty to the firm and improve its retention
authors’ perspective as college professors, another means
of attracting better-qualified students to accounting is to make
the curriculum more challenging and exciting. This can be achieved
by emphasizing case studies, actual fieldwork, and internships,
as opposed to rote memorization of accounting standards and procedures.
Based on stories from alumni, firms could do a better job of reducing
the stress associated with accounting positions and improving
the work-life balance for their staff. Accounting positions would
be far more attractive to students, and firms would experience
lower turnover among their staff.
Bloom, PhD, is a professor and Wasmer Fellow in the department
of accountancy at the Boler School of Business at John Carroll University,
University Heights, Ohio.
Mark Myring, PhD, is the Alumni Distinguished Professor
and director of graduate studies in accounting at the Miller College
of Business at Ball State University, Muncie, Ind.