Where Did All the Accountants Go?
For accountants, April heralds the end of a grueling marathon—tax season. The intense workload and inflexible timeline mean accountants work overtime, logging 50 to 70 hours a week. And now, tax season often extends into May, as firms backfill to deal with an accounting labor crunch.
It’s created a perfect storm for entities like Burnsville-based Enestvedt & Christensen. In June, the firm sent out a “state of the union” letter to its clients, asking for timeliness and cooperation in the approaching tax season because of increased tax complexity and lack of staff.
“In the past, it was easier to get qualified seasonal help to keep up with the demand. Many of our seasonal tax preparers and reviewers have retired, and we have not been able to replace them. To address this issue, our goal is to shift the tax season deadline so that the work is more manageable for our staff and today’s workforce demands,” the firm stated. The letter also asked clients to send in information earlier, even if they lacked their full complement of tax documents, and to schedule their tax preparation earlier and use online forms to report it, rather than in a personal meeting.
The industry’s staffing constraints are some of the worst in the nation. Over the last decade, the number of practicing accountants and auditors has declined by about 10%, with roughly 190,000 workers leaving the field, according to the Bureau of Labor Statistics.
For Enestvedt & Christensen, a smaller local firm, hiring more staff is not enough, says Erik Doerr, a partner at the firm. The firm also had to increase its rates from 25 to 30% in the last four years as labor and technology costs have risen.
“We communicated very directly with clients, telling them, ‘Hey, here’s where we’re at, we have this much work to do during this period, [and] it’s not going to work. It’s not a sustainable model; we need your help,” Doerr says.
Over the last decade, the number of practicing accountants and auditors has declined by about 10%, with roughly 190,000 workers leaving the field, according to the Bureau of Labor Statistics.
Michael Iselin, an associate professor in the accounting department at the University of Minnesota’s Carlson School of Management, says there’s been a noticeable decline in the past five years in accounting—so much that the school has had to reduce the number of course offerings. “When talking to professors and faculty at other universities, they’re seeing the same trends in their accounting majors and entrance courses into the accounting profession,” Iselin says.
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Iselin theorizes that the rigorous requirements of the profession have put off prospective students, who must study an additional 30 credit hours over standard graduation requirements if they intend to take the CPA exam. “A lot of times that means sticking around for an extra semester or year,” he explains.
He also believes starting salaries for accountants have played a role. When Iselin graduated in 2005, he began his accounting career earning $52,000. Adjusted for inflation that’s over $84,000. Today’s median starting salary is around $60,000. “From what I hear, students get a job at the Big Four [accounting firms], and they only stick around for a year or two and then kind of use it as a launching pad into another [career],” he says.
To attract more students to the major, the Carlson School is increasing the number of electives and lowering the number of required courses to give students more flexibility in the curriculum, says Iselin.
Outside academia, other industry organizations are addressing the worker pipeline. The Minnesota Society of Certified Public Accountants has set out to broaden pathways to CPA licensure in the 2024 legislative session by introducing a requirement of 120 credits and two years’ work experience, a more accessible alternative to the current 150 hours and one year’s work experience requirement.
Doerr believes the industry is facing a crisis that’s been a long time coming. “I think students coming in say, ‘I don’t want to work 70 hours a week, I don’t want to have any part of this extra year in college, I don’t want the student loans; why would I go into this career?’ If you want to get people into this industry to backfill the generation that’s leaving, [we] are going to have to make some changes.”
