Recruiting the correct talent is a challenging job for businesses across the world and CPA firms in the USA are no exception. With the increasing demand and need for skilled professionals increasing, CPA firms in the USA face complexities in retaining as well as recruiting top-level talent. In this blog post, we will understand these issues with some of the data-driven insights and will demonstrate how outsourcing can be one of the best solutions, particularly for CPA firms.
Common Hiring Challenges CPA Firms Face in the USA
1. Shortage of Talent
The talent shortage and lack of skilled professionals are some of the biggest challenges faced by accounting organizations. There was a significant drop of 4% in the number of accounting graduates between 2019 and 2023, as per the report by the American Institute of CPAs (AICPA This drop has given rise to a highly competitive phase for CPA firms vying for the same pool of qualified candidates.
Data Insight: The AICPA states that the requirement for auditors and accountants will rise by 6% from 2020 to 2030, further increasing the talent gap.
2. Increase in Turnover Rates
Employee turnover has always been a challenge in the accounting industry. The 2023 Accounting & Finance Workplace Survey by Robert Half states that 62% of accounting talents plan to look for a different workspace within the next year. An increase in the turnover rates can affect the operations of the firm hugely, can surely increase the training costs, and hence, can sharply affect client satisfaction.
Data Insight: The turnover rate in the accounting firm is approximately 15%. It is more than the national average of 10% for other businesses and professions.
3. Competitive Credits and Salaries
CPA firms have to offer credits and benefits to recruit and retain top-skilled professionals. However, startups and SMEs find it difficult to cope with the big organizations that have bigger pockets.
According to the U.S. Bureau of Labor Statistics, the median annual credit for auditors and accountants varies between $72,000 to $73,560 in 2022. However, larger organizations give more compensation and credits to them, making it challenging for small businesses to compete.
Data Insight: Big accounting organizations provide lots of credits and 15.20% higher salaries to new graduates than the industry value, making it a competitive disbalance for smaller firms.
4. Geographic Limitations
Some of the CPA firms are in rural areas or areas with less population. This brings up another hiring challenge for them. For these firms, finding the correct talent is a complex task as professionals often choose to work in urban areas, where they can explore more opportunities for development, better lifestyle, and career growth.
The 2023 Randstad USA Salary Guide states that some metropolitan places like Los Angeles, Chicago, and New York give 10-15% more salaries as compared to rural areas. This gives rise to another challenge for the less populated areas.
Data Insight: More than 60% of accounting professionals want to work in metropolitan cities rather than limiting their skills to organizations in rural areas.
5. Dynamic Skilled Professional
Accounting firms are ever-evolving with the latest technologies, methodologies, and new regulations that are updated regularly. In such a scenario, organizations, need skilled professionals who can cope with this dynamic environment and can adapt to the changes quickly.
This should include excellence in the updated accounting tools and software and knowing the challenging tax laws. According to statistics by the Institute of Management Accountants (IMA), 75% of accounting talents have a strong perspective to continuously learn and develop their skills for their career growth.
Data Insight: 68% of accounting organizations find it difficult to find the correct talent with the optimum technical skills, as per a survey in 2023 by the Institute of Management Accountants (IMA).
How Outsourcing Provides Solutions?
Outsourcing your accounting and bookkeeping requirements can help solve many of these challenges. It can help you find better talents that are cost-effective and flexible as per your requirements.
1. Access to a Global Talent Pool
Outsourcing helps CPAs to search for the required talent globally. It helps them to get access to highly skilled talent who may not be available locally. As per Deloitte’s 2023 Global Outsourcing Survey, 59% of businesses outsource to get professionals who are not available in-house.
Data Insight: The global outsourcing market was calculated to be $92.5 billion in 2022 and is expected to rise at a CAGR of 8% from 2023 to 2030. This showcases the rise of dependency on outsourcing for talent acquisition.
2. Cost Savings
Outsourcing is also a solution for cost cuttings. It helps significantly to reduce resources related to training and recruitment. CPA firms can greatly reduce labor costs in other countries while ensuring high-quality and precise results. According to a statistic by Outsource Accelerator, businesses can save up to 70% just by outsourcing to countries like India.
Data Insight: CPA firms and companies can grow and have a cost saving of up to 30-40% by outsourcing, as per the reports by the National Outsourcing Association.
3. Flexibility and Scalability
Outsourcing helps CPA firms with the flexibility to go for operational-based hiring, based on the unique requirements of the client and the need of the specific task. This helps them manage and plan tasks according to the workloads efficiently and reduces the need for permanent staff. It helps them get expertise for their specific work along with flexibility. The Everest Group states that 54% of the firms leverage outsourcing to grow their business with flexibility.
Data Insight: 71% of firms have increased their productivity to manage workloads, as per a survey of 2023 by Deloitte.
4. Reduced Turnover
Outsourcing firms are teams of professionals that are dedicated to long-term partnerships. This helps in reducing the turnover cost and helps firms with reliable and consistent support. Statistics by Clutch found that 27% of firms have experienced lower turnover rates due to outsourcing.
Data Insight: Firms that outsource have stated a reduction of 25% in turnover costs, according to a survey by the International Association of Outsourcing Professionals (IAOP).
5. Focus on Core Competencies
By outsourcing non-core operations, CPA organizations can work on their actual competencies, like client relationship management, strategic planning, and advisory services. This helps them to enhance the efficiency of the organization in a better way and deliver accurate results as per the client’s requirements. As per PwC, 43% of firms outsource to work on their actual goals.
Data Insight: Organisations that work on core workflow by outsourcing non-core operations report a 21% growth in productivity.
6. Enhanced Technology and Compliance
Outsourcing firms often make an effort to grow and understand the technology. This helps in ensuring compliance with industry rules. While outsourcing, CPA organizations get more accurate and precise results and also reduce training costs. The 2023 Deloitte Global Outsourcing Survey revealed that approximately 48% of firms, outsource to get accurate results from innovative technologies.
Data Insight: 53% of businesses think that outsourcing helps them get access to the latest tools and technology, as per the Deloitte survey.
Real-Life Issues Faced by CPAs and How Outsourcing Solves Them
Issue 1: Seasonal Workload Complications
CPAs often deal with excessive work pressure due to fluctuations and the stress of tax season. This can lead to work pressure and job dissatisfaction. Outsourcing can help them cope with these complexities by delivering support during your stressful times. This ensures that workloads remain sorted and deadlines are completed without overburdening the employees.
Data Insight: Companies that outsource during the stressful tax seasons report a 35% reduction in employee work pressure, as per the survey by Accounting Today.
Issue 2: Complex Client Needs
Clients may have different demands and may require specialized services. Coping with these demands may need training which can sometimes be time-consuming as well as costly. Outsourcing helps organizations get expert guidance without investing too much in in-house training.
Data Insight: 64% of CPA organizations say that outsourcing has helped them to meet complicated clients with efficiency, as per the 2023 report by the AICPA.
Issue 3: Technology Integration
The rapid growth of technological integration can be complex for organizations to stay updated. Outsourcing firms often leverage to advanced technologies and can use the latest software and tools in the firm’s operations. This helps the firms to remain efficient and competent.
Data Insight: 57% of organizations state improved technology integration as an outcome of outsourcing, as per the survey by Clutch.
Conclusion
Hiring concerns are one of the most crucial challenges for CPA firms in the USA. Outsourcing can help you to find the best solution. With the help of globally skilled professionals, reduced costs, and a flexible approach, CPA firms can move toward sustainable growth.
If you are a CPA firm and facing such challenges, you can surely move to outsourcing as one of the best and most strategic solutions. It will not only help you to manage and reduce the workload but will also help you with skilled experts who can help you achieve your business goals.
So, if you are ready to resolve your hiring concerns and take your firm to new heights, contact us today. We can help you with explicit outsourcing solutions to make your business soar to the horizon.
