A former accountant turned cofounder and CEO, Mike Whitmire is the leader of pre-IPO fintech company FloQast.
This year, what was once a growing concern about a potential talent shortage in the financial and accounting industry has become an undeniable reality. The numbers don’t lie, and neither does the urgency of the situation. Like any critical issue, this problem won’t resolve itself by ignoring it and hoping for the best. Accounting firms and organizations dependent on skilled financial professionals need to act now, devising proactive strategies to navigate this challenge and prepare for the road ahead.
The Scope Of The Crisis
In 2024, a staggering 83% of financial leaders reported experiencing a talent shortage, a sharp increase from 70% in 2022. Unfortunately, this shortage shows no signs of abating. Over the past three years, more than 300,000 accountants and auditors have exited the profession. Historically, attrition in the field could largely be attributed to predictable factors such as retirement. However, today’s exodus is fueled by a different set of challenges—and they’re far more troubling.
Many accountants are leaving the field altogether for positions in other industries. In fact, the U.S. has 340,000 fewer accountants than it did a few years ago. Making matters worse, the talent pool is shrinking, with the number of candidates sitting for the CPA exam hitting its lowest point since 2006. The once-reliable “circle of life” in which outgoing professionals were replaced with fresh, qualified talent has been disrupted.
In a desperate bid to fill these widening gaps, many organizations are hiring less qualified or even unqualified candidates without accounting degrees and investing heavily in training. Indeed, in a surprising twist, 31% of new hires at public accounting firms are now non-accounting graduates. Yet, as I’ve heard from so many in the industry, these new hires often leave for other opportunities before they’ve contributed meaningfully, exacerbating the problem. The financial and human costs of this cycle are unsustainable, and a long-term solution is urgently needed.
Technology As A Potential Solution
While the outlook may seem bleak, there is reason to hope—and the key lies in technology. Advances in generative artificial intelligence (GenAI) offer promising avenues to mitigate the impact of talent shortages. By integrating AI tools into their workflows, accounting firms can address some of the core issues driving dissatisfaction and inefficiency. This is how AI can bridge the gap.
Automation Of Routine Tasks
One of AI’s most valuable contributions lies in its ability to streamline repetitive and time-consuming tasks, such as data entry, reconciliation and integration. By automating these processes, accountants are freed to focus on strategic initiatives that require human insight and creativity. This shift can foster greater job satisfaction and fulfillment, addressing what is likely a key factor behind the talent exodus.
Imagine an accountant who wastes an hour or two each day having to pause their work to fix an error. While it’s a hassle, accuracy in financial reporting is nonnegotiable.
Generative AI can analyze massive datasets, spotting patterns and anomalies that humans might miss. For example, a misplaced decimal point or a typo in a financial entry might seem minor, but it could take hours or even days to uncover and correct. In accounting, perfection is the goal. This isn’t baseball, where a .300 lifetime batting average will get you into the Hall of Fame. Tools that proactively flag errors can save businesses significant time and resources.
Here’s the bigger picture: Generative AI doesn’t just help catch mistakes—it can empower finance teams to generate reports faster and more accurately. In a competitive market, having accurate financial data sooner can be the difference between thriving and barely surviving.
Enhanced Accuracy And Efficiency
AI tools are also making significant strides in areas like flux analysis, anomaly detection and financial statement preparation. These advancements can help improve accuracy and efficiency, reducing the need for extensive manual reviews. In scenarios where staffing is limited, these tools can alleviate the burden, helping teams to maintain high-quality work even with fewer resources.
Personally, I know what it’s like to be the CEO of a growing tech startup with a lean finance team stretched thin by the demands of rapid growth. With the advent of AI-powered tools, suddenly there is peace of mind knowing that critical financial processes are running smoothly, even with limited staffing. In a business where every dollar and every hour counts, these AI efficiencies can become game changers for the company’s financial health and scalability.
Productivity, Supercharged
Moreover, AI empowers existing talent by enhancing their productivity and reducing burnout. With these tools in place, accountants may be able to achieve more in less time, creating a more sustainable and rewarding work environment. This could not only help retain current employees but may also make the profession more appealing to new entrants.
Moving Forward
Of course, it should be noted that AI isn’t without flaws. Relying too heavily on AI in accounting poses several significant risks, including security and privacy concerns, ethical considerations (especially related to bias in datasets), reduced situational awareness for remaining employees, implementation challenges and even potential regulatory compliance issues.
Despite the challenges, financial organizations are not without hope. By embracing the transformative potential of AI, firms can help turn the tide on the challenges of talent shortages and build a more resilient workforce. Integrating AI tools into accounting workflows can help organizations to optimize their existing resources, reduce strain on employees and create a more sustainable and fulfilling work environment.
The road ahead may be challenging, but as I see it, the path is clear: Through strategic investments in technology, the accounting profession can evolve to meet the demands of a changing world. With the right tools and a proactive mindset, organizations can not only survive but thrive—no matter what the future holds.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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