Hiring & Retaining Staff for CPA Firms: Navigating Turnover Challenges

Hiring and retaining staff is a constant concern for CPA firms. In fact, according to remote.com “Employee turnover rates have experienced an average increase of 8.7% since 2019, and projections suggest further escalations in 2023, with anticipated turnover rates of 35.6% in the UK and 46.8% in the US.”

Based on this data it is becoming increasingly difficult for employers to keep talented professionals on board. Newly available statistics from the U.S. Bureau of Labor Statistics confirms the significant increase in job resignations, with an impending turnover "tsunami" predicted to impact American businesses.

This blog explores the factors contributing to this phenomenon, its potential implications for the accounting profession, and provides strategies for effectively hiring and retaining staff in CPA firms.

Current Landscape of Hiring and Retaining Staff

As per the survey on Job Openings and Labor Turnover conducted by the U.S. Bureau of Labor Statistics in 2022, approximately 50.5 million individuals decided to leave their jobs, surpassing the previous year's figure of 47.8 million. The Society for Human Resource Management warns of an impending turnover crisis, with more than half of North American employees actively considering job changes this year. While the specific impact on the accounting profession is yet to be determined, anecdotal evidence suggests that turnover rates remain high, particularly in white-collar professions.

Factors Contributing to High Turnover Rates

1. The Resignation Backlog: Many employees delayed leaving their jobs during the pandemic, leading to a backlog of pent-up desire for change. With the easing of restrictions and improved economic conditions, individuals feel more secure in seeking new opportunities.

2. Burnout: The prolonged and heightened stress experienced during the pandemic has taken a toll on employees across various industries, including accountants. Burnout, resulting from increased workloads, longer hours, and blurred boundaries between work and personal life, has contributed to the decision to leave current positions.

3. Epiphanies: The pandemic has prompted individuals to reevaluate their lives, career paths, and personal goals. Many have had epiphanies, realizing that their current jobs no longer align with their aspirations or values, leading them to actively explore alternative options.

4. Remote Work: The shift to remote work arrangements has provided employees with the opportunity to reassess their work-life balance and explore job opportunities outside their geographic constraints. The flexibility and convenience provided by remote work have made job transitions more feasible for many professionals.

Implications for CPA Firms

CPA firms are not immune to the challenges of hiring and retaining staff. The increasing turnover rates pose significant risks, including loss of talent, decreased productivity, and negative impacts on client relationships. Firms must address these challenges proactively to ensure sustainable growth and success.

It’s important to note that employee turnover is not solely driven by dissatisfaction. While sectors like leisure and hospitality witness employees leaving for higher wages, other industries, such as accounting, have different motivations for departure. In accounting roles, the reasons to look for a new employer is not linked to pricing or compensation but revolves around employee satisfaction, viability, and interest. Though it may seem daunting, accounting firms can also look at implementing these 6 tips to attract and retain talent to address retention concerns.

Strategies for CPA firms to retain staff in the competitive labor market:

1. Embrace flexibility: As the pandemic has altered work patterns and habits, remaining flexible as offices reopen is highly valued by employees. Finding a successful blend of collaborative and flexible work environments is essential for firms, considering the workplace is forever changed.

2. Offer balance: Burnout is a contributing factor to elevated turnover rates, as indicated by the Society for Human Resource Management (SHRM). CPAs, who prioritize helping others, may seek jobs that provide better work-life balance. Initiating policies like unlimited paid time off (PTO) can be positive for retention. According to Kimberly Shells, an analyst from Gartner, approximately 65% of individuals surveyed, expressed that they are currently reconsidering the significance of work in their lives. Shells mentioned that their families, hobbies, and communities now hold relatively greater importance compared to the past. Shells also stated that Gartner predicts a 20% turnover rate in the foreseeable future.

3. Ensure future opportunities: While flexibility is essential, employees still desire growth
and career progression opportunities. Firms should blend flexibility and growth prospects to cater to employee needs. The accounting industry's technological advancements necessitate equipping the workforce with the latest tools and training.

4. Reflect core values: Investments in diversity and inclusion can differentiate firms in attracting and retaining talent. Cultivating a workplace culture where employees find value and meaning in their work is crucial for retention. Strong leadership plays a vital role in establishing such a culture.

5. Treat exiting employees well: Firms should consider improving the exit process for employees who resign. Some firms offer departing employees a leave of absence, allowing them to return within a specific timeframe if they choose to do so. Recognizing departing employees' contributions through celebrations can enhance an organization's reputation.

Utilizing Offshore Staffing to Reduce Employee Turnover

Turnovers present opportunities alongside the challenges. While losing personnel may be a downside, it also opens up the possibility to explore strategies such as offshore staffing. 

By implementing effective strategies and considering the needs and motivations of employees, CPA firms can enhance staff retention, mitigate turnover, and build a strong workforce.

In the face of high turnover rates in the US labor market, CPA firms can explore the potential of leveraging the expertise of an accounting offshore staffing provider as a strategic solution. Offshore accounting experts offer access to a pool of skilled accounting professionals from countries like India, and other regions with a strong accounting talent base. By partnering with an accounting offshoring provider, CPA firms can address the challenges of turnover and achieve long-term stability in their workforce.

Tap into a diverse talent pool

One of the key advantages of working with an offshore staffing provider is the ability to tap into a diverse talent pool. Accounting offshoring providers carefully screen and select candidates with relevant accounting qualifications, experience, and expertise. CPA firms can benefit from this extensive talent pool by securing highly skilled professionals who can contribute to their operations and minimize the impact of turnover.

Specialized Expertise

Offshore staffing providers often have specialized expertise in accounting practices and regulations across different jurisdictions, enabling them to provide CPA firms with access to professionals who possess knowledge in specific areas such as tax, auditing, or financial reporting.

Cost Savings

Another significant advantage of partnering with an accounting offshoring staffing provider is the potential for cost savings. Offshore staffing allows CPA firms to access qualified professionals at a fraction of the cost of hiring locally. This cost-effectiveness can be advantageous for small to mid-sized CPA firms that may have budget constraints. By reducing recruitment and training expenses, as well as overhead costs related to maintaining an in-house team, firms can allocate resources more strategically and invest in other areas such as technology, employee development, or client services.

Engaging work for your onshore team

Furthermore, partnering with an offshore staffing provider can improve staff retention rates. Local employees can focus on higher-value activities that align with their expertise and professional goals by offloading routine and repetitive tasks to offshore professionals. This can result in increased job satisfaction, reduced burnout, and enhanced employee engagement, which are crucial factors in mitigating turnover.

Offshore teams can help beat the tax rush

Additionally, the availability of a skilled offshore team can provide support during peak seasons or heavy workloads, preventing local team members from feeling overwhelmed and potentially seeking opportunities elsewhere. Many CPA firms hire offshore accounting experts to help with the tax season rush but they also need to consider when is the best time to start building their offshore team.

It is important for CPA firms to approach offshore staffing partnerships strategically. Clear communication channels, defined processes, and strong project management are vital to ensure effective collaboration between onshore and offshore teams. Taking proactive measures such as implementing a buddy system can be the perfect way to integrate offshore staff with your onshore team.

Firms should also invest in building a strong organizational culture that promotes collaboration, teamwork, and inclusivity across all locations. Knowing the essential skills for building a perfect offshore accounting team can make the difference between a basic offshore team and a high performing one.

In conclusion, partnering with an accounting offshore staffing provider presents a valuable opportunity for CPA firms to minimize the challenges of high turnover rates in the US labor market. By leveraging the expertise and cost advantages offered by offshore professionals, firms can secure a skilled workforce, reduce recruitment costs, and foster a positive work environment that supports staff retention. When implemented strategically, offshore staffing can be a powerful solution for CPA firms seeking long-term stability and growth in a competitive industry.

Entigrity™ is a trusted offshore staffing partner to 725+ accountants, CPAs, and tax firms across the US and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to hire staff for accounting, bookkeeping, tax preparation, or any other task for 75% less cost. As a firm 'run by accountants, for the accountants,' Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management; still, you are left with the least to worry about compliance, payroll taxes, overheads or any other benefits. Let's have a quick call to explore a tailored solution that fits your requirements.

Jacob Scott, CPA

Member, Advisory Board

Jacob Scott is a CPA with over 20 years of experience in the area of accounting & finance and has worked as a Senior Audit Associate at EY. Jacob drives the financial planning of the company by analyzing its performance and risks. He retains constant awareness of the company’s financial position and acts to prevent problems. He also sets up and oversees the company’s finance IT system as well as sets targets for and supervise all accounting and finance personnel (management accountants, internal auditors, etc.) Besides overseeing all audit and internal control operations, Jacob develops the corporate fundraising strategy and manage relationships with partners and investors. His roles also include preparing timely and detailed reports on financial performance on a quarterly and annual basis and conducting analysis to make forecasts and report to upper executives. He ensures adherence to financial laws and guidelines.  He has a keen interest in activities and societies, industry tours, educational seminars, cultural activities, sports, and most importantly attending conferences.