Xpitax News Articles
A Ten-Year Vision of Our Profession – what will staffing be like then?
The year is 2014 and the Telecommuting and Flexible Work Schedule Act has been passed .It is now illegal to force employees to physically work more than 20 hours a week in the office. Workers are using wrist PC’s from remote locations to recreate and work simultaneously. A new niche in mental health care has emerged to take care of elderly CPA’s, anyone over 45, who actually spent the first twenty years of their life working. The latest generation of new workers, the X
t generation, is extremely selective about what they do and how they spend their day. The available supply of people willing to work has dropped to 50% of the population. The retirement of 40 million baby boomers has created such a huge demand for employees that firms are firing clients and only servicing the ones staff will work on.
Okay, this obviously is not going to happen until closer to 2017, but the point is things change. Change is inevitable. You can ignore change and fall behind the times, fight it and possibly get run over by it, or carefully embrace it and evolve your practice to benefit from it. CPA’s who used green ledger sheets, pegboard systems, and other manual processes who did not adapt to using computers just became obsolete.
Here’s a few things people never saw coming or laughed at when predicted. Who would have thought that Arthur Anderson, a pillar in the CPA firm profession, would be gone? Who would need a personal computer? After that, people laughed when someone predicted that one-day computers would be in everyone’s home. Japanese cars would have the highest quality ratings. Florida would have a hockey team. The Cubs or Red Sox would win the World Series. The last one did not happen, but a permanent staffing change in the CPA profession is occurring.
CPA firms are used to a traditional staffing model. Many partners who spent their time working 70-hour weeks believe for younger staff to become successful, they need to put in the same time to pay their dues. The problem is accounting students don’t seem to share the same view. They believe work and leisure time should be equal or disproportionately skewed toward the leisure time. In the past, it was easy to ignore such initiatives because these workers were in the minority and there was a steady supply of qualified CPA’s to hire. Today, the majority of the younger workforce is placing lifestyle or the type of work as a higher priority.
Some basic facts about staffing in the CPA profession:
- Enrollment. Between 1993 and 2003, the number of accounting graduates dropped 23%.
- Commitment. Accounting students have to evaluate the costs of a 5-year program versus a 4-year business degree.
- Economy. The economy has been in a recession and many firms still cannot find qualified employees. How will they get workers when the economy rebounds?
- Rising Costs. According to the Summer 2004 survey by the National Association of Colleges and Employers the average starting salary for an accounting major is $41,110. Add in another 30% for benefits and expenses and it makes each new hire cost closer to $55,000.
The biggest staffing factor is regulatory changes. For example, increased scrutiny of the public sector with Sarbanes-Oxley and rulings such as SAS 99, have created demands for employees to provide independence services, consulting, internal audit, and more exciting service delivery than traditional tax or accounting. So, not only does the profession have less people entering it, there is a wider array of areas for people to go into. These factors, plus the aging CPA population is creating a shortage in the desire of younger professionals to perform the “less exciting” segments of accounting and return preparation. If faced with the choice of consulting on internal controls, advising on tax or audit issues, or preparing tax returns, most professionals will opt for the more glamorous, challenging work.
Outsourcing is one of the methods to combat the change in staffing. The three immediate benefits of outsourcing for any CPA firm are:
- Time. It enables CPAs to get preparation work done with minimal professional staff intervention. A firm can have records scanned by administrative personnel, sent for preparation to the outsourced agent, and returned the next day for internal review.
- Money. It is cost effective. The cost of return and accounting services for internal professional staff is much higher than the expense of using an outsourced agent.
- Speed. The average turn around time is less than one-day. Your scanned documents are generally done overnight and ready the next morning.
The biggest benefit of outsourcing is the potential for growth. Business development strategies can be altered to attract additional tax work. Firms can divert their professional staff to focus on advisory, independence and other client valued services as opposed to spending valuable and costly time on compliance preparation. Firms can buy additional tax heavy practices, mine clients for investment services or financial planning, and get staff working on the they type of work they find challenging. This will make your more attractive to work for, enable you to retain and hire younger and more seasoned staff, and in the end increase the value of the practice since in-house permanent staffing levels will be “balanced” throughout the year.