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Survey Reveals Talent is a Key Concern among CPA Firms

by AICPA | Jul 09, 2015

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CPA firms once again are feeling the pressure to hire and retain high-quality professionals. That’s one of the most striking findings of the 2015 AICPA Private Companies Practice Section (PCPS) CPA Firm Top Issues Survey. Reviewing the results, it’s reasonable to conclude that factors such as steady demand for CPA services, continuing workload compression issues and, perhaps, concerns about the ongoing retirement of Baby Boom-generation partners have motivated firms to focus on their most important assets.

“Staffing has clearly reemerged as a significant challenge for firms,” says Rich Jones, WSCPA President & CEO. “Firms didn’t emphasize staff recruitment and retention during the recession, as they focused their energies on client retention. Now, with firms returning to a growth environment, we’re seeing them face new opportunities and challenges.”

Conducted every two years, the PCPS survey spotlights the main challenges facing practitioners. Responses are categorized by firm size, with top-five lists released for sole practitioners, firms with 2 to 5, 6 to 10, 11 to 20 and 21 or more professionals. Overall, the survey offers a unique overview of firms’ most pressing concerns.

Putting People First

All firms with two or more professionals identified finding quality talent as one of their top concerns and all practices with six or more CPAs also cited staff retention as a challenge. Staffing had long been a top issue in previous surveys, but that changed in 2009, the first survey conducted after the 2008 economic recession. The uncertain economy put client retention and related issues on the top of the list for every firm size for subsequent years—until now. Practice growth, a concern during the recession, did remain an issue on some firms’ radar screens, cited as a top issue by sole practitioners and firms with 11 or more professionals.

The Next Generation

At the same time, succession planning was a top-five issue for firms of all sizes this year, even among sole practitioners, who had not cited this as a chief concern in recent surveys. “With the Baby Boomers now ranging in age from 50 to 69, firms may feel greater incentive to focus on the transition to a new generation of leaders, which,  for firms with 2 or more professionals will include finding and grooming staff members with leadership potential. For sole practitioners, this will include developing a practice continuation agreement with another practitioner, ensuring that clients would have somewhere to go if something were to happen to their CPA,” says Jones.

Grappling with Time, Workload and Complexity

Another hot topic this year—and one relates to the staffing crunch—is seasonality/workload compression. While this has often been a top-five issue for smaller firms in past surveys, it made the list for firms of all sizes this year, perhaps reflecting ongoing challenges with frequent or late changes in tax laws and the late arrival of K-1s and Form 1099s. Service problems at the Internal Revenue Service have exacerbated the situation. The survey findings would seem to indicate that seasonality has grown into more than just a fact of doing business and evolved into a significant challenge for firms all year long. And whether firms need more people to deal with workload compression or fear losing them because of the stress it causes, it’s fair to assume that it fuels firms’ staffing worries. In addition, since part of the challenge of workload compression involves maintaining up-to-date knowledge of current regulations, it was not too surprising that firms with five or fewer professionals picked keeping up with changes and complexity of tax law changes as one of their top two issues, and these firms also named the effect on firms caused by state and federal regulations to their top five lists.   

Leveraging Opportunities to Try New Solutions

Given the appearance of so many familiar challenges, firms might consider embracing the opportunity to develop new solutions to recurring concerns. “It may be time to reinvent the way firms approach their most pressing issues,” concludes Rich Jones. Those solutions might include shedding difficult clients or ones who don’t quite fit the firm’s practice mix or focusing on service opportunities that can be performed during current slow periods. With so many other firms vying for top talent, working smarter with the professionals on hand may be the best answer.

The Top Five Issues Facing CPA Firms

Sole Practitioners

1. Keeping up with changes and complexity of tax laws

2. Seasonality/workload compression

3. The effect on firms caused by new federal and state regulations

4. Succession planning

5. Bringing in new clients

Firms with 2 to 5 Professionals

1. Finding qualified staff

2. Keeping up with changes and complexity of the tax laws

3. Succession planning

4. Seasonality/workload compression

5. The effect on firms caused by new federal and state regulations

Firms with 6 to 10 Professionals

1. Finding qualified staff

2. Succession planning

3. Seasonality/workload compression

4. Retaining qualified staff

5. Aging of owners/partners

Firms with 11 to 20 Professionals

1. Retaining qualified staff

2. Finding qualified staff

3. Succession planning

4. Bringing in new clients

5. Seasonality/workload compression

Firms with 21 or More Professional

1. Retaining qualified staff

2. Finding qualified staff

3. Owner/partner accountability/unity

4. Seasonality/workload compression

5. (tie) Bringing in new clients

5. (tie) Succession planning

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