A Few Solutions to the Labor Crisis.

• Author: Williams, Albert S.

This is the fourth and final article in the series on the accounting profession's labor crisis.

The declining future supply of accounting majors and graduates has frequently been identified as the most significant concern of members in the accounting profession. In response, the AICPA is stepping forward with a primarily Web-based multimillion dollar campaign to be directed at students in their last two years of high school and those in their initial college years. Academia will also be looking at ways to improve the educational process.

However, the situation will not be solved overnight. If anything, it may take a number of years to reach a satisfactory answer. In the interim, practitioners need to respond. In previous articles, I have suggested several actions that firms can take today, to combat the shortage:

* Size the practice by matching available supply to probable demand. This may take some time and reassessment. You need to determine what services you can efficiently and profitably provide. If your current demand for services exceeds your ability to provide them, adjustments may be required, in light of a diminished future labor supply potential. You can no longer take on more business, as you have in the past, simply because there just may not be an unlimited number of new staff members available, as there once was. Worse yet, your current staff, including mangers and owners, may fall prey to more lucrative offers from others. This step may include some client loss.

* Come to grips with the matter of staff compensation and benefits and the issue of hours. Lower salaries as compared to other fields, excessive hours, and the stress and demands of the public sector of the profession have taken a toll on the prospective members, as well as current members of public firms. We do need to "step up to the bar," and address these issues, as they will not go away with just wishful thinking. More competitive salary and benefit packages will be required if you're going to land the brighter prospects. Less demand for hours will also be a factor. Both of these will cause pressure on the firm's bottom line. Where does the money come from? Think about it: (1) from the owners' current compensation, (2) from increased fees (efficiency, value billing, and having clients do more on their end), or (3) from eliminating some hours and fees of either inefficient or less than profitable clients. This shouldn't be a difficult decision.

* Consider separate...