The Accounting Profession's Labor Crisis: How We Got Here.

• Author: Williams, Albert S.

This is the first in a series of articles dealing with the profession's most prominent crisis: a current staff shortage and a future bleak in terms of a trend reversal. Subsequent articles will be "Damage Control: Protecting Your Firm's Most Valuable Asset--Your Labor Supply"; "Seeking Staff Through Alternative Supply Sources"; and "Solutions to the Crisis, Including Strategic Alliances."

The final vote has been tallied and it is unanimous. There is presently a staff shortage in virtually all sectors of the profession. What's more, with a 20% decline in accounting majors, it isn't going to get any better in the near, and maybe even distant future. Whether you talk to a small, one- or two-person firm, a national firm partner, or a CEO seeking a controller, the lament is the same: "It is increasingly difficult to find anyone at all, let alone highly qualified staff."

Studies of potential accounting students

A number of reasons are given for the staff shortage, many supported by empirical data, some by first-hand experiences, and others by theoretical conclusions. There also have been two recent significant surveys and studies of future accounting and related-field students, and their reasons for opting, or not opting, to enter the accounting field.

Accounting Education Series, volume no. 6, titled Accounting Education: Charting the Course Through a Perilous Future, by W. Steve Albrecht and Robert J. Sack, was a joint project of the American Accounting Association, the AICPA, the Institute of Management Accountants, and the Big Five professional service firms. The objective of the study: "Write a high-level thought piece, supported by evidence where possible, about the future of accounting education." A second survey was an AICPA-commissioned report by the Taylor Research and Consulting Group, Inc., which included over 2,000 interviews with high school and college students. Both studies clearly suggest the profession has a critical staffing problem.

Changes in the business environment

Very briefly, the Albrecht and Sack work suggests significant changes in the business environment that have altered the historic role of the accountant. That role was to prepare financial information for decision-making purposes, to audit, and to comply with regulatory requirements.

The impact of the changes cited were:

1. Information preparation and dissemination is less expensive, due to developments in technology.

2. Competition and performance awareness have...