The Government Performance and Accountability Committee (GPAC) virtual spring 2024 meeting took place in May and included a presentation and discussion around the talent pipeline issues facing our profession. The way forward on these issues remains under discussion, and the responses vary depending on whom you ask. Some say artificial intelligence (AI) is the future — get with it or get left behind. Others say robots and computers will replace us, and we need to evolve, expanding what we offer clients by stepping into a more advisory role. Still, some say investing in human capital is the best way forward. The focus on alternative paths to expanding the talent pool — through various avenues such as outreach to community college students, apprenticeships, changing the education requirements, and other efforts along those lines — is gaining more traction. The need for the accounting profession is not going anywhere; in fact, the need for CPAs is at an all-time high.
Mary Peterman, CFO of the Federal Housing Finance Agency and a seasoned public servant, was one of the spring meeting guest speakers. She shared her views and experiences based on her many years in government. Peterman noted that the pipeline issues and how to solve them have been a focus of discussion for the last 5–10 years and that the COVID-19 pandemic exacerbated the issue by creating what she called a “retirement tsunami.” The challenges experienced during the pandemic will continue to come in consistent waves. She pointed out that the two generations behind the baby boomers are smaller, so the pipeline issue was inevitable and is a pressing one.
One viable strategy has been to focus recruitment on sophomore through junior year college students and, leveraging the Pathways Programs the federal government offers, hire them directly after graduation with the agencies. Another issue discussed by attendees was how antiquated position descriptions (defining accounting position requirements of the past) deter new tech-savvy talent. Potential recruits may perceive those positions as not maximizing their talents, so they seek positions viewed as more high-value analytical work. This perception may be exacerbated by the resistance among some in the accounting field to adopting new technologies. A meeting participant shared about a Gartner study showing that accountants, in the public and private sector alike, were hesitant to adopt unproven digital technologies that “would pose bigger implementation problems and a less certain return on investment.”¹ In public sector entities where technology has been added or developed, participants noted that in some cases it just digitized “bad” processes. Ms. Peterman’s suggestion was to work with the available automation tools so that the labor shortage is less of a problem. “Let automation do the repetitive tasks so that we can have fewer employees doing high value work. Automating, training, retooling, rinse and repeat; because we have fewer humans who are available, able, and willing to do the work.”
Another speaker addressing the talent pipeline issue was Rebecca Olson, CEO of the Maryland Association of CPAs (MACPA). Her message confirmed that MACPA members are facing talent and human capital issues as well. Referencing a membership poll, Olson noted the top five problems MACPA members had dealt with in the preceding six months were talent, new skills/upskilling, maintaining culture in a hybrid work environment, cybersecurity, and hyperinflation. Noting a shift from just two years ago, when 75% of her presentations were on technology, Olson said that now about 50% of her presentations are on human capital. From her perspective, the profession has moved from focusing on technology to people, especially mental health concerns. She conveyed that the successful CPA of the future will balance the technology and human capital aspects of our profession. She quoted the late Roy Amara, American scientist and one-time president of the Institute for the Future: “We tend to overestimate the effect of a technology in the short run, and underestimate the effect in the long run.”² Olson repeated a prediction she had heard at a past AICPA conference: “AI will not replace CPAs. CPAs who use AI will replace CPAs who do not.” Olson also reflected on the Gartner Hype Cycle for Emerging Technologies report released in 2022, which predicted that generative AI would move from innovation to a “plateau of productivity” in 5–10 years.³ In the 2023 report, generative AI had suddenly reached its “peak of inflated expectations.”⁴
After the GPAC spring meeting, I attended NABA Cleveland's Spring Accounting Conference. There, speakers from the Ohio Society of CPAs and others discussed alternative methods for addressing pipeline issues. Methods included connecting with accounting programs at high schools, tapping into the community college pipeline, and even looking at alternative routes to certification. One such alternative is the Accountancy Board of Ohio’s Graduate Management Admission Test (GMAT) exam requirement option, which allows individuals with four years of accounting experience along with 24 hours of accounting coursework or business courses, such as finance, statistics, and the like, and a GMAT score of 670 to sit for the CPA Exam. This nontraditional, alternative track may be a major door to qualify to sit for the exam, encouraging more talent to enter the accounting profession.⁵
So, which one of these methods is the answer to the pipeline drying up? Personally, I believe that it will take a combination of approaches. What is required from public sector to private sector, from corporate America to small businesses will vary at different times and with different circumstances. To solve our pipeline issues, we need to explore and incorporate all these avenues in discussion and action. Living in a fast-paced era, we must evolve and be dynamic with what our customers' times or needs call for. The alternative? Someone not in the profession will produce an innovative, industry-disrupting approach to our customers' problems and we will be on the outside trying to get in.
¹Gartner, “Gartner Survey Identifies Top Emerging Technologies for Finance Organizations,” February 25, 2021, https://www.gartner.com/en/newsroom/press-releases/2021-02-25-gartner-survey-identifies-top-emerging-technologies-for-finance-organizations.
²The Virtulab, “What is Amara’s Law and why it’s more important now than ever,” January 26, 2022, https://thevirtulab.com/what-is-amaras-law/.
³Lori Perri, “What’s New in the 2022 Gartner Hype Cycle for Emerging Technologies,” Gartner, August 10, 2022, https://www.gartner.com/en/articles/what-s-new-in-the-2022-gartner-hype-cycle-for-emerging-technologies.
⁴Lori Perri, “What’s New in the 2023 Gartner Hype Cycle for Emerging Technologies,” Gartner, August 23, 2023, https://www.gartner.com/en/articles/what-s-new-in-the-2023-gartner-hype-cycle-for-emerging-technologies.
⁵Accountancy Board of Ohio, “Sitting for the Exam,” accessed August 1, 2024, https://acc.ohio.gov/becoming-licensed.