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Hiring of US accounting graduates drops 30%

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From Accounting Today: The hiring of accounting graduates by CPA firms has declined 30 percent in recent years, and Illinois CPA Society president and CEO Todd Shapiro hopes to reverse that trend and make the profession more attractive to firms once again.

That’s especially needed in the midst of the novel coronavirus pandemic, when businesses have been laying off and furloughing staff, including accountants, leading to record levels of unemployment earlier this year before some companies began rehiring in recent months as the economy showed tentative signs of improvement. But corporate America has also been reducing the number of CPAs hired in recent years.

“Hiring of accounting graduates is down 30 percent,” Shapiro said Tuesday during the ICPAS Summit, an annual conference that the Illinois Society held online this year. “That’s a massive decline in hiring of accounting graduates by CPA firms. This isn’t companies that traditionally haven’t hired accounting graduates that aren’t CPAs. These are accounting firms.”

At the same time, he has been seeing firms hiring non-accountants out of school, especially those with technology skills. “Yet there’s been an 11 percent increase in the hiring of non-accounting graduates, be they analysts, technologists, whatever the case may be — people who can use the technology to derive the information better,” said Shapiro. “So in fact we’re beginning a shift, and the question is how do we stave it off?”

He believes it’s essential for more accounting students to learn advanced technology skills. “In my mind, there’s no reason to hire a non-accounting graduate,” said Shapiro. “Hire an accounting graduate who has the right skills to do everything a non-accounting graduate can do. Hire an accounting graduate who in fact has the skills and capabilities and can perform those new skills that we’re seeing today.”

Like CPA firms, companies too have been reducing their hiring of CPAs, at least as CFOs. The percentage of Fortune 1000 CFOs who are CPAs fell to 36 percent last year, according to the consulting firm Korn Ferry, an all-time low from 2014, when the figure was 46 percent. “It’s not just on the firm side,” said Shapiro. “So if you’re working on the corporate side and asking if it’s affecting us, the answer is yes, it’s affecting the entire profession. Because people in fact are looking for different skills.”

That’s making accounting a less attractive option to many college students, whereas not long ago, many firms had trouble filling the pipeline of recruits.

“Students are seeing this,” said Shapiro. “Let’s not kid ourselves. When you’re in college, you think about what you’re going to do with your career. You think about what the opportunities are, and what skills you need. And when you look at who’s getting hired, and if you see a 30 percent drop in hiring of accounting graduates, you start thinking about whether I should be a CPA.”

He cited figures from the American Institute of CPAs tracking the number of new CPA candidates each year. It showed a 10-year low in 2018 after a big jump in 2016 and a stable level in 2017, perhaps due to upcoming changes in the CPA Exam.

“Whenever there are changes in the exam, we see people flock to take the exam before they make the changes,” said Shapiro.

The Illinois CPA Society is doing further research on the causes with accounting students and some recent graduates who have not pursued the exam to understand why, and whether it has anything to do with the requirement for 150 hours of semester study.

“Is it the 150 hours? Is that a factor? I’m not sure that’s the case,” said Shapiro. “It’s been around for a long time.”