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Every accounting firm seems to be trying to find staff. With decreasing accounting program enrollments in colleges and students being drawn to other majors perceived to be “sexier” or more lucrative, staffing concerns are also being voiced by the accounting industry media and Professional Accounting Organizations (PAOs). How can firms continue to serve their clients without burning out their existing staff? Are firms looking at the full set of strategies available to address their staffing needs? The two primary strategies firms seem to focus on are (1) hiring and (2) outsourcing. But in addition to these there are the strategies of workload reduction and demand reduction.

Hiring itself has evolved post-pandemic, with a rise in domestic remote workers and increased openness to offshoring. Many large firms had already figured out the benefits of an offshore team before the pandemic, but in the last year we’ve seen even small- and mid-sized firms asking how they can utilize offshore resources. The use of remote workers, and especially those offshore, comes with significant cybersecurity risks, but the sheer shortage of onshore talent is forcing firms to accept and manage those risks.

Different Categories of Staff

Historically, accounting firms have also hired full-time, upwardly mobile staff. Staff were recruited from four-year universities with the expectation that staff would rise through the ranks (of course, some would decide to leave after qualifying for licensure) and eventually become partners.

The staffing shortage has also changed this norm, with firms adopting changes like:

  • Allowing part-time positions, and even part-time partner tracks;
  • Hiring staff with 2-year degrees or who may not qualify to be upwardly mobile to reduce turnover in the core staff focused on client service delivery;
  • Increased use of independent contractors and other “gig workers,” including using apps that facilitate gig worker marketplaces; and/or
  • Staff sharing agreements among firms within a network or association.

All of the above strategies are still focused on the labor available to a firm; they do not address the potential to reduce the labor needed by a firm.

Workload Reduction Strategies

Another way firms address labor shortages is by reducing the amount of actual work that must be done. Proven strategies for this include:

  • Automation and the use of technology; and
  • Work optimization, including techniques like Lean or Six Sigma.

These strategies help firms to get more work done without having to increase headcount, or, as is the current case, help firms reduce staffing needs while still serving the same clients.

Another strategy firms appear to be using is discontinuing offering services that are labor intensive and usually not as profitable. For example: long ago, many large firms stopped offering bookkeeping services because they weren’t as profitable as audit or tax services. Currently, there is an upswell in what is now called Client Accounting Services (CAS), because of two of the above strategies: (1) the use of technology to automate bookkeeping and (2) the use of cheaper, offshore labor to do the work. Firms are using multiple alternate strategies to address staffing issues, rather than simply hiring more staff.

The last workload reduction strategy is outsourcing an entire part of a service being delivered. We see this more often in IT and HR where, for example, a managed service provider (MSP) may be used to take care of routine IT support and operations, or payroll processing is outsourced. However, firms may use this approach for services that are labor intensive with low client touches and where there are already service providers who specialize in the work—like bill payments or collections.

Demand Reduction Strategies

We often see firms use this last set of strategies less because partners are often reluctant to turn away prospects or “fire” existing clients. Demand reduction strategies also effectively decrease work, but they do so by reducing the number of clients.

The most commonly discussed technique is “culling,” “firing,” or “grading” clients. Firms may consider this getting rid of their least profitable, “C” and “D” clients that don’t match the firm’s strategic direction.

Sometimes this is done simply with a firm saying they won’t serve a client anymore. Other times, clients are “encouraged to leave” by increasing fees beyond what a firm thinks they would be willing to pay. Firms can be surprised by clients who are willing to pay the higher fees—a great testament to the value provided to the client, though it doesn’t help to solve the staffing issue.

Other strategies used by small- and mid-sized firms include accepting work only by referral and requiring that the client pay for an assessment or initial consultation before agreeing to ongoing services. The paid assessment is a strategy that my firm uses to pre-qualify clients who are willing to pay for our advice. It allows us to get a feel for what it’s like to work with the client for a limited time before committing to a longer-term relationship.

Which Strategies are Successful?

All of the strategies above have had some success, but the question is which ones are the best? That is actually the question the Center for Accounting Transformation, CPA Trendlines, Hunter College, and researchers at DePaul University are all trying to answer. We would love to learn more about which strategies have worked or not worked for you and why. Participate in our Staffing Strategies Survey to share your experience with these strategies and also learn what worked for others. Together we can mitigate the staffing crisis and ensure that the accounting profession remains a top career choice for future generations.

(Note: If you’re a PAO and would like to have your members participate and have a research report created focused on your membership, please complete our Research Ally form.)

Donny C. Shimamoto

Managing Director, Intraprise TechKnowlogies

Donny C. Shimamoto CPA, CITP, CGMA is the managing director at Intraprise TechKnowlogies. He has been recognized as one of the Top 25 Thought Leaders in Public Accounting (US) and is a frequent speaker at AICPA conferences and CGMA webcasts. He specializes in organizational development and IT advisory services for small and mid-market businesses, nonprofits and accounting firms. He welcomes comments and feedback at