KPMG’s Greg Engel compares the accounting profession to the proverbial tortoise in the race with the hare – a tortoise that seeks to get ahead even as it competes with brighter industry sectors for workers.
The shortage of accounting talent is one of the main concerns preventing Engel — vice president of US tax for accounting firm Big Four — up at night as it assesses the challenges of the new year, even as KPMG has undertaken numerous initiatives to facilitate the talent shortage.
At the same time, he sees a potential silver lining for his sector in the recent wave of layoffs in the once sizzling tech sector that has won over some college graduates who might otherwise have gone into accounting.
“A lot of people got into the tech industry because it was exciting. But now that Meta and Twitter and all these other companies are laying off people, kids going into college might be like, “wait a minute, maybe KPMG sounds a little better than Twitter,” Engel said in an interview. . “Accounting is that boring, stable profession that doesn’t do so well in hugely expansive economies, but does very well when the economy is down.”
Make the case for accounting
Historically, the big four accounting and consulting firms have established strong programs designed to recruit and train accounting students right out of colleges and major universities.
KPMG, along with PwC, Ernst & Young, and Deloitte, hire thousands of graduates and students outside of colleges each year, often training them through internships that lead to full-time jobs. Many of the CPAs go on to become controllers, tax managers, and even CFOs. According to some industry estimates, the entry-level accounting salary range in such tax-related programs may be around $70,000 to $80,000, depending on the market.
“The hallmark of the Big Four was to train people really, really well,” Engel said. The longer employees stay with a company, the better their prospects after they leave, Engel said.
That means an employee who leaves after a few years could likely join a company’s accounting department at a lower level, he said. But if the employee leaves after reaching the senior executive level, they could join the same company as a controller — and those leaving as a partner could join as a chief financial officer, Engel said.
CFO machine showing signs of wear
But the machine for generating CPAs and CFOs has shown signs of wear and tear in recent years. On the one hand, KPMG was not immune to the Great Resignation. It was struck by the sharp increase in turnover which weakened the middle echelons of its workforce. “There’s kind of a battle in the middle,” Engel said. The company responded in part by hiring experienced accountants from companies like Apple and Home Depot, he said.
At the same time, accounting has attracted fewer students in recent years. The total number of U.S. students earning a bachelor’s degree in accounting fell about 8% in the 2019-20 school year compared to the 2011-2012 period, from 57,482 to 52,481 graduates, according to a report 2021 from the American Institute of Certified Public Accountants.
Seeding the pipeline
Accounting firms and organizations have taken deliberate steps in recent years to bolster their case with talent and address the talent shortage. For example, the AICPA and the Department of Labor announced in November that they had partnered to train candidates and expand the pool of professionals, CFO Dive reported.
If students are not deterred by the long hours and poor reputation of the accounting profession, they may be reluctant to put in the required credit hours before taking the exam to become a certified public accountant. This usually means that a student will need more education beyond a four-year degree.
To make extra tuition profitable, KPMG has worked with a number of universities to develop a Master in Accounting and Data Analytics Program which gives students the data analysis skills that are increasingly important in the field.
Recently, seven additional universities were added to the program and KPMG has committed to providing over $7 million in scholarships. Schools added to the program included some historically black colleges and universities such as Howard University School of Business and North Carolina Agricultural and Technical State University. Other universities that offer the program include Villanova University and Ohio State University.
Separately, KPMG has partnered with Engel’s alma mater, the University of Northern Iowa in Cedar Falls, Iowa, to help strengthen the accounting curriculum and opportunities for students attending the Des Monks Area Community College.
The company will also aim to provide internships for students who often attend school in the evenings or part-time, which can make it difficult to earn the credit hours needed to become a CPA.
“We’re going to start adding people to the profession with two-year associate degrees,” Engel said, noting that similar programs are popping up elsewhere. “We’ll give them a pathway to add the extra courses and programs they need.”