As accounting professionals prepare for the new year, one of the challenges that remains top of mind is talent: 41% of accounting firms said staffing challenges will “significantly impact” the accounting industry, coming at a time when many are focusing more tightly on improving efficiency and profitability, a recent study by Wolters Kluwer found.

Creating a positive work culture is “huge” when it comes to addressing ongoing talent shortages in the industry, said Dean Sonderegger, SVP and general manager, Canada and Research & Learning US for Wolters Kluwer.

While “culture” can often be applied as a vague term, it can be loosely defined by asking such questions as, “do people have a sense of purpose in their work?” Sonderegger said in an interview.  “Do we value them as individuals and not just as employees?”

The new accounting culture

The accounting industry is facing a similar talent quandary as the technology space, with both vying for a narrow pool of potential employees with the skills they need to conduct key tasks. Improving culture is emerging as a way to retain talent in both spaces, CFO Dive reported. Unlike tech, however, one of the factors impacting talent shortages for accounting is that the traditional accounting career path taken by past generations seems to be “less appealing” to newer graduates in the space, Sonderegger said.

The space has struggled to attract new graduates as it looks to cast off a perception as a profession with long hours spent doing time-consuming, routine tasks — and at a breakneck pace that often contributes to burnout, according to a 2023 report by CFO Dive.

That may put it on the back burner as a career choice for younger employees such as those belonging to Generation Z — which has “much more of a desire for purpose in the work they're doing and balance in their professional life,” Sonderegger said. For accounting companies seeking to bring in new blood, creating a more positive, flexible and supportive company culture can therefore be a key talent draw.

“If you have this mentality of, ‘hey, I [ground] through this...and this is the way it is, and the school of hard knocks [is what] we go through, I do not think that is competitive in today's market,” he said of culture.

Thirty-two percent of respondents said they were looking to ease talent-related challenges by “enhancing company culture,” Wolter Kluwer’s survey, The Future Ready Accountant, found. Meanwhile, 37% cited creating flexible work arrangements and 38% said they were offering competitive salaries and benefits as ways to address talent shortages, the survey of over 2,300 respondents found.

When it comes to enticing talent, the question many accounting firms are facing is ultimately how to ensure those employees can do “more meaningful work in less grinding” ways, Sonderegger said.

A key part of retaining talent once attracted is getting employees to do “work that they think is value-added and attractive, as opposed to routine,” he said — and as well as culture, “competitive technology plays a role in that.”

Entering the AI age

The accounting world has not been left out of the evolving conversation around AI: for many, incorporating the technology into the space represents an opportune way to address their ongoing talent challenges. According to the Wolters Kluwer survey, 61% of respondents say bringing AI into accounting “creates the capacity for more engaging work,” while 35% of respondents say it also helps to attract “tech-savvy” professionals.

Incorporating the technology can help accounting firms fill critical gaps in their teams in ways that could have significant impacts on the future of the profession, Sonderegger said. Traditionally, many accountants are specialists, rather than generalists, focusing on particular areas such as real estate, for example, he said.

“The problem with that is that in a time of relative scarcity of workers, I can't necessarily hire all those specialties there,” he said. “But AI has an interesting opportunity to say that if I'm a generalist and I'm really well trained in tax or accounting or whatever have you, then I can use these tools to kind of dig into that particular area.”

Twenty-seven percent of respondents said they currently use AI in their workflow, while 22% said they plan to incorporate it in the next year, Wolters Kluwer’s survey found. The interest in integrating AI and similar technologies is also coming as the accounting industry itself goes through an evolution.

As automation takes over many routine tasks, the value of traditional “bread and butter” accounting services — tax compliance or tax prep services, for example — is degrading over time, Sonderegger said.  

In the face of such change, firms are turning more and more to advisory services. Presently, 83% of such firms offer advisory services, with 49% of that number offering them as part of their core services, while 34% do so upon request, according to the survey. Twenty percent of respondents plan to expand their advisory offerings this year, meanwhile.  

That shift puts an emphasis on the need for a collaborative relationship between AI and accounting professionals when it comes to the future of the profession. While AI could take over more manual tasks — potentially reducing the number of accountants needed on an average team — the technology currently lacks the capability to provide advice in the same way an experienced accountant can.

Sonderegger likened the relationship between accountants and AI to that of machine learning models playing games such as chess.

“If you're in the world of highly competitive chess right now, where we've gotten to at this point in time is that a machine might be able to beat a grand master,” Sonderegger said. “But really what typically happens is that a grand master, with machine assistance, is able to beat everything.”