as private equity closes in, firms seek new answers to staffing problems

smart leaders are investing in tech, talent and orderly retirement timing.

by jennifer wilson
the rosenberg national survey of cpa firm statistics

we’ll see positive movement in staffing with more firms investing in outsourcing, offshoring, non-accounting staff added to work streams, increasing starting salaries, providing more support on campus to students and candidates, and other pipeline initiatives. the pace of consolidation and private equity investment will only accelerate, changing the face of the top 100, with firms separating their audit practices .

editor’s note: every year, the 2024 rosenberg national survey of cpa firm statistics asks the profession’s top consultants two sets of questions:

• • how do you think the next 12 months will unfold? trends? predictions? other thoughts?
  • how would you assess the last 12 months? trends? observations? struggles?

more: when staffing falls short, clients get culled | how accounting firms are dealing with retirement | next five years are critical for accounting firms | staffing turnover’s down, but why? | what’s your firm worth? private equity wants to know | the new pipeline: outsourcing and offshoring | is this the last year of accounting’s golden age?
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pe investors will have their hands full, trying to manage by the numbers, and drive change with traditionally change-averse, entrepreneurial partners who didn’t sign up originally to submit to a boss. and i fear that pe firms are overpaying for their equity stakes (and driving firm prices up for acquirers) and that realization will begin to dawn on some of them who realize there might not be a flip in sight.

more next-gen millennial leaders will ascend to leadership in key positions in firms, and for those remaining independent, this will signal healthy and significant change, sparking energy and momentum. artificial intelligence will blow people away with its application to traditional services, reducing time and cost of service delivery, opening up all sorts of opportunities and screwing up firms that charge based on time (don’t do it anymore!) and freeing up firms that get it.

we are certainly experiencing interesting times! significant talent shortages and a pipeline crisis, record growth and profits for many firms, an increasingly soft economy as the year has progressed with uncertainty around the election, and the “run” on cpa firms by acquirers and pe investors have all created a never-before-seen landscape in public accounting.

owners in firms with holes in their key future leader bench, retirees seeking destabilizing buyouts, or those who haven’t kept pace with critical organizational, operational or technological investments are seeking exits. the malaise or ambivalence this causes as they weigh their options and go quiet about the firm’s future with their team has halted their momentum and is causing whatever quality talent they must shop for alternatives. firms are up to their eyeballs with client deliverables and due dates, and their ability to proact around the critical aspects of change is limited, leaving a gaping hole for independent firms with vision and momentum to make hay. firm leaders committed to remaining independent have invested annually in talent and technology, building their bench, and retiring their boomers in an orderly way. they are now investing in business development and rainmaking skills for their important future leaders to ensure those critical skills are in place to assure firm sustainability. their competitive advantage in the face of the uncertainty within the less functional firms is considerable.

meanwhile, at the association level, the profession is rallying around the six themes and solution ideas outlined in the national pipeline advisory group’s comprehensive pipeline strategy report. the report, created by an independent group of 22 stakeholders from all corners of the profession, was published on july 31, 2024, and takes a data-driven approach to solutions that will grow the number of people attracted to a career in accounting.

posted on october 22, 2024