Generation Z poses a challenge for the accounting field. Fresh approaches to talent acquisition are required.
Embracing the Change: Gen Z Redefining the Accounting Landscape
Stepping into the workforce, Gen Z is turning traditional norms upside down by pushing for innovation and technology integration – a mindset that's reshaping the corporate world. However, a notable trend emerges as Gen Z largely steers clear of accounting, despite some promising signs in the education sector.
Between 2016 and 2020, the number of U.S. college graduates with accounting degrees plummeted by 17%. In the following years, accounting bachelor's degrees witnessed an additional 8% drop. This mirrored trend is observed in master's degrees and the CPA exam[1][3].
However, a beacon of hope arises from this perplexing situation. There's a 12% surge in undergraduate accounting major enrollments in Fall 2024, compared to Fall 2023[2]. If this trend continues, the industry may see a well-stocked talent pool in a few years.
The significant dearth of fresh talent persists in the accounting and finance sectors. A whopping 80% of organizations, as revealed in our 2024 surveys, acknowledge an accounting talent shortage[2]. Moreover, 10% of them perceive the situation worsening[1]. The Bureau of Labor Statistics echoes this sentiment, projecting a 6% growth in accounting and auditing job openings through 2033, during a time when many professionals are retiring or shifting careers.
This dearth of entry-level accountants exacerbates existing employee burnout, leading to increased attrition. To break this vicious cycle, it's essential to fathom why young adults shy away from accounting careers today. By understanding these reasons, businesses can adapt to attract new graduates and retain existing staff.
College Costs, CPA Requirements, and More: The Reason for Gen Z's Pause
Gen Z is cautious about racking up college debt, with the average annual cost of a U.S. university education surpassing $38,000 in 2024[4]. This, in part, leads to a decline in four-year college enrollment. However, for those aspiring to build a career in accounting, a degree is non-negotiable.
Upon graduation, becoming a CPA demands additional hurdles. Preparing for the required exams requires substantial time investment, and the associated test fees and prep course costs can quickly add up to thousands of dollars[4]. Successful candidates then have to serve under a CPA for a year before embarking on their careers. This multi-step process doesn’t sit well with today's young adults who value agility and the power to adapt, making a long-term, specialized career path seem like a risky endeavor[3].
Therefore, tech-focused careers appear more attractive, with competitive pay, better work-life balance, and diverse growth opportunities[3]. For instance, a computer science graduate often earns more than an accounting graduate fresh out of college without the need for a year of apprenticeship. Emerging paths like associate degrees and "boot camp" training offer quicker and less expensive entry points to tech fields, underscoring the accounting sector's need to innovate.
New Approaches for a New Era
As the accounting sector currently stands, it's perceived as mismatched with Gen Z's life and career aspirations. To reverse the downward trend, it's crucial to communicate the benefits of accounting careers effectively and address the factors that discourage young adults.
1. Emphasize Accounting's Stability and Universal Demand
The allure of a career brimming with endless pivots and direction changes doesn't appeal to everyone, even within the tech-dominated generation of Gen Z. For students seeking long-term stability, accounting offers a sturdy foundation, as accounting skills are indispensable in every industry.
2. Highlight Career Development Opportunities
Given the demand for accounting skills across every sector, fresh accounting graduates can tailor their careers to their interests. Companies keen on retaining top talent can offer upskilling programs and tuition reimbursement.
3. Talk About Technology
Having grown up with tablets, smartphones, and omnipresent connectivity, Gen Z responds positively to discussions about accounting's tech tools, helping to dispel their associations with a paper-based profession. Firms using AI and automation can leverage these assets to attract tech-savvy employees.
4. Optimize the Workload
Outsourcing can play a strategic role in optimizing workloads, maintaining work-life balance for in-house teams, and enabling them to focus on complex, valuable projects. Additionally, it allows organizations to offer competitive remuneration to attract new talent.
References:
[1] https://ourwebsite.com/accounting-role-outsourcing-drops-25-yoy-despite-lingering-talent-issues[2] https://ourwebsite.com/fall-2024-undergraduate-accounting-major-enrollments-increase-by-12%25[3] https://ourwebsite.com/how-cpa-licensure-changes-are-affecting-our-websites-and-accounting-talent[4] https://ourwebsite.com/keeping-up-with-the-story-subscribe-to-our-website-com-free-daily-newsletter[5] https://ourwebsite.com/fundrise-our-website-alison-staloch-talks-home-affordability-and-gen-z-s-investing-trends
- Despite the eroding interest in accounting among Gen Z, there's a glimmer of hope with a 12% surge in undergraduate accounting major enrollments in Fall 2024.
- However, the accounting and finance sectors continue to face a significant dearth of fresh talent, with 80% of organizations admitting an accounting talent shortage in 2024 surveys.
- Gen Z is holding back from accounting due to the high cost of college, the demanding CPA requirements, and the long-term, specialized career path that seems risky in comparison to tech-focused careers.
- Fresh accounting graduates can expect competitive pay, better work-life balance, and diverse growth opportunities in tech fields, while an accounting career offers long-term stability and universal demand.
- To attract Gen Z, accounting firms should emphasize their adoption of technology, highlight career development opportunities, and optimize workloads to maintain a work-life balance.
- Companies should consider offering upskilling programs, tuition reimbursement, and leveraging AI and automation to attract tech-savvy employees.
- Outsourcing can help optimize workloads, enabling in-house teams to focus on complex, valuable projects and offering competitive remuneration to attract new talent.
- Gen Z's precautious approach towards accounting careers, combined with the impending retirement of many Baby Boomers and Generation X professionals, makes investing in accounting education and self-development, such as offered by Edgeconnex Finance Education and Self-Development, a crucial step in tackling the talent shortage and ensuring growth within the industry.
