Applicant flow for accounting firms has taken a major turn for the worse

Is your accounting firm currently struggling to find enough qualified candidates for your open positions?

If so, you’re not alone! 

I recently did a deep dive into the data around the business services area, in an attempt to get a better understanding of just how bad the talent shortage is. 

Out there in the professional labor market, I looked at job openings versus unemployment positions for professionals that are over 25 years old, with at least a bachelor's degree. 

Pre-COVID, the data showed there were about 8% more openings than unemployed people. And at the time, before COVID, people were still complaining that it was getting hard to fill open positions.

But today, that number has gotten significantly worse. 

There’s been a shift in job seeker supply vs demand! 

There are currently 23% more job openings than there are unemployed people. 

That's a 183% increase versus before COVID. 

Although we don’t always hire currently unemployed people, the goal of this measurement is to give a gut check of the overall supply and demand when it comes to professional talent. 

I went and dug into my own client base of accounting firms to see if this was holding true there as well. We have about 50 accounting firms that use our hiring platform. I pulled data on applicants versus jobs from the last quarter of 2019, versus the last quarter of 2021. And by looking at just over 400 job openings, I saw something very similar. 

There was a 41% drop in applicants per job. 

The talent shortage is a big deal if you're in the accounting world!

I've talked to a ton of accounting firms lately about some of the challenges they're having and what they're doing to try to solve them…

Most accounting firms have been throwing money at the problem

Whether that’s increasing their job board spend money, increasing sign-on bonuses, and even hiring third-party recruiters. The bottom line is… most of them say that it hasn't helped. 

Or, they’ll increase their employee referral payout and see an initial small bump in applicant flow, but then it went back to normal. 

Money isn’t the answer to your recruiting problems! 

The reason money won't solve an employer’s applicant flow problem, is because all of your other competitors match or increase their spend, too.

It becomes this bidding game where each employer attempts to top each other until the person with the most money wins. And I'm guessing, as a small or midsize business, that's probably not your firm. 

Some companies have been using third-party recruiters and what they're seeing is recruiters are increasing the cost per hire from 15% of first-year salary up to 25%, which is a pretty steep fee if you ask me.

To make it even worse, I was talking to an HR Manager for one of my accounting clients who dug into the details of their contract and found that they only had exclusive rights to that hire for 12 months. Meaning, after the first 12 months, that same recruiter could come back and poach the person away to get them hired on at a different firm simply to earn that fee again. 

We’re playing Hiring Musical Chairs

The players are the job seekers out there in the market, and the chairs are the jobs that are available. And, the game of musical chairs relies on having more players than chairs.

The problem we’re facing in the current game is that we don't have enough players and we have too many chairs. Meaning, there's not a huge motivation for people to move from one chair to the next. 

We also have to consider the number of new players joining the game. The data from accounting today says that there are fewer people entering into MBA programs now than there were before. And the ones that are entering are entering part-time instead of full-time. Meaning there are fewer new players entering the game. 

There are also a lot more players leaving the public accounting game to go work for a corporate accounting gig. Whether it's for a work-from-home opportunity, less travel, less stress, or fewer hours, the fact of the matter is, COVID has driven more people out of the public accounting world. 

Now, by this point, you’re probably thinking… I already knew the talent shortage was bad. It’s likely a hiring pain you feel every day. 

Do you want your firm to compete, and win this war for talent?

1. Know the game. You need to understand what is being played and how it works. 

2. Know who your competitors are. This means understanding their position and the way they're approaching the game. 

3. Know where you fit in. Are you the big dog? Are you the little dog? Are you somewhere in between? Are you Goliath? Are you David? Or are you somewhere else? 

4. Create a recruiting strategy. One that plays to your strengths and attacks the weaknesses of the bigger firms. 

5. Launch your recruitment marketing engine. Take your strategy and launch it. 

6. Keep your engine running. Add fuel to keep it growing and evolving.

If you would like a deep dive into how to do this, and what this should look like, check out the video below. I went through and unpacked the game of musical chairs, best practices, bad practices, and exactly how to think about approaching this game.

If you'd like to talk more about this, I'd love to set up a free 30-minute hiring consultation. Click the button below!

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