The worker shortage that began during the COVID-19 pandemic is starting to ease up in some industries, but it remains a challenge in accounting and finance. In a survey recently conducted by Robert Half, nearly nine out of 10 (87%) managers at U.S. companies said they are finding it increasingly difficult to find talent to fill general accounting, financial reporting and financial planning and analysis positions.
This shortage of financial and accounting talent is affecting all size companies across many different industries. Small and privately held businesses, however, are especially feeling the pinch.
Statistics Illuminate the Problem
A recent article in The Wall Street Journal pointed to more statistics illuminating the talent shortage in finance and accounting. There were 36,540 more postings for accounting and audit jobs in the U.S. in 2022 (through November 30) than there were the prior year. This was the highest number of accounting and audit job postings (177,880) since 2008.
In addition, employees started just 113,400 of these jobs (through November 30), which was down 16% from the prior year. It’s now taking 56 days on average to fill accounting and audit jobs, which is up 10 days from the prior year.
The article pointed to several possible reasons for the financial and accounting talent shortage. For starters, fewer young people today are pursuing college degrees in finance and accounting. The number of students in the U.S. who completed accounting degrees during the 2019-2020 academic year fell by 2.8% for bachelor’s degrees and 8.4% for master’s degrees compared to the prior year, according to the AICPA.
There is often a lack of awareness among young people about career opportunities in audit and accounting, noted an AICPA spokesperson. The organization is actively working to raise awareness about the profession among middle-school and high-school students. Meanwhile, demand for accounting and finance employees is expected to remain strong in the near-term future.
Outsource Finance and Accounting Using FaaS
To attract and retain accounting and finance employees, many companies are offering higher starting salaries, more frequent salary increases and faster promotion opportunities. But there’s another solution to the financial and accounting talent shortage: Outsourcing the finance and accounting function to a third-party service provider.
Sometimes referred to as Finance as a Service, or FaaS, this approach gives companies a full suite of staff, services and software that’s capable of managing the entire finance and accounting operation. This includes processing transactions and customer payments, paying vendors and producing monthly financials and more. It is very typical for a FaaS solution to lower the cost of a finance function compared the traditional “build it in-house” approach. Many customers experience a 20-40% reduction in the cost of their finance function.
In other words, FaaS is a one-stop financial and accounting services shop. The FaaS provider will have its own staff and software platform, so the customer does not have to bear the burden of staffing issues or software upgrades.
FaaS also features transparent pricing so it’s easy to forecast what costs will be as the company’s needs change in the future. A FaaS provider charges based on headcount and services offered, not by the hour or based on the level of staff assigned to the client. This way, companies know exactly what they’re paying for and how their costs will rise or fall as they scale up or down.
With FaaS, companies have access to skilled finance and accounting professionals with the right level of expertise for their specific needs. For example, sometimes businesses need a higher level of strategic expertise, like when performing acquisitions and onboarding new entities. With FaaS, businesses pay for this higher level of service only when they need it.
FaaS: A Creative Solution
Incorporating the FaaS model is one creative way middle-market corporations can meet the challenge of today’s financial and accounting talent shortage. It will also relieve finance and accounting managers of the time-consuming and expensive task of interviewing, hiring and training potential new employees and retaining them once they’re on board. This will free managers up to spend more time doing strategic, value-added work for your company.
Consero Global offers Finance as a Service for middle-market businesses across a wide range of industries. To learn more about FaaS and how it can help you overcome the challenges of the talent shortage, connect with us today: https://conseroglobal.com/request-a-consultation/