Accountant shortage forcing Long Island firms to boost pay, improve office culture

Allison Sajkoski began her career as an accountant in 2021, working in the audit department for one of the "Big Four" accounting firms.

But just a year later, she exited the field. 

The Massapequa resident found the demanding work schedule and completely remote work during the COVID-19 pandemic overwhelming.

“I kept going from busy-season clients to busy-season clients. There was no downtime whatsoever," said Sajkoski, 26, adding she was putting in 80-hour workweeks and living at home with her parents.

"It was a very isolating experience,” said Sajkoski, who is now working as a certified financial planner.

Work burnout, along with other factors, including more options for college graduates in high-paying careers, from computer science to engineering, lagging salaries compared to other high-paying fields and a growing number of baby boomers in the field who are retiring, are contributing to the shortage of accountants nationally, and on Long Island.

Additionally, the stringent requirement for accounting students to complete 150 semester hours, or the equivalent of five years of college education, to become a certified public accountant makes it challenging for those seeking a degree in the field, accounting professionals said. 

"The accounting community, the accounting professions, had what we call a pipeline challenge for quite some time. It's become more pronounced and a lot more obvious as we're seeing more and more businesses, particularly small businesses, have difficulty finding accountants," said Calvin Harris, CEO of the New York State Society of Certified Public Accountants, which is headquartered in Manhattan.

On Long Island, the number of accountants and auditors slightly grew 1.5% to 22,270 between May 2022 and May 2024, according to the latest data from the New York State Department of Labor.  But the retirement risk is high, with 41.8% of accounting professionals on Long Island being at least 55 years old, compared with 33% of the overall workforce in the region, said Shital Patel, labor market analyst for the labor department. 

With 245 accounting job openings on Long Island in March, "the occupation now has the fourth-highest number of openings on Long Island for jobs that require at least a bachelor’s degree, behind registered nurses, financial managers, and sales representatives," said Patel, citing data from Lightcast, a labor analytics company in Moscow, Idaho.

Nationwide last year, there were 1.8 million accountants and auditors, which was 186,000, or 9.5%, fewer than the number five years earlier, according to the U.S. Bureau of Labor Statistics.

The shortage has led to fewer accountants available to prepare tax returns, conduct audits and handle other financial services for clients, and it has created more work for those remaining in the field, even causing some work delays, Long Island accounting professionals said.

Smaller firms, bigger challenges

Fuentes and Angel CPAS LLC in Jericho is one of the Long Island firms that has been affected by the shortage of accountants.

"We’ve had to put a lot more in [tax filing] extensions in the past two years than [we] would have liked in order to get through tax season and still try to maintain a work-life balance,” said Lynne Fuentes, who owns the firm and whose six-person staff includes two full-time accountants.  

With about 1,000 business and individual clients, the firm provides tax and estate planning, business advisory and financial consulting services, Fuentes said. 

Experts said the shortage of accountants is hitting small and medium-sized accounting firms harder because they will have a harder time matching the salaries of larger firms, especially the so-called “Big Four” — Deloitte, EY (Ernst & Young), KPMG and PwC (PricewaterhouseCoopers).

All four have U.S. headquarters in Manhattan and offices on Long Island.

“Firms that are having trouble getting talent might need to look at how they phase compensation increases throughout the career pathway and raise starting salaries,” said Lisa Simpson, vice president of firm services at the American Institute of Certified Public Accountants and the Chartered Institute of Management Accountants in Durham, North Carolina.

Salaries for accountants are starting to increase after lagging for years, experts said.

This year, salaries are projected to increase an average of 8.9% for public accountants, 8.4% for tax services roles and 9.5% for audit and assurance positions, according to CPA Practice Advisor, a Fort Atkinson, Wisconsin-based publication.

On Long Island, average starting annual salaries for new accounting graduates working at large firms range from $85,000 to $90,000, while the range is $75,000 to $85,000 at midsize firms and $65,000 to $75,000 at small firms, local experts said.

The median annual wage for all accountants on Long Island is $101,227, according to the state Department of Labor. 

Fuentes would like to hire two more accountants but has found it challenging to compete with large accounting firms that can offer higher starting salaries.

Two years ago, she raised her firm’s fees by 30%, which resulted in a loss of 30% of clients, but she was still able to raise staff salaries by 10%, she said.

She is also offering employees more opportunities for work-life balance, including a week off in July and December. 

Offering competitive salaries is challenging even for small firms seeking part-time workers, said certified public accountant Jacqueline A. Burke, who is chairperson of the accounting department at Hofstra University in Hempstead.

“I have small firms calling me all the time [seeking students for part-time work]. … And I keep telling them you have to raise the hourly rates," she said. When they do, "they get much better success because there’s so many jobs out there now,” and there aren’t enough students.

The competition for accountants is so fierce that most of Hofstra’s accounting students have full-time jobs lined up a year before they graduate, Burke said.

Fierce competition

Alex Sarafyan, 23, of Westbury, who graduated from Hofstra with an accounting degree last year, is finishing a master’s program in taxation accounting in May. Sarafyan, who interned at Deloitte the past two summers, said he is set to start a full-time job as a tax consultant there this summer. 

“I always loved math, organization," he said, adding job stability was a big reason he chose accounting for a career.

Hofstra student Savannah Weyrauch, 23, graduated with a bachelor’s degree in accounting last year and will earn her master’s in May.

This summer, she’ll start a full-time job as an auditor in EY’s Jericho office, where she interned last summer.

Some of her friends in other majors are surprised at how quickly she was hired for a full-time job, she said.

“It’s easier to get a job in accounting right now due to the shortage, as long as you’re a good student, you display good skills that you can take to the workforce,” said Weyrauch, of Bloomington, Illinois.

In addition to offering job stability, even during economic downturns, accounting is also providing more career options for students than in the past, said Keval Amin, associate professor and area head of accounting at Stony Brook University.

"There's greater flexibility than there used to be. And then there are also opportunities to specialize in different areas, such as forensic accounting, cybersecurity assurance," he said.

Addressing a talent shortage

While there has been an increase in the number of students pursuing college degrees in accounting in the past several years, the numbers are not increasing at a fast enough rate to replace retirees, experts said.

Nationwide, in the fall semester, there were 267,278 undergraduate college students enrolled in accounting programs, a 12% increase from a year earlier, according to the American Institute of CPAs, citing data from the National Student Clearinghouse Research Center. Last fall's enrollment was still less than the 275,963 students enrolled in fall 2019, before the COVID-19 pandemic started.

The accounting industry should address its talent shortage in six ways, including making the academic experience more engaging for students, reducing the time and cost of education, expanding access for underrepresented racial groups and changing the outdated image of accounting, according to a report issued in July by the National Pipeline Advisory Group. The group was formed by finance, government, nonprofit, academic and other professionals.

That outdated image includes the assumption that accountants have to be math whizzes, but, in reality, technology, including the growing use of artificial intelligence, has eliminated the necessity for exceptional math skills, industry experts said.

Being a problem solver "irrespective of where your skills may be with mathematics" is helpful, Harris said. 

In April 2023, PwC committed to investing $1 billion over three years to expand and scale up its AI capabilities.

The investment will help the company develop tools to serve clients better and take on repetitive work, said Allison Rosier, managing partner in PwC’s Manhattan office.

PwC has about 9,440 employees in its New York City area market, including 160 in Melville, and 75,000 firmwide.

The firm pays a competitive salary, offers incentive bonuses based on performance and hybrid work schedules to attract and retain accountants, Rosier said.

“We don’t plan on going back to five days a week as we did before COVID. We believe in working flexibly,” she said.

In tune with employee needs

Also contributing to the image problem is the fact that the profession is known for requiring long work hours, which turns off some younger workers like Sajkoski, who place a higher value on work-life balance and company culture than older workers do.

The younger generations want "feedback. They want flexibility. They want transparency. They want social responsiveness. They want to know that the organization they work for is making a difference in the community,” said certified public accountant Ken Cerini, who in 1993 founded Cerini & Associates LLP, a full-service accounting firm in Bohemia with about 80 accountants, 20 of whom are CPAs.

A growing number of accounting firms is trying to address work-life balance issues by offering flexible work schedules, reducing the number of hours worked during the busy tax season and providing more time off.

“All of us who are owners and operators and partners in firms have to work toward being sensitive to the people that work for us, and their life, sensitive to their family and what they need,” said Ernest Smith, a partner at Nawrocki Smith, a 70-employee accounting firm in Hauppauge that has been offering a hybrid work schedule since July 2020. 

Most employees at this firm don’t have permanent desks at the firm because they share workspaces and don’t come to the office five days a week, said Smith, who also is an adjunct professor in the graduate forensic accounting program at SUNY Old Westbury.

Still, the firm has had a consistent need for three to five accountants for the past few years, he said.

One of the Big Four firms, KPMG, which has 11,699 CPAs in the U.S., including 70 in its Melville office, is also working to lessen the workload for employees, including by starting projects earlier, so that there is less of a time crunch in the busy season, said Felicia Tucker, a Long Island office managing partner.

"We're increasing our compensation as well, and we're supporting our employees and reducing the risk of burnout, which is something that the profession has had to deal with over the years," said Tucker, adding that KPMG's starting salaries have increased at nearly double the rate of inflation over the past three years.

Barriers to entry

By 2015, all state accounting boards were requiring that accountants have 150 hours of college credits to take the CPA exam, instead of the typical 120 needed for a bachelor’s degree. 

In New York State, the 150-hour requirement typically is met by completing an accounting degree after five years of undergraduate studies or having a combination of a bachelor’s degree in accounting and one year of study for a master’s degree.

The requirement was intended to improve students’ critical-thinking skills but, not only has it not proved to be beneficial, it also is an expensive barrier to entry into the accounting field, according to critics.

There’s a certain segment of the population that "can barely afford, with financial aid and scholarships, a four-year degree," said certified public accountant Anthony Basile, who founded Anthony Basile CPA, P.C. in Woodbury in 1985. That takes a certain segment of the population out of the running to become an accountant, he added.

KPMG was the first Big Four firm to publicly advocate for alternative pathways to CPA licensure, the firm said.

“While the shortage isn’t yet an issue for the country’s largest firms like KPMG, it’s starting to impact our economy and capital markets. ... We need to remove hurdles to becoming a CPA while preserving quality," Tucker said.

Some states have passed legislation offering additional pathways to CPA licensure.

Earlier this year, the Ohio, Virginia and Utah legislatures voted to add an additional route to CPA licensure by requiring only a bachelor’s degree, two years of work experience and a passing the CPA exam.

The New York State Senate proposed similar legislation March 26.

Some CPA firms are snapping up accountants who were recently laid off from the Internal Revenue Service in the federal government’s controversial cost-cutting moves.

Grassi, an accounting and auditing firm with offices in Jericho and Manhattan, recently hired five people within two weeks after they were laid off from the IRS, said Jeff Agranoff, head of the firm’s human resources advisory practice.

“We move quick," he said, adding "Not all of them are perfect fits for public accounting. But some of them are."

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.