CPA accounting firms are gradually shifting away from local hiring because of a shortage of skilled workers and an increase in costs. According to industry data, almost 60% of accounting firms have difficulty finding specialized positions locally, particularly in the busy season.
On the other hand, remote and offshore options enable the firms to stay productive and satisfy the needs of the clients even without increasing their staff internally.
Why Local Hiring Doesn't Work Anymore for CPA Accounting Firms
Here are some challenges of local hiring for US CPA firms:
1. Limited Talent Pool
When CPA accounting firms limit their hiring to local candidates, they are basically drawing from a small talent pool. As they rely on local professionals, it will be hard to find top-notch accountants who have deep specialized knowledge in accounting. In fact, many areas have very few accountants who are experienced enough to meet the needs, and the situation usually worsens during the peak peak seasons.
Due to this, the recruitment process definitely gets delayed, the existing staff is under great pressure to handle increased workloads, and the overall performance capacity of the firm, i.e., the level at which it can scale its operations efficiently is drastically reduced.
2. Rising Recruitment and Salary Costs
It is common for local hires to be very costly in terms of recruitment expenses or competitive salary benchmarks, perks, and training expenses. Hence, CPA accounting firms are required to make a considerable allocation of their resources in terms of money, time, and effort for the attraction and retention of talented professionals.
A firm's profitability may be compromised if the labor costs keep going up, particularly in the case of firms that deal with small and medium-sized clients. Such costs and expenses would deter the firms from maintaining the highest levels of operational efficiency and stable finances.
3. Seasonal Workload Challenges
Accounting workload has a tendency to change at totally different points of the year. Local hiring makes employee expenditures fixed, even if the business is running at a low level.
CPA (Certified Public Accountant) firms dealing with accounting may get in trouble with the demand for work, sometimes their employees will not be busy during off-seasons, while sometimes there won't be enough employees during busy seasons to maintain productivity and have operational flexibility.
4. Slower Scalability and Business Growth
Local recruitment processes normally take a few months, the whole cycle including hiring, onboarding, and training. This makes a delay in the growth opportunity of embracing an expansion for CPA accounting firms.
When a firm's customer base increases, it can be a problem for the company to have the appropriate staff on hand quickly who have the right skill set. A slow hiring process may result in limited growth, a reduction of service capacity, and the inability of the firm to accept new clients.
5. Limited Access to Advanced Skill Sets
Accounts heading for the future comprises skills of automation tools, cloud accounting systems, and updated compliance regulations. Local hires may not always break through to technical experts possessing the specialized skills.
CPA accounting firms may find it very difficult to always keep up with the latest changes in industry standards, which may have an impact on service quality and efficiency of the firm.
How Can CPA Firms Expand Capacity Without Local Hiring?
Here are some ways CPA accounting firms can increase capacity without local hiring:
1. Leveraging Global Talent Access
CPA accounting firms can increase their operational capacity through the acquisition of skilled professionals from overseas talent markets. Instead of relying solely on local recruitment, firms can hire remote accounting specialists who have diverse expertise.
This strategy allows the firms to handle the ever-increasing client demands, reduce turnaround times, and keep delivering high-quality services without experiencing the problem of a shortage of local talent.
2. Using Outsourced Accounting Services for Flexible Scaling
Through Outsourced Accounting Services, firms can extend or downsize their workforce in accordance with the demand of the seasonal work. Such turnaround flexibility could be the main factor resulting in the smooth running of the peak season as well as the financial reporting in spite of the deadline pressure.
The outsourcing partners supply the employees who are equipped with the necessary skills and knowledge, those who are capable of quickly adapting to the team and can help the company to complete the task without sacrificing either productivity or accuracy.
3. Partnering With the Best Outsourced Accounting Services Providers
By cooperating with the leading outsourced accounting services providers, firms have the advantage of accessing not only locally seasoned professionals but also leveraging the structured processes and advanced technologies of the providers' environment. These providers maintain a set of standardized quality control measures that result in the enhanced accuracy and efficiency of the reports.
Accounting firms can nowadays render their services to and accommodate more clients through such outsourcing agreements, thus, they get to have a client portfolio that is significantly larger without having to worry about investing a heavy amount into procurement, staff training, or infrastructural development.
4. Choosing to Hire an Accountant by Remote Staffing Models
There is a vast pool of talent outside the local area. Therefore, a firm can work with remote providers to hire an accountant. Remote hiring is a great way for a company to bring in the right talent quickly and to cut down on training time.
It is a win-win for everyone: with this approach, a firm can handle more clients, work more efficiently, and maintain the quality of services, all while controlling recruitment costs and increasing the ability to scale operations.
5. Utilizing Technology Adoption
During year-end reporting, a CPA firm that quickly expanded its client base but struggled with a lot of delayed reconciliations and data entry errors. The CPA firm was able to work more effectively by outsourcing the accounting functions, leveraging better cloud accounting software, and using automated reconciliation tools.
The internal team was able to focus on the financial review and on consulting with the clients, thus they met the deadlines, increased the accuracy, and handled the growing clients' workload efficiently.
Red Flags to Watch Out for When Outsourcing for CPA Firms
Here are some red flags to watch out when hiring outsourced accounting services:
Limited Industry Knowledge
Outsourcing accounting companies without deep CPA or accounting industry knowledge can have a hard time with compliance and financial reporting. Teams that have no experience in this area will most certainly raise the level of errors, cause delays, and affect the quality of data.
Before getting into a partnership, firms should always check the provider's accounting expertise, certifications, and client records.
Insufficient Data Security Measures
Financial data is very sensitive; thus, security and confidentiality measures have to be of a top-notch level. If an outsourcing partner doesn't use secure systems, have encrypted communication, or their data protection policy is not proper, the risk of a data breach rises.
CPA firms have to make sure that providers implement strong cyber security measures and that they adhere to recognized data security standards.
Communication and Time Zone Issues
Poor communication can result in people not understanding each other, going past deadlines, and submitting a lot of incorrect reports. Partners for outsourcing who do not have clear communication protocols or well-structured reporting methods will cause more disruption in the workflow.
CPA firms need to ensure that they have agreed-upon response time commitments, collaboration tools, and better availability schedules to keep communication more smooth and reliable.
No Clear Quality Control Process
If an outsourcing provider does not have structured review and quality control procedures in place, they may deliver financial work that is very inconsistent. Without the proper checks, mistakes, issues with compliance, and the need for redoing the work can result.
CPA firms should work with providers who implement better multi-level review systems and better standardized workflows to ensure the accuracy and dependability of reporting.
Expanding capacity without local hiring can be a great solution for CPA firms to tackle the issue of talented professionals, cut down on recruitment expenses, and keep the business at a flexible level.
By implementing scalable staffing solutions, utilizing remote professionals, and adopting technology-driven workflows, firms are able to manage an increasing volume of client work in a very efficient manner.
