What makes it so hard to hire a nonprofit accountant?
If you’ve tried to hire a nonprofit accountant lately, how did it compare to pre-pandemic hiring?
My observation: nonprofits find it so hard to hire an accountant these days that it even inspired me to update the lyrics to the Peter, Paul, and Mary classic “Where Have All the Flowers Gone?”
Aging Workforce: The Retirement Conundrum
The ongoing retirement of experienced accounting professionals drives a significant part of the shortage. As of 2019, 75% of all accountants had reached retirement age.
The pandemic motivated many of them to call it quits, accelerating a troubling trend.
This alone would create a significant challenge for nonprofits in finding suitable replacements.
General Attrition
Accounting has an astonishingly high attrition rate right now. Over the past two years, approximately 17% of all accountants left the field.
Note: they didn’t just leave their employers, they left the profession of accounting altogether!
We can attribute this to factors such as work-related stress, burnout, and the allure of more attractive career options, causing nonprofits to struggle in retaining their accounting staff.
Insufficient New Accountants
Despite increasing demand, the number of graduates pursuing accounting degrees or certifications fails to keep up. The limited influx of new accountants into the workforce widens the gap in the availability of skilled accounting personnel, making it increasingly challenging for nonprofits to recruit fresh talent to fill positions vacated by retirees.
High Stress and Low Pay: A Turnoff for Aspiring Accountants
Accounting often involves high stress and long working hours, particularly during peak periods like audit and year-end closing.
Additionally, many accounting positions offer relatively low pay compared to other professions that require similar (or even less) education and expertise. Compounding the situation further: many nonprofits pay well under market rates.
Consequently, individuals willing to work in high-stress environments often opt for careers that provide better compensation, further aggravating the accountant shortage.
Lack of Diversity in the Accounting Profession
The profession faces a significant challenge in attracting students from diverse backgrounds to major in accounting.
85% of CPAs identify as white, which makes it harder for students of color to find mentors and role models with whom they share lived experience.
Many nonprofits value diversity, but very small numbers of racially diverse accountants makes it difficult for them to even create a diverse pool of applicants for accounting positions.
Conclusion
The accountant shortage presents a significant challenge for nonprofits seeking to maintain their financial stability and accountability while delivering essential services.
The combination of an aging workforce, insufficient new entrants, attrition rates, high stress, and limited diversity all contribute to this pressing issue.
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