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Accountancy has always been a demanding industry, but accountant’s burnout has been a significant problem in recent years. Remote and excessive working and mundane responsibilities are feeding into the crisis of burnout. In a 2022 survey by FloQast and the University of Georgia, 99% of professionals in the accounting industry reported that they have experienced burnout. 50% of them experienced moderate levels of burnout, while a quarter felt high or medium-high levels.
The extent of burnout among accountants may affect critical accounting processes. A new survey revealed that 85% of accountants had to reopen their books at least once to fix errors, and three or more times for nearly half of the respondents. The heightened level of burnout is also leading to accounting professionals leaving their jobs.
Turnover intention refers to employees leaving their company. The employees who can no longer deal with the work expectation and feel extreme stress have reached the breaking point and suffer from burnout, which can change their behaviours and perspectives in terms of working. In the last ten years, the turnover rate of accountants had reached its peak and the pandemic exacerbated the issue. The demand for accounting services is steadily increasing, creating an overwhelmed workforce, and it is a growing challenge for firms to hold onto staff to manage it all.
Over recent years, the phrase ‘work-life balance’ has obviously become a key. A healthy work-life balance is important for improving productivity and its performance among workers. Working in accountancy is not easy and does not always lend itself to an equal work-life balance. Dext, a cloud pre-accounting platform, revealed that over a third of respondents who considered leaving their profession have faced challenges with maintaining a work-life balance. A predominant factor which destroys accountants’ work-life balance is their working environment which encourages overworking. Overworking is common in the accounting profession as not only heightened client expectations but rapid legislation changes constantly put pressure on accountants to deliver high-quality work. In this context, various authors have emphasised the accountants’ dissatisfaction and psychophysical effects as a result of exhaustion due to long working hours and heavy workload. According to data from CV Library, nearly half of accountants (45.7%) worked more than 13 extra days per year, while two-thirds said they worked more hours than required hours under their contract. Especially, deadlines at the end of the month exacerbate overtime. CV Library managing director Lee Biggins said “Being overworked can lead to burnout, as well as having many other negative implications for the wellbeing of workers.”
In addition, most of them feel that they are not properly compensated for their hard work as the firm often pays to attract talent rather than retain. Hays senior regional manager Susan Drew said that in the accounting industry overtime is common and that the most non-award accountants are not compensated for overtime worked. More specifically, less than 25% of employers in professional services said that non-award employees in their company who put in extra hours get compensated. In the accounting industry, there’s a grey area around what is considered a typical working week and when a professional moves into overtime. In most firms, the rules about overtime and what’s considered acceptable are ambiguous. Those overworked employees without adequate benefits often suffer from chronic stress and physical ailments, resulting in burnout.
The number of students in the US graduating with an accounting degree has declined nearly 9% to about 52,500 in 2020, from almost 57,500 in 2012, according to the Association of International Certified Professional Accountants. Trends suggest that drop in numbers will continue throughout 2021 and 2022. The industry’s gruelling hours, tedious work and ‘boring’ image has led to Accounting no longer being as popular a choice to students. Additionally, fewer students are appearing for professional accounting degree exams. The exams are challenging to say the least with little immediate rewards. Some firms have worked to combat this through sponsoring tuition but this has not managed to draw new talent.
While there is a change in attitude of younger generations towards their organisation, valuing opportunities and personal growth over loyalty, the growing feeling of being underpaid and overworked has led to even experienced accountants taking on more attractive roles in primarily Business and Finance with about 82% of workers who exited accounting this year through Sept. 1 had at least six years’ experience, up from 77% and 71% in full years 2022 and 2021 respectively, according to Live Data. These alternative careers not only offer attractive pay but creative use of their knowledge in contrast to repetitive and mundane tasks of say, Audit and Tax professions. With the Golden generation retiring, long term employees migrating and declining new talent has created a serious staff shortage in several enterprises.
Multiple US-based companies, including German biotech company Evotec, electric-air taxi manufacturer Joby Aviation, and auto parts supplier Advance Auto Parts, have disclosed efforts to rectify material errors that were caused, at least in part, by a shortage of accounting staff. Advance Auto Parts said that they were not able to attract and retain qualified professionals to fulfil internal control obligations. While Joby Aviation indicated a shortage of professional accountants with specialised knowledge to tackle complex issues in a timely manner. These brands are more well-known than the often smaller businesses that in the past would have had difficulties drawing in accounting professionals. Furthermore these larger enterprises often have to adhere to increasingly stricter regulatory and disclosure requirements adding to the workload of the dwindling staff. Raleigh, a North Carolina based company reportedly will not file its 10th quarterly reports as they need more time to address and rectify deficiency in controls. According to a review of filings by research firm Bedrock AI, nearly 600 U.S.-listed companies out of a total of 7,359 reported material weaknesses related to personnel this year through June, typically in accounting or information technology. This is down 5.2% from the prior-year period but up 40.6% from the 2019 period.
According to a 2020 Grant Thornton survey of CFOs, over 90% of financial functions should be fully automated in five years. The most automated function is accounts payable, with 61% of respondents presently using it and 96% of them anticipate having that fully implemented in five years. By taking over bookkeeping, the majority of tax computation, basic financial analysis and other functions, automation also reduces the need for lower level accounting staff. This requires accountants to upskill to stay relevant with the changing technological landscape. However, Artificial Intelligence is popularly predicted to act as a mere assistant rather than a replacement to Accountants assuming repetitive and mundane tasks and thereby reducing burnouts. Nonetheless, this automation may be too late for those who are already preparing to leave.
While some are optimistic that a forecasted recession will result in students opting for more stable and secure careers such as one in Accounting. Some firms including KPMG are looking into ways to reduce overtime and workload during peak seasons. According to KPMG, most entry-level employees in the audit, tax, and advisory services sectors will make between 5% and 15% more in 2023 than those who graduated and started in 2022, but compensation varies by market and role. This year most KPMG employees have received three successive pay rises. Chief Executive Paul Knopp also spent several days promoting the company and meeting with students on college campuses, including the University of Texas at Austin and the University of Illinois. He said the industry has not done enough to educate students about the career scope in accounting.
Professional organisations such as Association of Chartered Certified Accountants (ACCA) and American Institute of Certified Public Accountants (AICPA) offer resources and support systems to their members. They provide online resources and organise webinars and workshops on stress management, work-life balance and mental health. Professionals should also seek to engage with peer support groups and mental health professionals to better manage their burnout in a more personalised manner. These organisations go beyond the conventional role of fostering professional development; they prioritise the holistic well-being of their members. By providing a comprehensive range of resources and support systems, these organisations actively contribute to creating a resilient and thriving professional community.
Aside from improved basic pay and a flexible work environment, firms should also offer incentives such as profit sharing, bonuses or other monetary rewards and provide ways for employees to explore career opportunities and personal development through challenging work assignments, for which they must be adequately compensated. Embracing technology and automation will allow Accountants to focus on more complex tasks. Along with training employees to upscale and educating them about the benefits of technology will aid in a smooth integration of further automation and decrease the chances of a burnout. Some Accountants have also reported feeling like crunching numbers does not make a difference in society or their lives. Firms need to foster a sense of purpose by assigning more meaningful tasks, involving employees in more direct corporate social responsibility and allowing adequate client interaction to actualise their fulfilment. To recapitulate, the Industry as a whole needs to shift from a culture of overtime, low remunerations, mundane tasks to more balanced, rewarding and impactful work to retain and develop Accounting talent.
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