Is There any Silver Lining to This Disruption in Talent Models?

On The Big 4 Transparency Podcast, I recently had a conversation with the founder of a large accounting outsourcing company where he said that the way outsourcing should be viewed is as an accelerator to careers in accounting. This was obviously a very convenient framing of it for a company facilitating outsourcing, but he did make a good argument, so naturally I wanted to check: does the data support that hypothesis?

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The Argument in Favour of Outsourcing and AI

So, in the episode mentioned above, it was explained that the accounting firm talent model will need to evolve with all of the outsourcing and AI coming into the accounting space. Currently in the profession, firms are really short on Seniors, Managers and Senior Managers, but the work at the analyst and staff levels is being offshored, and in a near future might be increasingly automated away with AI tech advancing at the rate it is.

So we’ll likely increase firm capacity, thus also increasing the workload when it comes to review and client-facing work, meaning there will be an even more acute need for folks at the Senior level and up.

The solution to this would be repositioning our view of the intern, staff, and analyst level roles from a preparer of returns or audit files into an onramp and training ground to get these people ready for the review and client facing work as soon as possible.

Why is this Enticing?

If this argument pans out, then the impact would be skipping years at the staff and analyst level and moving right into senior level work much sooner. The 50th percentile base pay for a 2nd and 3rd year staff in Audit or Tax in the US is $76,800, while the 50th percentile base salary for a 1st year senior in the US for Audit and Tax is $88,100. So what’s at play here would be an $11,000 salary increase a year earlier than what would otherwise be possible.

What Does the Data Say?

So interestingly, the trend does actually support this hypothesis that we are accelerating progression in firms, but we’ve seen the shorter path impact Senior Managers more than seniors since 2023. So it’s possible that the shortening may have started several years ago, maybe more at the inception of the offshoring trend. It will certainly be something we track year-over-year to see if AI might bring a new wave of shortened career progression in public accounting.

Since launching The Big 4 Transparency Podcast nearly a year and a half ago, the biggest piece of feedback has been people wanting more video format episodes - and so we’ve undertaken a project of revamping our YouTube channel to share episodes in video format.

If you’re into podcasts, check out our recent episode with Frank Longobardi, former CEO of CohnReznick, and accounting industry titan with over 4 decades of experience in the field.