More than 300,000 U.S. accountants and auditors have left their jobs in the past two years, a 17% decline, and the dwindling number of college students coming into the field can’t fill the gap.
The exodus is driven by deeper workplace shifts than baby-boomer retirements. Young professionals in the 25- to 34-year-old range and midcareer professionals between the ages of 45 and 54 also departed in high numbers starting in 2019, according to the Bureau of Labor Statistics. Recruiters who have been luring experienced accountants into new roles say they are often moving into jobs in finance and technology.
The huge gap between companies that need accountants and trained professionals has led to salary bumps and more temporary workers joining the sector. Still, neither development will fix the fundamental talent pipeline problem: Many college students don’t want to work in accounting. Even those who majored in it.
An economist will tell you it’s a hot labor market: A record number of people quit their jobs in September, and the U.S. is seeing record job openings as the economy chugs back to life from the coronavirus pandemic. The pandemic drove millions of workers into early retirement — and experts say they could be key to reviving the economy.
The number of people who retired rose much faster than the typical pace during the pandemic. More than 3 million additional people retired compared with normal, a Federal Reserve Bank of Saint Louis analysis found. Meanwhile, the economy is still down nearly 4 million jobs from before COVID-19.
“40% of the older workers that were pushed out of the labor market because they were unemployed, they were laid off, they were fired during the pandemic, 40% of them were permanent job losers and most of them said OK, I’m not just a discouraged worker, I’m not a long-term unemployed, I’m going to tell the [Labor Department] survey I’m retired,'” said Teresa Ghilarducci, labor economist and professor at The New School.
But even if retirees return to work at the average pre-pandemic pace, it will take more than two years to bounce back from the recent surge in retirements, the Federal Reserve Bank of Kansas found.
Last month, employment among workers 55 and older increased while unemployment dropped slightly. Older workers are typically more likely to face long-term unemployment than younger workers. While long-term unemployment among older workers changed little last month, it has declined in recent months. Older Americans coming out of retirement might not be returning to the same landscape.
Increasing the full retirement age for Social Security decreased the early retirement rate by about 30% for men and 20% for women, according to the paper published in January. The paper, “The Effect of Early Claiming Benefit Reduction on Retirement Rates,” was written by Damir Cosic, senior research associate, and C. Eugene Steuerle, fellow and the Richard B. Fisher chair, at the Urban Institute. They used data from the Current Population Survey to compare the effect of FRA reforms on early retirement rates.