The ancient profession of bookkeeping is undergoing a quiet revolution. Many of the changes are coming from within the accounting industry, while others connect with a wider set of socioeconomics. Either way, change is quickly approaching us.
If you work in the accounting industry, employ a bookkeeper or plan to, our trends analysis will give you the information you need to understand the wider landscape, hold onto your talent in times of upheaval, and make informed decisions when hiring.
Bookkeepers in demand, or are they?
The US Department of Labor’s Bureau of Labor Statistics puts the number of bookkeepers employed in the US at around 1,730,500. The industry predicts the downward trend of -1.5%, which started in 2016, will continue until at least 2026. While this translates to around 30,000 fewer available positions in this period, there are five factors that will likely drive the demand for bookkeepers in 2023 and beyond:
- The Bureau of Labor Statistics says the average number of job openings for bookkeepers will total 188,500 between 2018 and 2028. This is 42,000 more positions than will be available for accountants and auditors. Students and career changers will continue to be attracted to the profession.
- Small businesses – those with fewer than 500 employees – will keep using the services of bookkeepers, even as large companies use software more often to automate many of their financial and accounting functions. The expense of sophisticated software programs will be out of the reach of most small businesses for the foreseeable future.
- While there may be fewer jobs available, the demand for advanced financial analysis, advisory and software skills, will likely drive-up median salaries, a lesser cost to that of many sophisticated software programs, and see bookkeepers moving into wider roles. This will go some way to negating the 30,000 bookkeeping jobs that will be shed in the next three years. An additional factor is tightening accounting regulation that will increase the focus on corporate bookkeeping and transparency.
- The availability of bookkeeping positions, and the talent to fill them, will be largely dependent on geographic location. In financial centers and larger metropolitan areas, bookkeepers continue to be in demand, and firm owners may feel the effects of the skills shortage when trying to hire. For example, while available bookkeeper positions will decline in the US in total, the Oregon Employment Department’s Occupational Employment Projections for 2020 to 2030 forecast 3.5% growth in the job market for bookkeepers.
- Baby Boomers (born between 1946 and 1964) who make up about 33% of the global talent pool, have already retired or plan to in the next 10 years. The pandemic has speeded up their exit from the workforce, with 30 million retiring in the third quarter of 2020, alone. The average bookkeeper in the US is 50 years of age which means filling positions left by retiring Baby Boomers will present a challenge for businesses and this will continue through 2023 until at least 2033.
Evolution of the traditional bookkeeping role
We expect to see in 2023, an increasing demand for bookkeepers who have certified qualifications and are registered with The American Institute of Bookkeepers. Already there is a demand for certified and experienced bookkeepers, and it will get increasingly difficult for those without these credentials to find work.
One of the main reasons for the focus on industry qualifications is that bookkeeper skills can be transferred to other positions, or a wider remit, like financial or office manager roles, or analysts. In addition, many bookkeepers run their own firms and typically use a much wider skills set.
Another important reason why the traditional bookkeeping role must evolve is the need to attract a younger generation to the profession. Millennials aged 25 to 40 place a greater emphasis on job fulfillment, opportunities for career advancement, higher pay, and a work-life balance, which is likely to see the role change significantly in the decade ahead.
The widening skills gap
According to the World Economic Forum, three-quarters of employers looking to fill positions in 2022 were unable to find the talent they needed – up 6% since last year. In 2012, the figure was 34% which means the skills shortage has doubled to 75% in the last decade.
Add to this the median age of bookkeepers: 50.2 years of age and the fact that 40% of bookkeepers in the US are 55 or older, and one of the most important items on any firm owner’s agenda will need to be advanced planning around attracting new talent to their business or reskilling existing talent to move into the bookkeeping role in future.
The retention crisis deepens
While recruiting the right people to your business remains a challenge, retaining top talent is even more so. Two interesting statistics to consider when talking about retraining top bookkeeping talent are:
- 49% of bookkeepers stay in their job for two years or less
- 81% of bookkeepers are women
There are many things firm owners can do to keep their bookkeepers from leaving, including:
- Altering your company policies and benefits to address the specific challenges faced by female employees.
- Introducing a mentorship program to overcome the roadblocks many women face in the industry.
- Closing the gender wage gap for bookkeepers – women typically earn 97¢ for every $1 earned by men.
- Rethinking capacity building programs that allow hard-working moms to advance in their careers.
Capacity building programs
Bookkeepers who keep adapting and learning have a positive future ahead of them. They’re likely to be able to spend more time on adding value to their employers and, with the right training, can contribute expert financial advice.
The ambitious bookkeeper should focus on growing their skills alongside the cloud and be encouraged to develop a deep understanding of your business and the industry. This way they will be able to find their niche and provide specialist skills to your business as the industry changes.
A Sage survey has shown that 62% of accounting professionals agree that today’s accountancy training program will not be enough to run a successful practice by 2030. This is supported by a McKinsey report suggesting that 61% of respondents believe capability-building programs only sometimes or rarely succeed in achieving “desired objectives and business impact”.
When taking into account the skills shortage and retention crises, there’s no time to waste putting time and resources into building capacity within your firm.
