The Accounting Podcast

Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

Jen Cryder: [00:00:05] I'll tell you a secret. And I can't believe I'm going to say this publicly, but when I was going through my college career, I interviewed with the Big Four. I didn't get an offer. And I remember thinking, oh my gosh, I'm starting out. My career as a CPA is such a failure because I'm going to a regional firm. It turned out to be the best thing that ever happened to me.

David Leary: [00:00:26] Coming to You weekly from the OnPay Recording Studio.

Blake Oliver: [00:00:32] Hello and welcome to the show. I'm Blake Oliver, CPA. And we're joined today by Jen Crider, CEO of the CPA, the Pennsylvania Institute of Certified Public Accountants, and as always, my co-host, David Leary.

David Leary: [00:00:47] Hello. Welcome, Jen, to the show.

Jen Cryder: [00:00:50] Thank you. Hi, Blake and Dave. It's so glad to be here.

Blake Oliver: [00:00:53] Really excited to be here with you. Talking about pipeline issues, questions facing the future of the accounting profession. I know that you and the society there, the institute there, have been really on top of that and and are working on ways that we can get more accountants into accounting firms and into colleges and into studying it in high school. So eager to hear your thoughts on that.

David Leary: [00:01:19] You did a presentation was the August Town Hall Professional Issues update for the Pennsylvania Institute of CPA. Right. One of the slides really stuck out. Slide 32. It was super clean slide, almost nothing on the slide and it just said the sentence. It is not possible to replace retiring CPAs 1 to 1 with new CPAs. And I just thought that was like really a good way to capture the state of things, Like that's where we're at.

Jen Cryder: [00:01:43] It is. It truly is. Because when we look at all the inputs into the pipeline, kind of the supply side or the supply chain of our profession, you have to think about it with lots of different layers. So you've got to look at demographics, you know, high school and college enrollments, size of population, all of those things. And when you put all those pieces together, we know we know a couple of things. We know the pie is shrinking, Right? So the generations that are coming into elementary school, middle school, high school, smaller, the pie is shrinking for sure. And then when we look at college enrollments so I'm looking at it in Pennsylvania specifically, but even when you layer that against national data, college enrollments went down by double digits during the last five years. We're beginning to see that increase a little bit at this point. But so we've got a shrinking pie in terms of population size and then less people are choosing to go to college. Clearly, that's the path into our profession. And so between those two things right off the bat, there's just there's just a far smaller pool from which we're drawing from. And then you start to think about what are those factors that influence the choice of accounting major and very specifically to pursue the CPA license, which is where my focus is. And it's this really complicated, multi-level puzzle. But it is not possible to replace CPAs at a rate of 1 to 1 as they're going to retire almost every day. In my role, I talk to a firm leader or somebody in practice who more or less is saying, How can you go find me more people? And I'm beginning to shift that conversation to say, I don't think we're going to be able to ultimately go find more people.

Jen Cryder: [00:03:16] Yeah, that's the slide right there. We're not going to go find more people. The pool is just smaller. And I do think that we have to adjust to that reality and think about it in that context, because then once you think about it in that context, you can really start to think about what are some effective solutions to this problem. We know that less people are choosing to major in accounting, graduating with accounting degrees, and then most critically, that ratio of how many accounting majors choose to pursue licensure, That ratio has really fallen off in recent years. So when think about pipeline, I think about it in each of those different layers because each of those layers, you know, demographics, college licensure, each of them has a different set of issues and solutions. So glad to talk more about that. Yeah, Experience, Learn and Earn program that was introduced I think this week the press release came out. I do think that those sorts of work and learn models are a really effective way to buy down the time and the cost of the 150. I know that's something that you guys talk about all the time, so we might as well jump right into that. I think that there are ways to buy down the time and the cost and I think is an early model of that.

Blake Oliver: [00:04:28] Yeah. So you're saying. We can't replace accountants 1 to 1. It's not possible. So then I guess the the the conclusion is that we shouldn't measure ourselves versus the historical numbers. We're always going to fail in that respect.

Jen Cryder: [00:04:43] Possibly. I think I think trying to measure ourselves against history just sort of sends us down the wrong path. Because when I think about Pipeline, I really think about a long term human capital strategy, and you've got to look at the supply side and the demand side. I think what firms are going to require in terms of talent, I mean, it's already wildly different and that's going to just that pace of change is going to accelerate. So I'm a CPA. I was in a public accounting firm for 15 years in the Philly area. And when I think about the stuff that I did at the beginning of my career, like none of that exists anymore because technology has replaced all of it. And I had a fabulous experience as an intern in my firm, but I was still footing numbers and photocopying stuff, things like that. Like it's all gone. So I think that we equally have to look at how technology is changing the work of people in firms, how our firm culture is changing and what impacts do we have to make there. The impact of global workforce changing kind of compensation structures and metrics and incentives. You almost have to look at all of that together because if you're only looking at the supply side, I feel like we run the risk of sort of missing the mark as we look toward the future. Like we've got to build for what the profession needs looking forward.

Blake Oliver: [00:06:01] I agree, but I'm going to dig into one of these supply side issues because it's one of my favorite and it's the 150 hour rule, the additional 30 semester hours of education required to sit for the exam. The AICPA and Nasba have teamed up with Tulane to ease CPA licensing. That's the headline in accounting today. The story is about a partnership on a post-grad program at the Tulane School of Professional Advancement. That will combine online learning with on the job professional experience to college accounting graduates. I believe there's a similar initiative on the East Coast in New Jersey as well, something they're working on. So the idea is that students, instead of going into a master's, would join a firm as staff and then complete online courses and receive credit for courses and work experience that would get them to the 150 hours, the equivalent of the fifth year of education so they could sit for those exams. So I look at these programs and I think to myself, why? Why water it down further? Right. Why take this 30 semester hours and and make it? How can it possibly be as rigorous when you're working simultaneously as if you're sitting in a classroom? And why not just substitute the extra 30 hours for a second year of work experience like we used to have, Allow people just to go straight to work and get work experience and get licensed that way. So have 150 hours plus a year of experience, but also have 120 hours plus two years of experience and allow both pathways. And that's what Minnesota has proposed. The society in Minnesota has proposed bringing back that as an alternate alternative path. What are your thoughts on on this, Jen?

Jen Cryder: [00:07:56] Yep. So first of all, I think you're describing this model really accurately. And like you said, a lot of different firms are coming up with programs, you know, variations on that theme. So the Big Four have started. They've got, you know, a deep bench of resources. This program that was announced last week is intended to take that concept and scale it to firms of all sizes so that it really can meet the needs of the very small firms who don't have the resources of PwC, who's investing, you know, just a lot of money in their program with Saint Peter. So that's the model there. And the thought is that, you know, these courses from Tulane are just as rigorous as if you were in the classroom. We all know that learning is not necessarily tied to being in person anymore. So I do think that on the rigor point, I do think that they have that covered and contemplated. And I think that it'll be really great for the profession, for students in the marketplace to see lots of different variations on these work and learn models. Here in Pennsylvania. I'm talking with lots of different colleges and universities. Um, you know, often there have been credit for internships, co-ops, work, study, all of those things.

Jen Cryder: [00:09:04] So when we think about work and learn, it's about how do we take those pieces that have existed forever, put them together in new ways to buy down the time and the cost of the extra 30, because the research shows that it's really the time and the cost that are that are the hurdles there. So I think at least here in Pennsylvania, we'll see a lot of creative solutions. You know, for example, at the school is willing to grant six credits for internships. How can we get that to a higher number or how can you take like six internships credits? Combine that with some work study that's happening while you're in a firm, you know, working full time at the firm but still getting college credit for that. I think that that combination of working and learning is essentially an apprenticeship model, and our profession is that of apprenticeship, right? Like we all know that you do the theory in school, you really learn on the job. And so rethinking how to effectively blend the two I think is a really good thing. Your question essentially though, was why don't we allow a lot of different paths? Yeah, right. That's really where you were going.

Blake Oliver: [00:10:06] I mean, this is this seems complicated. Simple would be let them just do the apprenticeship by by working. And whenever I talk to my fellow CPAs and I say, all right, what would you prefer in a new hire? Would you like them to have an extra year of education or would you like them to come to you with an extra year of work experience? In the year of work experience trumps the education always. Nobody ever says probably right now, I imagine maybe it's a little different in the Big Four where those classes that you take in that master's program before you go work at PwC are particularly relevant to the needs of large multinational global corporations. But for most of us, most accountants don't do that. They don't go there. And so they end up collecting these 30 hours through a variety of irrelevant courses because it's easy and cheap. And an example in my case is, you know, I took community college courses, I took Intro to Philosophy to satisfy my 150, made me a better person. But I don't know if it made me a better CPA. Yeah.

Jen Cryder: [00:11:13] You know, on the point of these work and learn models, the intention is to put really high quality content in there. And at least in that experience, Learn and Earn program the schools that are going to put content in. You know, Tulane's the first one and this pilot, but they intend to add other schools to it. They're committing as part of that pilot to bring the price point, the price point of the credit hour down to, I think, $150 a credit hour, which is the average cost of a community college credit. So a really significant buy down in cost, making it much more cost effective for the student and the firm if they if they choose to support it. But let's get to your to your real question of like, why don't we just change the law? So the first thing to understand is it would require a law change in every jurisdiction. So it is not me as a state society just deciding or making up my mind. It's not the it's not even naspa or the state boards. Every single state would have to change their law. And so when we went to 150, it took 30 years to do that.

Jen Cryder: [00:12:14] I don't think we have 30 years to solve this problem. We've got to find other solutions that get us there much, much quicker. So essentially that is the answer. It would take far too long and it would open up way too much risk to change all those laws. So that's why I look at things like work and learn, because I'm really interested in finding very practical solutions because I don't disagree with you like I'm a CPA. I lived this. I know I got really great stuff from a great accounting education, and then I got really great stuff from my on the job, you know, learning we don't have 30 years to figure out how to make that happen in the state law. So how do we like quickly and within the laws it's written right now, get to better, more creative solutions that gets. The right talent into the profession quickly. Yeah, that's the really quick version. We could dig a lot into the concepts of mobility and substantial equivalency and all the stuff behind it, but essentially it is a very time consuming and very risky process to open up every state statute.

Blake Oliver: [00:13:12] Well, so I do wonder about that because that is the number one objection to changing this that is brought up in. And they always mention mobility was so hard to get and we will struggle to maintain that or it will go away. And of course, if you're a large firm, mobility is very valuable. It would be incredibly difficult if you didn't have mobility to audit these companies that are all over. But we already have reciprocity with other countries where we say, if you're a CPA in Australia and you come here to the United States, we'll have reciprocity and they only require three years of education there and we let them become CPAs here. So we have this perverse situation where if you're licensed abroad, you can be a CPA here with less education than we require for our own CPAs. And we've also got all these states with slightly different requirements and somehow we've managed to create reciprocity there too. Like they're not identical. So it's not they're not.

Jen Cryder: [00:14:13] They're substantially right.

Blake Oliver: [00:14:15] So so that's the I love this. Now, now, now my inner CPA is coming out because I want to define substantial. Right. All right. What's what is what is substantially equivalent.

Jen Cryder: [00:14:26] Right.

Blake Oliver: [00:14:27] Right. I feel like Nasba has far more discretion in determining what is substantially equivalent. And actually, they have complete discretion when it comes to the states that have deferred on this decision to nasba. Right. There's like in the law, there are states that say as long as Nasba calls it substantially equivalent, it's substantially equivalent. That's true. So so it's really Ken Bishop at the at Nasba who can decide this if he wants to, he could do it or the board could vote and do it. I just don't believe that it's as complicated as passing a law in every single state, at least for a lot of states.

David Leary: [00:15:05] Well, look how fast the states acted for COVID like nurses used to have to be licensed in each state and they just in two seconds just fixed it now. And now I don't think it's gone back. Right. Like nurses can just bounce around anywhere. And if you're good enough to be a nurse in New Jersey, you're good enough to be a nurse in Arizona. Right? So obviously, legislatures can move fast. They could do this in one session. But but the support is not there by the bodies. Who's going to prompt the legislatures to make change?

Jen Cryder: [00:15:35] Well, here's where I think we should look, because I don't think you're wrong in asking the question. Right. Who owns the definition of substantial equivalency and how can we redefine it? I actually agree with you that we need to ask that question, because I think I think that there is it's a little bit unclear. Right. And so I think where there is a little bit of room we should just like with work and learn and these other things pursue every avenue that's going to get us to a quick and productive solution. And I think that looking at the definition of substantial equivalency is absolutely on that list. We absolutely should look at it because the profession needs it. We can't wait around. I don't think it is as simple as you're saying. And I get that you're being a little bit you know, you're you're probably making a little bit of a joke there. I don't think it's as simple as you're saying. You know, Ken Bishop just can decide and change it because it's it's really every state board of accountancy that owns that. Right. And you're right, some of them in their regulations defer to naspa. But it's only, I think, 15 or 20 states that do.

Jen Cryder: [00:16:44] So there's still a lot of state boards of accountancy that we have to get on board. So it is not a snap your fingers by one person sort of thing. There's definitely more time and complexity to that. But that being said, we should absolutely look at what's really substantially equivalent and really what serves our profession today. Right? Because those definitions of substantial equivalency were written at a certain point in time. And, you know, I think an interesting question is how do we make sure that that's a living thing as our profession is changing? Because whatever we come up with today is the right answer, might not be the right answer tomorrow. So it's definitely something we should look at. I mean, I talk to CPAs, you know, that's that's what I do. I talk to CPAs all across Pennsylvania. And most of the CPAs I'm talking to in Pennsylvania are not Big Four. They are regional firms. They are small firms. That's most of the time. That's who we're supporting. And this talent issue is real for them. Yes, they they can't fill their engagement teams. They can't serve their clients.

Blake Oliver: [00:17:46] And that's why this is that's that's where I'm seeing this as a big issue, is it's not the big firms. The big four are still able to fill their classes, their training classes and get people in the door because everybody wants a big four firm on their resume. That's still a really valuable thing as a young CPA. But the small firms. They're the ones who are feeling this shortage. And we've got the typical small firm owner is 60 years old or older now, and they want to retire in ten years. And the young blood is not coming into the firm that's going to take over. And so firm valuations are dropping. You know, the idea of being able to sell your firm becomes more of a problem. And also just delivering quality work to your clients becomes an issue. You know, we saw we've seen coverage from the Pcob issued a press release saying that 40% of audits in 2022 were deficient according to their methodology. And these are part one A deficiencies. So the the bad kind of deficiency, that means that the auditor shouldn't have issued the opinion 40%. And I wonder, are these things connected? Is this talent shortage connected to this problem of deficient audits?

Jen Cryder: [00:19:08] Yeah. And in that op ed, she even said, if you know, if you want to blame it on pipeline challenges like, you know, go figure it out. Um.

Blake Oliver: [00:19:17] But while also offering no commentary or solution, you know on the pipeline problem. So I sort of sympathize. I sympathize with the firms that are getting the auditors who are getting hammered by Pcob, but Pcob is not offering any solutions.

Jen Cryder: [00:19:32] Yeah, right. I think so. We've done a lot of listening to CPAs across Pennsylvania over the last year on this issue. And in hearing all of that, talking to people in all corners of the profession, small, firm, big firm, educator, students, you know, CFOs, controllers, all of it. The most common theme that we heard come out, come out of it is our profession has this role of trust in the capital markets, right? We help families make financial decisions. We help small businesses, you know, kind of navigate their success. We support, you know, Wall Street businesses from the top to the bottom. We have to maintain that trust. And in maintaining that trust, we have to walk this really fine line of balancing rigor and capacity. Right. And so that's why this is a really complicated issue. We have to maintain the rigor of the credential because there's a public protection element of that. And, you know, our profession is has earned that and has to continue to earn that every day. But at the same time, when there's not enough capacity to get the work done, we're seeing it in Pennsylvania, especially among highly regulated industries like nonprofits. For example, when I was in public practice, I worked with a lot of nonprofit clients in the Philadelphia area because they got government money. They needed single audits. And just like a lot of complicated regulatory stuff, I'm getting a lot of calls at this point. Nonprofits that can't find auditors because of the capacity constraints and the pricing pressures like they just, you know, the fees that they would have to pay are just completely out of their reach. And that means.

Blake Oliver: [00:21:05] So they can't go get those funds that they need that require an annual audit, those grants, those big grants.

David Leary: [00:21:12] And that's what's going to drive legislative change, because these legislatures, you know, they have their own superPACs and the way they're raising their money and that has to be accounted for properly. Right. And maybe their spouse is on the board of 2 or 3 nonprofits, and then that's when they're going to be really alerted to this problem when they're at a dinner table and a family member or somebody involved in a nonprofit is like, we can't get an accountant. And that's when that's when it's going to become real. Right? I was just watching the thing with Congress and one of the Congress people played one of those voicemails on her phone to the subcommittee about Iraq. It's like when when it hits home, then they take some action, right?

Jen Cryder: [00:21:49] Yeah. And it's very real. So we have to be really thoughtful as we're balancing the rigor and the capacity issues. And I think trying to solve for one or the other in a vacuum is where we really could run into trouble. So again, for us, as we're talking to our members, it just goes back to what are those expedient practical solutions? I don't know that the profession was collaborating in a way that it needed to in the past. I can tell you I've seen that change a lot. I get to participate in a lot of different national discussions. Pennsylvania is a big state and I have seen that level of collaboration change a lot. The other thing I've seen change a lot very recently is the focus on using data to inform the discussion. So maybe it's just my brain. But when I first came into a lot of these discussions, I would ask questions around the data and and there weren't great answers. And as a CPA, I was just like, wait a minute, What? Like, don't I don't understand what's going on here. I remember really early as an auditor in my career, the partner I worked for said, you know, you can't audit something you don't understand, which, by the way, obviously meant that I did not I didn't understand what I was doing. That was his very nice way of telling me that I didn't get it. But it's the same thing here. Like, I just think until we have much better data, it's hard to solution. I have seen much better data coming out recently.

Blake Oliver: [00:23:12] Well, and that's a really good point, Jen, because when I talk to younger accountants or you look at like message boards like Reddit, you don't hear them talking about 150, to be honest, like as, as the problem that's, you know, making them dislike accounting or complain about it. It's the long hours and the low pay, right? Yeah. And and that is ultimately a business model issue, right? It's the way these firms are set up. It's how the firms are structured under the partnership model. It takes a long time to become a partner and the rewards are once you get to that level and and young people I mean, I was one of them. I was at a large top 25 firm as a manager, and I had the opportunity to go work in tech. And they offered me more money and stock options. And I compared that to what I was doing at the firm, which I loved the firm. It was a great firm and I could see that someday I could make partner. But that path was very opaque. And did I want to sit around and wait for the 5 to 10 years it was going to take? And so I took the money. You know, I took the money up front. And I feel like a lot of students are kind of making that choice, too. Are you seeing that?

Jen Cryder: [00:24:32] Oh, for sure. Absolutely. It is the smart play. You can't blame them for that. And so, once again, kind of understanding what's really going on is the only way to get to real practical, quick solutions. I think the secret of pipeline is that it is largely a business model and supply chain problem. So we were talking about, you know, the education requirement and kind of the college and university piece already. Definitely. There's a lot of work that needs to be done there. But the majority of accounting grads that are on a track are beginning their careers in firms. I think that there's a lot in terms of the business model of firms. A lot of work that we need to do there to make this a profession that people want to come into and want to stay in. So one of the big things that you were just alluding to right there is is sort of that mix of compensation incentive, you know, incentivizing that journey. What are the metrics by which the firm is run? There's so much work to do there. I don't think that that partnership model, that pyramid for many firms will be the the the model of choice going forward.

Jen Cryder: [00:25:39] We're already seeing that with private equity and some of those other elements coming into firms. A big reason that some of those firms have taken private equity money, at least from what I can see on the outside, don't you know, don't have any inside knowledge, obviously. But one of the things we're able to do is incentivize people earlier in their career with things that are equivalent to stock options. So it almost is a case of where we're so busy advising our clients that we forget to think about what we need to do to run our firms well. And I think that's why we're seeing the professionalization of firm management in a lot of cases, and not just at the largest firms, but I'm seeing that certainly in regional firms in Pennsylvania and smaller, where like let's dedicate a CEO who is not also out there serving clients, but somebody that can be thoughtful about how do we build not only a profitable business but one that is sustainable and that can attract and retain great talent and things like that, because firms have got to figure that out.

David Leary: [00:26:36] Interesting. So instead of having all the executive functions, the actual business functions of your firm being staffed by a bunch of CPAs who aren't doing CPA work, which the arguably the country needs, you hire I'm not send me emails a real CEO like and then run from there.

Jen Cryder: [00:26:56] Okay. He said it, not me.

David Leary: [00:26:59] That makes sense though. You're right. Because. Yeah, I know what it's like to wear multiple hats. Like they're not doing CPA work and we need more CPAs to do the actual CPA work.

Jen Cryder: [00:27:08] And usually a CPA that's in a firm loves serving clients, you know, So they're going to want to, you know, naturally their bias is going to be to provide great client service. So yeah, I mean, clearly the largest firms started doing that a long time ago, but I'm seeing it move down into to smaller and smaller firms recognizing it is. I mean, you guys know this. This is the world that you live in every day. It is so hard to compete as a regional or a small firm right now out there. But not only the succession issues that you were talking about before, Blake, but the cost and the investments that these firms have to make in talent and technology. It is really hard to compete and survive. So that is one way that firms are thinking about changing. Business model is kind of professionalizing that. It's no different than saying, you know, if I run a construction company, I'm going to go hire an accountant or a CPA to do my accounting work because they know how to do it better.

Blake Oliver: [00:28:04] Well, we have some good news on the starting salaries front. I guess it's good news if you're a student. Maybe not good news if you're the partner who has to cover these rising salaries. Cfo Devcom said CPA firms Facing Talent Shortage Hike Starting salaries 14%. An average of 14% and 18% of the firms. So about 1 in 5 are going to boost salaries, 21% to 40%. Now, we don't know if they're actually going to do it because that's their plan, but that's significant. If starting salaries went up for some firms 20 to 40%, that puts us in range of some of these other adjacent majors in the business schools and could also help make up for that extra cost of education. And that's what I've always hoped and suggested our leaders would do is, you know, do a spreadsheet and actually model out the extra cost versus the starting salaries. And you'll see that, I mean, it's a significant amount of money that you have to spend to be an accountant that you don't have to spend to be a I don't know what what are the other majors that people are going into? David Instead of accounting, like, well, anything in finance.

David Leary: [00:29:21] Tech Yeah, tech jumping into tech. Tech careers. Product management. Finance. Marketing management. Marketing. Yeah. They're jumping out of all those.

Blake Oliver: [00:29:28] I don't know how many accounting majors are going into marketing other than me, but.

David Leary: [00:29:31] But ultimately, this goes back to the students, right? Like we got you got to let the students know, hey, look, accountants are being paid more now, right? Like that needs to get out there. And Jen, if I'm understanding correctly, on your presentation yesterday, you kind of have some additional challenge with students because in general, Pennsylvania, enrollments are lower than college enrollments across the country, which have been declining. So it's worse for that. And then the other part of your deck, you talked there's some slide in there that talked about people's very first experience with Accounting 101 or introduction to accounting and the reactions to it. So if you'd want to I guess or maybe the better way to ask this question is when the AICPA came out with their 12 part plan. Right. And one of the things with student or younger people engagement, but they put it on the state societies. It's like it's your responsibility, gen, to talk to these students. So. So what are you doing in Pennsylvania considering the challenges you're having, you know, bringing students into the pipeline?

Jen Cryder: [00:30:23] Yeah. And the reason that they put that on state societies is because we're the boots on the ground. So like everybody has their swim lane and that's kind of our swim lane. We are on college campuses all the time and we are expanding all of that work into high schools. So the research shows that that first experience in a financial accounting class is such a difference maker when somebody is building their perception of our profession. I know you guys talk about kind of the image issue all the time. So much of that is determined in that first accounting class. And so one of the things we're thinking about right now is how do we support it's often high school teachers. You know, how do we support those high school teachers? And making that first intro to accounting class not only kind of interesting and engaging, but something that tells the story of what CPAs can do and what they can be and why. It's a really interesting career path, right? Because you guys see this and I saw it in my own career being a CPA, It took me places I never could have imagined around the world. I got to, you know, talk with CEOs and CFOs and do work that was so much more interesting than I ever, ever imagined. How do we build all of that into that intro to accounting class? Very often that's happening in high school.

Jen Cryder: [00:31:35] I think that's another way to buy down the time and the cost of the 150 because students are coming into college, they're beginning college with many more credits from high school than they used to. Certainly, you know, when I was graduating high school and going to college, I took a couple AP credits with me. But all of these dual enrollment programs and things like that. So not only are we focused on how do we get those classes into high schools, but how do we make them interesting and engaging. So here in Pennsylvania, we're actually piloting this in the fall, we're going to pilot with a small group of high school students. We have a financial accounting class that we're going to bring in to them. They're going to take it throughout the year. They will get college credit for it. And it goes on a transcript. So it, you know, begins to count toward that 150 right off the bat. Those are the sorts of things that state societies are really good at is is kind of connecting those dots locally this fall. We're also going to get, you know, hopefully many hundreds of CPAs into high school classrooms across the state to talk to hopefully thousands of high school students about why is this a really awesome career?

Blake Oliver: [00:32:40] And that goes exactly to a comment we just got in our live stream from Billy who said, I think one of the main issues with the pipeline is having bad publicity. We need thought leaders that present the positives of becoming a CPA. Yes. If you go on Reddit. Absolutely. If you go on Reddit and you look at the accounting subreddit, I would not if we put that into an AI and said, you know, analyze the sentiment of these threads, it would probably be on the very negative side. Right. Because it's a lot of people who are unhappy. And what what happens when people are unhappy is they tend to be more vocal. But we know there's a lot of happy accountants. We're very a lot of them. Yeah. Very content friends making really good money, living a great lifestyle with great job security and lots of different opportunities to do almost anything they want. And that's what brought me into the profession as a career changer, was looking at accounting and seeing just how much I could do. I could do almost anything, and it's really worked out that way. Like if I wanted to tomorrow, I could stop being a podcaster and I could go work as a controller at a startup somewhere. And you know, now my now my life has changed and I could do that. You can't do that in every profession.

David Leary: [00:34:00] And maybe that's something that could be communicated better because, you know, my daughter is now starting her senior year and there's a lot of these questions like, what do you do? And the more and more I'm stepping back and we were at the conference and just looking at the ease and like a lot of professions in college, you cap your your earnings potential with that degree. But if you get an accounting degree. You have no limit to what your what you can make or what you can do. It's never capped. It's unlimited potential.

Blake Oliver: [00:34:28] Yeah, because you can be an entrepreneur as an owner of an accounting firm or you can even just start a business because once you know the language of business. Yeah.

Jen Cryder: [00:34:37] Totally. And you know what? Like the research shows that those are the talking points that really resonate with high school students. So when I'm talking to CPAs in Pennsylvania, I give them that homework assignment. I say, please change your talking points when you talk about our profession, because the research shows that if high school students hear about the way that CPAs impact the communities around them and that this profession can give you the building blocks to be an entrepreneur and that this is a fulfilling career that has a lot of stability. Suddenly their their interest level is very, very different.

Blake Oliver: [00:35:12] And there's evidence going to data gen, which we both love, that we don't even have so much of a pipeline problem at the beginning as we do once they're in the workforce. So Illinois CPA Society did a big study on retention and found that no surprise, we lose a huge percentage of accountants in their first few years in the profession. And why does that happen? Well, they get burned out on busy season hours, and that goes back to the whole business model, especially if the Big Four. I mean, I don't think I'm going to surprise anyone to say that you got to work long hours and people get burned out. Doing that. And so how do we get these students into jobs where, you know, there's life outside of the job and it's not just grinding and grinding and grinding. And the problem is that it's not that they leave and they go to smaller firms. A lot of times they leave and they go out of the profession entirely. It's like that. That first job is so important. And I worry that, like the, you know, the people leaving the Big four don't have the same concerns that we do. I don't hear them talking about reducing hours or stress or making the job better. It just seems to be all dollar signs.

Jen Cryder: [00:36:39] I don't I don't have insight into the leaders of the Big Four, so I can't confirm or deny that point. I do get the opportunity to talk with leaders of regional firms and smaller firms across Pennsylvania, and I think that the sentiment is really changing. There's there's a variety, I would say, let's be fair. There's a variety. I think that there's a lot of firms that are still very compliance focused. I'm going to deliver a tax return. I'm going to deliver an audit, the services that are pretty commoditized. And I think that in a lot of markets in Pennsylvania, there's a lot of room for that. There's still need and demand, but I'm seeing a lot of even the smaller firms shift to more professional services, which is the kind of stuff you guys talk about all the time, right? You know, the advisory services and things like that. Regardless of which category a firm falls into, a lot of leaders are, I'm getting the question much more frequently How do I build my firm so that there's not workload compression? We're not burning people out. All of those things that you were just mentioning, I think it's great that I'm getting the questions right.

Jen Cryder: [00:37:38] It's a great place to start. They don't have answers, and I see that as as the role of organizations like Picpa to help build those answers. And it's one of the reasons why, you know, I honestly thought I would stay in public accounting forever, but it's one of the reasons why I'm so energized about my role, because I see CPAs being a force multiplier on issues like that. So, okay, we want to build a new business model for accounting firms in Pennsylvania that are small or mid-sized. There's a lot we can talk about there, right? We were talking about compensation and metrics and all of those things. We can talk about culture, we can talk about technology. We can talk about, you know, offshoring and outsourcing and kind of managing a decentralized team. But an organization like mine can kind of take all of that and put it together in terms of best practices and amplify that out. So that's a big focus of ours as well.

Blake Oliver: [00:38:29] I would love to figure out a way to get these professors in these top accounting programs to promote working at a regional firm rather than the only path is to go do what I did, which is go work Big Four. Because it's not the only path. But when you talk to students, they seem to think it's the only path because that's what their professor pushed on them. And I understand, right? It makes sense. Like that's that was their career. I'm sure that the PCC's donating a bunch of money or whatever firm is, you know connected with that school a lot. But you know they're they're bringing them in and they're burning, burning them out and there's nothing left for the profession. That's kind of, kind of feels like.

Jen Cryder: [00:39:09] I had a similar experience. Yeah. The school that I went to, you know, similar. They were super focused on Big Four and I think it's well intentioned the professors want their students to have, you know, the best start to their career, and they think that a different level of opportunity comes with that kind of start. I'll tell you a secret, and I can't believe I'm going to say this publicly, but when I was going through my college career, I interviewed with the Big four. I didn't get an offer. And I remember thinking, oh my gosh, I'm starting out. My career as a CPA is such a failure because I'm going to a regional firm. It turned out to be the best thing that ever happened to me. I started my career with this regional firm that was, I don't know, about 100 people. This firm was so connected and there was such a strong culture. Like literally they would cook us dinner every night during busy season. Like they hired someone to come in and cook us dinner and we would all sit in the lunchroom and eat dinner together. Like it was amazing.

Blake Oliver: [00:40:05] And but that's I'm so glad you shared that, Jen, because that is exactly the experience that still happening where there's this mental block we seem to think as students, if you're a high performer, oh, and you don't get that Big Four offer, you're a failure. And we even I just read a post like there's a post like that online every every week. Somebody didn't get the Big Four offer they were hoping for. And now they're like, Do I leave accounting? Am I, am I done? And that's just totally wrong. Like there's so many amazing firms that are virtual now that you can go join that are, you know, doing incredible work and very I mean, if you want a 35 hour workweek, you can get it at one of those firms. And I'm not saying if you want a 70 hour workweek, you can go get it, too. Like everybody's offering different options, whatever fits your lifestyle that you want.

David Leary: [00:40:56] And some of this just funds and money, like like a regional firm can offer dinner to their employees and take and they're taking it for their employees, just like they took care of you. Jen Right. But the Big Four can roll in with Chick fil A and pizza to a college campus, right? They do.

Blake Oliver: [00:41:13] That. They do heavy recruiting, right?

David Leary: [00:41:14] Yeah, Right. So it's like like it's the story is fine, but who's hearing the story if you're eating a slice of pizza? Yeah, that's paid for by somebody else. Yeah, it's tricky because I also think it's all part of the machine, right? The colleges use well, look at how many people joined our business school and got jobs. And if you really look at the top of the list, like 20 companies and 15 of them are accounting firms that they're pushing people into because so they use this as a way to recruit students. It's just a big machine. Yeah.

Blake Oliver: [00:41:46] Ultimately, yeah. In many ways we're focusing on the wrong metrics, right? You've got firms that are focused exclusively on top line revenue, and that's not a metric that makes for a good work life balance, job experience. And and then you've got, you know, colleges and universities that are focused on their. Uh, I don't know what you call that metric, but there how many of their students get into the top firms, Right? And they brag about that. But that's not what makes for happy people either. It's like it doesn't consider that in the equation. So it's funny that we as accountants are focusing on the wrong numbers in so many ways.

Jen Cryder: [00:42:24] You know, I do think that the the regional firms, the middle size, the smaller firms will be the ones to figure out the business model faster just because I think, you know, not only do they have. You know, they're a little more agile to make those changes. Often those sorts of things are within the control of a smaller group of people. So I think they can get there quicker. But I also think that they're more incentivized to do it because like I said a couple of minutes ago, the costs of people and technology and all of those things make it really hard to be successful in that, you know, small and mid-sized firm world. We've seen record profitability in firms for the last 3 or 4 years. I think that's going to start to get squeezed because of the data point you gave earlier, where those starting salaries have really started to jump up. Thank goodness you got to give firms credit for that. They've made substantial increases and that's not just in the first year, right? Like they have to then go and make adjustments throughout the firm. That's a huge investment that they are making.

Blake Oliver: [00:43:27] And sometimes these investments don't have to be huge. They just have to be creative. And I love this example in Accounting today, this practice profile article, it's about a firm called Mize Mize CPAs. They have found success in recruiting and retaining talent through creative strategies. At a college career fair, the firm offered Squishmallow plush toys as giveaways, which generated excitement and resulted in close to 50 to 70 resumes. David, I know having been at your house, just how much your daughter, who is nearing work age, loves Squishmallows so they're right on it.

David Leary: [00:44:04] Well, not just that. The accounting twins, the the accounting twins just graduate with their accounting degrees a year ago and they're all into those squishmallows. So yeah. This is a good marketing. Yeah. Is that how you say it?

Blake Oliver: [00:44:15] Squishmallows Squishmallow. It's like a.

David Leary: [00:44:18] Marshmallow, but it's a I don't.

Blake Oliver: [00:44:19] Know.

David Leary: [00:44:20] Yeah, yeah.

Jen Cryder: [00:44:21] No, my daughter loves them too. Yeah, that's so funny.

Blake Oliver: [00:44:24] So, you know, maybe just have some good swag at your career fair booth that these younger folks want. You know, ask your. Ask your kids what's. What's a good one? I think that's genius. The firm's also done a pet adoption event where they held a cutest pet contest and handed out branded swag. Other strategies include hosting Bring Your Dog to Work Day and providing monthly surprise gifts to employees. Yeah, I think that's a good strategy. Really differentiate yourself from that firm where you're going to have to be wearing the suit and tie. Not that there's anything wrong with that, right? If that's what you want. You want to go to New York City and you want to wear the suit and tie and walk around a skyscraper and audit Coca-Cola or whatever. Guess you'd be going to Atlanta then. But you know, either way, right? That's great. If you want that, that's great. But if you want the family more family atmosphere, there's firms that offer that. And I think you're right, Jen. We need to we need to do a better job promoting that. Mhm. That's how we keep. Yeah.

Jen Cryder: [00:45:22] And I think you got to follow through Right. Because they might have gotten a lot of resumes with the squishmallows but then you've got to back it up and actually build the firm and the culture that delivers on that.

David Leary: [00:45:31] Don't burn them out after two years. Yeah. Like say goodbye to your squishmallow because you won't see it for two more years. Like.

Blake Oliver: [00:45:37] Well, no, that's. That's what you use as your pillow at your desk.

David Leary: [00:45:41] Are you screaming.

Blake Oliver: [00:45:42] Under your desk? Yeah, it's. Yeah, exactly. When you sleep under your desk. So I have a feeling. Yeah, go ahead, David.

David Leary: [00:45:47] As you say, like, speaking of, like, image and stuff, I don't know if you saw the Valspar rebranded last week or the week, week and a half ago, and it's great. It's rebranded, right? But they made this video and the video is not worth playing because a lot of screenshots and this stock photography but the very end it ends and it says the members club for California CPAs and I just thought that's like really great branding. It makes it like this exclusive like club. And so are you guys doing any creative marketing gen to, to get to make it seem more cool and exclusive to be in the PR society?

Blake Oliver: [00:46:22] Pi CPA, Pi.

David Leary: [00:46:23] Sorry. Yeah.

Jen Cryder: [00:46:25] No, that's okay. We're actually going through rebranding right now also, so we're not quite there yet, but stay tuned. But yeah, think we do have to update our image to be reflective of the profession we're serving.

Blake Oliver: [00:46:38] Well, I think that is a great way to wrap this up, Jen. If folks would like to connect with you online, learn more about Picpa, maybe become members, where would you direct them?

Jen Cryder: [00:46:50] Yeah. So picpa.org. Or I'm on LinkedIn.

Blake Oliver: [00:46:54] All right. And we'll have a link in the show notes. David where can people track you down.

David Leary: [00:46:59] On all the socials? Just David Leary.

Blake Oliver: [00:47:02] And I am at @BlakeTOliver. Thanks again to everybody who joined us live. As a reminder, you can follow us on YouTube. You can get notified when we go live. And we love hearing your commentary. Thanks, Billy. David, Aaron, Nathan, Sean, Michael for all of your commentary. We really value it and we listen to our members, our listeners, and we hope that all of the state societies and Nasba and the AICPA will listen like Jen Crider at Picpa.

[00:47:39] Bye, everyone. Bye bye.