Investment accounting is booming, but where do you find talent to keep up with growth

The investment accounting and technology industry is one of the most rapidly evolving spaces within the accounting world today.

From the current market challenges and diversity in investment vehicles to the ever-growing web of regulatory and compliance requirements, automation, reporting and diligent servicing have become a priority for those organizations with large asset portfolios to manage. That said, despite all the opportunity that surrounds this space, a significant challenge stands in the way of the industry achieving its immense potential: the talent pipeline.

Stark problems face the accounting talent pipeline today and are punctuated by waves of retiring professionals. According to the AICPA, combined enrollment in undergraduate and graduate accounting majors dropped by over 10% in the year 2020. Moreover, only 58% of accounting programs believed that enrollment rates would stay the same or improve for the 2021-2022 academic year. This is in addition to serious employee retention challenges. For example, 82% of public companies and 70% of private companies say they had significant accountant retention issues in 2022, according to Deloitte. 

For the reasons cited above, the role of the accountant is getting more challenging. These days it’s not enough to know how to reconcile a buy with sell in a private equity. The challenge extends into how to account for private equity, mortgages, non-traditional physical assets like jets and the ever-complex derivative accounting.

These factors combined with the need for technology know-how to manage the above have created both a fierce talent race, as well as a significant barrier to the future success of both traditional accounting and emerging industry fields alike. This is particularly true in the investment accounting space, where the pool of talent with both the necessary subject matter expertise and technology skills is even more narrow. Combine all of this with the current volatility of the world economy, and it doesn’t make the tasks of recruiting teams easy.

But this current state of affairs doesn’t mean the space needs to throw its hands up. Instead, now is the time for the investment accounting and supporting technology spaces to take a step back, rethink their people strategies, and reverse the talent crunch they are facing.

Here are a few key considerations that investment accounting businesses need to focus on to achieve these goals. 

Prioritize and improve graduate induction

Investment accounting is composed of many interconnected disciplines. To meet these needs, investment accounting teams spend hours looking for the perfect subject matter experts to plug into their organizations. But with the pool of ready-made talent on the market so shallow and expensive, the constant hamster wheel of chasing a handful of established unicorn professionals just isn’t sustainable for business growth. That said, it is time for investment accounting firms to change tack and look to build their ranks internally through creating formalized programs that nurture and mold junior recruits instead of trying to fill ranks with only a handful of seasoned professionals. 

The benefits of this kind of approach are multifold. First, it makes your organization much more attractive in the eyes of new accounting graduates. By offering them an opportunity to grow in a meaningful, deliberate and patient way, this approach alleviates many of the stressors that come with being a newbie to the accounting world. In addition, it creates a deeper and symbiotic relationship between organizations and recruits. For example, because investment accounting is so diverse, recruits can grow in accordance with their own professional interests, and organizations can develop recruits in their own methodology and processes as soon as they enter the investment accounting world.

This kind of approach allows organizations to fill their ranks with promising new recruits early, versus having to try to pry away expensive talent that may still require extensive training down the road.

Underlining organizational stability

Challenging economic times present numerous barriers to recruitment efforts — chief among them is the fact that talent becomes more reluctant to leave their established positions for new opportunities. But there is a way to counter this: offer stability.

Certainty during unpredictable times is a huge draw. So, if prospects are approached by a company that is outspoken about its current successes, their ears will naturally perk up. But efforts to underline stability should not simply end there. Investment accounting businesses need to showcase that their organization as a whole is well supported.

This means highlighting things such as retention and promotion rates, compensation transparency, structured growth plans and other factors that are routinely on the periphery of recruitment efforts. This comprehensive approach can differentiate investment accounting businesses, regardless of the economic environment the world finds itself in, showing new recruits that a solid foundation is a foremost priority. 

Shift the accounting narrative

The entire accounting space has a major image problem. The accounting space of today is a far cry from the stuffy 1980s office culture that is still the dominant picture in the minds of undergrads today. Modern accounting is much more than tax returns and calculators. It’s a burgeoning field that offers an unmatched mix of opportunities ranging from client facing roles to technology to regulatory reporting. Moreover, the workforce within the industry is becoming increasingly diverse as well, with women holding nearly 40% of partnership positions at CPA firms, according to the AICPA. Yet, very little is being done to speak about the shifts that have occurred in the accounting industry over the last several decades. 

It’s true that competition is fierce within the entire accounting industry. But the fact that the entire industry is losing out on top talent to other business and STEM categories presents a much greater threat to the accounting world than internal competition. Offering competitive pay and culture benefits are, of course, important to remaining an attractive place to work. However, recruitment issues are only going to become more dire if the accounting profession doesn’t find ways to correct the outdated notions of what it means to be an accountant today.

Modern accounting, which sits at the nexus of so many business functions and decisions, can now leverage data for good to better invest in ESG-friendly companies, drive greater yield and so much more. Therefore, the sooner the accounting profession can shed its 1980s veneer and take a more progressive position that leans into what the industry actually is today, and the cutting-edge professional opportunities it offers, the better.  

Recruitment challenges in accounting are not a new thing, but that doesn’t mean they are unsolvable. By embracing out-of-the-box thinking and taking a more forward-thinking and collaborative stance, the industry can right the ship and begin refilling its talent pipeline at a steadier pace.