CPAs Thriving Even in Today’s Shaky Economy
Job market and practice development prospects remain promising for accountants.
April 7, 2008
by Sukanya Mitra
Uncertainty, exacerbated by a bleak economy, seems to be the talk of the town at every nook and cranny of the country. But you still hope that perhaps it will get better, or that perhaps your niche industry can fight the wrath and fare better than others. With Federal Reserve Bank Chairman Ben Bernanke announcing last week that he expects macro-economic growth to remain sluggish through summer, it makes one wonder how worried should we be?
“Overall, the near-term economic outlook has weakened relative to the projections released by the Federal Open Market Committee (FOMC) at the end of January, it now appears likely that real gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly,” said Bernanke at the April 2nd Joint Economic Committee meeting. “Growth is expected to proceed at or a little above its sustainable pace in 2009, … albeit at low levels,” he added.
In the immediate future, what does this mean for the accounting and finance industries? Does it spell doomsday for the graduating class of 2008 or for practitioners hoping to expand their practices?
“In the short run, business owners typically will seek out more tax, financial and accounting advice in order to most effectively react to the deteriorating economic conditions,” remarked Blake Christian, Partner with Long Beach, Calif-based Holthouse Carlin & Van Trigt LLP and a frequent contributor to the AICPA Corporate Taxation Insider e-newsletter. “CPAs can add value to their clients during these times by proactively identifying potential credit renewal issues, and preparing or reviewing client’s financial projections -- with more focus on the balance sheet, since lenders are moving away from ‘cash flow’-based financing and looking more to the borrower’s balance sheet and equity position,” he added.
Like many CPAs we reached out to, Christian does not see a “negative impact for the current calendar year.” Andy Bose, a Kew Gardens, NY-based sole practitioner concurs, “bleak economy or not, businesses always need accountants.” To further emphasize this point, Bose pointed out when “economy shrinks, more laid-off employees start their own businesses, and that’s good for accountants in practice.”
So, perhaps all is not gloomy for practicing accountants and those already in the workforce. But, how about those who are in college and are graduating in 2008? Bernanke admitted that “claims for unemployment insurance have risen … , and surveys indicate that employers have scaled back hiring plans and that jobseekers are experiencing greater difficulties finding work.”
Not so, at least in the accounting and financial industries. According to a recent report by Robert Half Finance & Accounting, a leading financial recruitment firm, CFOs expect to continue hiring at a moderate pace during the second quarter of 2008. The Robert Half Financial Hiring Index, which conducted phone interviews with more than 1,400 CFOs nationwide, also found nearly half (41%) of hiring execs credit this increase to the “demand in business growth.”
Graduating college students and other professionals who want to switch to the accounting and financial sectors, here’s where you lend an ear. “For this year’s accounting and business graduates, find industries that are still growing, post your résumé to an appropriate career site as 80 percent of companies search résumé databases prior to advertising a job, use your alumni network and stay optimistic,” advised Tom Silver, SVP, Marketing and Customer Service, JobsintheMoney.com.
Regarding the economy in general, Kenneth LaBahn, Corporate Recruiter for Illinois-based Wolters Kluwer, NA, speculated, “In my opinion, this mild recession seems to be headed for what economists refer to as a ‘shallow landing’ and will not have the devastating impact on jobs that the doomsayers have predicted.”
“GPA and communication skills will be key factors in landing a job in this soft economy,” said LaBahn. “They should also take elective courses in writing, business communications and public speaking to gain an edge over the competition,” he added.
Paul McDonald, Executive Director at Robert Half Management Resources, also strongly suggested that new graduates not place too much emphasis on salary. “Don’t focus solely on salary. In some instances, it can be advantageous to take a somewhat lower-paying job at a company with an otherwise excellent learning environment,” McDonald said. He also highly recommended “considering temporary or project work as it offers exposure to a variety of opportunities and potential contacts and frequently leads to full-time employment.”
Christian warns CPA firms against “cutting back on new hires when the economy slows” because eventually these same firms end up with a loss of experienced professionals a few years down the line. “Today, the conventional wisdom is: keep the pipeline filled with good, solid staff and we will find work for them,” he quipped.
All in all both sides of the fence agree that while all is not peachy, neither practitioners nor soon-to-be practitioners need worry about the current state of affairs. “The job hunt may take longer this year, but there are rewarding jobs to be found,” points out Silver.
So whether you are a practitioner or eagerly awaiting graduation, be positive, keep your head high and expect good things even in dire times. As Bose quipped, “Accountants, like doctors and lawyers, may be a reviled breed, but not one business, big or small, can do without them!”
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Sukanya Mitra is Managing Editor of the Insider™ e-newsletter group.
Disclosure: Views expressed in this article are solely from the experts and do not necessarily reflect the views of the AICPA or the AICPA CPA Insider™.