Thursday, June 1, 2023

Shortage of young accountants leads BDO USA to double offshore workforce

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BDO USA is planning to double the size of its offshore workforce after a slide in the numbers of young graduates becoming accountants in the US.

The accounting firm would add thousands of jobs overseas, largely in India, according to chief executive Wayne Berson, amid a worsening talent shortage affecting the US audit and tax businesses.

BDO USA, which employs about 12,000 people, is aiming to have 5,000 people at its offshore joint venture “BDO Rise” within five years, Berson told the Financial Times.

BDO Rise already has 2,000 people in India and recently added about 100 jobs in South Africa, Berson said, with plans to grow in both countries.

“We are seeing a tremendous talent shortage in the profession,” he said. “While it would be nice to just hire domestically, you have got to be open to the notion that maybe someone else has something that you don’t have, that you can buy.”

US accounting bosses are wrestling with the question of why interest in the profession has dropped, just as they need to replace a wave of baby boomers who are retiring.

The US has never had more than 80,000 graduates with bachelor’s or master’s degrees in accounting annually. But the Bureau of Labor Statistics projects 136,400 new accountants and auditors will be needed annually over the next decade.

The Big Four accounting firms — Deloitte, PwC, EY and KPMG — have all established significant offshore presences in recent years, notably in India, to streamline their operations and provide round-the-clock service to clients. PwC US, for example, has what it calls “acceleration centres” in Malaysia, Argentina, China, India, Mexico and the Philippines. Deloitte’s US business employs almost as many people outside the US as it does inside the country.

The offshoring trend is also now being embraced by midsize and even smaller firms as the labour market for trained accountants has tightened.

US starting salaries for accountants often fail to match up to those available in finance or technology, and the profession also struggles with a reputation for being boring, which trade bodies are trying to overcome with social media campaigns and work in schools.

Berson said young people appear more interested in becoming consultants than joining the more stable, but less immediately lucrative, tax and audit professions.

“The next generation are wanting to move quickly, wanting to be excited by their job. A lot of them are looking at things like advisory services,” he said.

“I was an auditor, how about I told you about audit first? Because I think it’s always better to get your feet wet, get a foundation. You need to hone your skills before you can be a consultant to anyone.”

Berson, a native of South Africa, has been chief executive of BDO USA for 10 years, and chair of BDO International — the global network of accounting firms that share the brand — since 2014. Annual revenue for the US firm has grown from $618mn a decade ago to about $3bn, in part through acquiring smaller firms across the US, and Berson predicted $5bn in three to four years, in part by expanding the consulting side of the business.

He told the FT that he had “resisted” putting out a return-to-the-office policy in the US, but expected managers to encourage camaraderie and collaboration.

“I think the more we see people together in person, the better it’ll be for their career,” he said. “I often get asked about this and I say, ‘we’re not going to have a set policy but if I was in your shoes, I would want to meet with people, I would want to be in the office, I’d want to sit with that partner, go to a meeting with him or her’.”



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