The number of people required for an accounting engagement has shrunk dramatically over the years, as tasks that used to require a veritable army of associates can now be done with six people and a laptop. This is almost entirely due to technological efficiencies, which have automated away many routine tasks, which has allowed for leaner, more specialized teams.
Shawn Slavin, president of the Information Technology Alliance, says this trend doesn't show signs of slowing down anytime soon: "Now it's six people and a laptop. Wait until it's one person and a drone that does [radio frequency identification] or barcoding and does a physical inventory just by flying down the aisles and getting counts of everything in place because the major things with a material impact are all barcoded or have RFID tags. That technology is not far away."
The ability to do more things with fewer people, though, raises questions as to whether the profession will shrink. Companies, after all, are generally not in the habit of hiring more staff than they need. Does the future of accounting mean fewer accountants?
Gail Heskiel, chief operating officer of Net at Work, said the answer is "sort of." The number of accountants doing routine compliance jobs like filling in tax forms will shrink significantly, but they're not exactly going to be put out of work. They'll be doing more complex, value-added services instead.
"I think we will definitely lose headcount when it comes to existing roles," she said. "Dramatically. Fifty to 75% of those roles will be decreased. But I don't think headcount will change because those roles will evolve and there will be new roles that don't even exist today. So, the current headcount will change."
Slavin also gave a "yes and no" answer. He agreed that much more can be done now with fewer people. He pointed to his own experiences shortly after college working for a drilling contractor. Back then, he said, the company needed to send someone to every well site to collect data. They did this about once a month for each well site.
"I had a previous client who was putting technology in well sites to collect data on an hourly basis. So they went from one data point a month to 24 data points per day, and they take that and scan it for new information, not just about production, but maintenance and equipment, and how it's all working," he said.
So the population of accountants doing these sorts of tasks will indeed shrink dramatically. But he said the humans will just be shifted into higher-level consulting work, as there will be rising demand for insights.
"I think where demand will continue is in the high-skill, high-knowledge worker advisory roles where you play contract controller, CFO, risk advisor, etc. Until there is a major breakthrough in artificial intelligence, that will require someone who has been there, done that, got-the-scars-to-show-for-it experience to help advise those customers on how best to address issues they've only seen one or two times but the consultant has seen 25 times this year alone," he said.
Brian Tankersley, director of strategic relationships with K2 Enterprises, conceded, "I think the headcount of the profession is going to shrink," but not in a material way, given the transition into more complex work. He compared it to construction. His father, he said, would sometimes have to dig ditches. Now, however, there are so many tools available to dig ditches that they don't need people to do that anymore. But they do need people with the knowledge and expertise to operate those tools in the first place.
"We don't have to have as many people shoveling holes. So, I think [the headcount] will shrink, but I think also we have to have a different mindset, a way of thinking. You can have people carrying five-gallon buckets upstairs, or you can get a plumber. I think we have to think more like plumbers in the future, where we watch this process go through and see where things pile up and exceptions start happening, and go attack that and figure out why. So it will be more like a detective, more of a troubleshooter, more of a problem-solver, more like a car mechanic," he said.
Peter Scavuzzo, principal and chief digital information officer for Top 25 Firm Marcum, said there might come a day when "instead of a couple hundred positions open, maybe just 20" are needed, but it is not this day. Indeed, the big issue for firms right now isn't too many people but too few. Competition for talent is fierce, forcing many to turn toward automation to make up for lack of staff. In this respect, it is not a matter of fewer people due to automation; it is a matter of automation due to fewer people.
"Every firm I know of is short-staffed and needs people," he said. "So rather than saying we're downsizing, reducing headcount, I'd say we're closing the demand gap of resources we need. That's an important distinction."
He added that the work people will be drawn to will be more complex, require more time, and be more analytical in nature. As firms fill out their capacities for this work with technology, he said, the profession might not shrink but actually grow as demand for expertise rises.
Jamie Fowler, chief transformation officer at Top 10 Firm Grant Thornton, agreed. There won't be less work, just different and more valuable work. And that, she said, is how young accountants want things anyway.
"The days and weeks and months I spent doing things like inventory counts and the same type of tax return over and over and over again — those will just be gone and I think it suits our professionals in what they want. When I meet new associates coming from campus, they don't want to go to the warehouse and count. They're going to be able to use those skills in a more valuable way, more quickly," she said.
This story is part of the second season of the Accounting Today series called "The Frontier," where we explore the cutting edge of accounting technology through conversations with thought leaders across the country, who will share with us their observations, hopes, concerns and even a few predictions here and there.
See the rest of
