Fifty-two percent of accountants expect their firms to shrink in headcount by 20% in the next five years, according to a new report.
The Indiana CPA Society, in collaboration with CPA Crossings, released today a 2025 Workforce Transformation
Sixty percent of respondents said that entry-level professionals are the role they anticipate needing fewer employees in the future due to automation. Nearly half as many responded saying experienced professionals (approximately 33%) and manager-level roles (approximately 25%).
The report highlights the weaknesses of the pyramid-shaped practice structure that is the basis for most firm's current talent management and workforce development systems. One challenge is the pyramid's low retention design.
"The pyramid practice structure was not designed to retain staff. It actually does the opposite. Upward mobility is statistically difficult to attain," the report reads. "Firms have a lot of requirements for entry-level staff, but there is a lot less need for experienced staff. Firms eventually have a lot of entry-level professionals qualified to become experienced staff but only a few openings. It only gets more difficult as staff try to move from experienced staff to managers. For those who want to move from managers to owners, the wait could be 15 years or more — or maybe never."
The report discussed the dwindling pipeline of incoming talent, saying, "Currently, there are not enough qualified staff to maintain a bottom layer that is wide enough," and generational preferences, saying, "Gen Zers are looking for meaning and emotional connection. If they cannot find these connections in their work, it won't take much for them to decide to move on."
The final weakness of the pyramid model the report highlighted was advances in technology, particularly automation and artificial intelligence.
"Advances in technology, especially with automation and artificial intelligence, could obliterate the work being done by the bottom of the pyramid," the report reads. "This impact is beginning to be seen in accounting firms across the country as manual and time-consuming data entry and reconciliation tasks, once assigned to entry-level staff, are being automated. Firms are already seeing great benefits from this transfer, such as faster and more accurate data processing."
The report suggests that firms take on a new practice structure that focuses on precision hiring, proactive retention, practical technology implementation, pricing expertise, practice area expansion or focus, and people acceleration.
