The requirements of the Sarbanes-Oxley Act, coupled with the demand for accountants in other areas, has increased the difficulty in finding qualified staff for the annual rush of returns during the 2004 filing season.
"Don't think it's too early to start hiring additional staff, because the resources are very limited this year," warned Frank Ferreri, market vice president of finance, accounting and technology at Tampa, Fla.-based Kforce, a financial staffing and human resources concern. "My peers around the country say the same thing. In the last two or three years employers could dictate what they needed or were willing to pay, but now it's starting to shift in the other direction. It's becoming a candidate-driven market."
A primary reason for this, according to Ferreri, is the additional resources needed to perform Sarbanes-Oxley compliance work.
"We're already seeing several of the Big Four firms looking for tax people at all levels, and this is something we haven't seen in the last couple of years," he explained. "We are working with two of the Big Four firms right now in Tampa who are looking for tax professionals with two to four years' experience."
"In the past, the Big Four would use two-year audit professionals to help out during tax season, but SOX has changed all that," said Ferreri. "The audit side of the practice is overworked and understaffed, so there's no one to loan out. Tax departments are on their own and have to look to outside resources for their busy season."
"People are being put on all sorts of engagements related to Sarbanes-Oxley," agreed Neil Lebovits, president and chief executive of Saddle Brook, N.J.-based accounting staffer Ajilon Finance. "Even the middle-tier CPA firms are looking for talent to fill audit and consulting services, so finding people for tax season is going to be difficult this year. Demand is way up, so firms looking to hire help for tax season should have a strategy in place fast."
"There's going to be a shortage of people this tax season," said John Gramer, the New York director of Spherion Professional Services. "The accounting and audit sides both have shortages. Two to four years ago, accounting firms didn't hire as many accountants as they did in prior years. Now, three years down the road, those people who should be coming up through the ranks are not there. It's like a farm team in baseball. If you don't bring them in at the rookie level, they won't progress through the system by becoming senior managers five years down the road."
Firms are trying to deal with the problem in two ways, according to Gramer. "First, they either start hiring people with three to four years of experience. There's still the same problem because there's a shortage of people all over the place."
"It's like robbing Peter to pay Paul," he said. "You may get people you wouldn't have hired in the past, and to make up for that you are hiring a person with not as much experience to help fill the gap and have managers pick up the slack."
The second way is to hire more temporary people, those with 10 or 11 years of experience, on a contract basis.
"These are accountants who may have worked for one of the larger firms or have their own accounting firm," Gramer said. "They stay four months through the end of tax season, and the firm that hires them gets the benefit of their experience without having to take on additional permanent staff."
For Newport News, Va.-based Rob Carmines, CPA, the Internet has greatly enhanced his ability to retain staff, as they or their spouses are transferred out of the area. "Our tax manager lives in Germany, and one of our preparers lives in Alaska," he explained. "In a sense, it's internal outsourcing. I would never strictly outsource because of all the bad press it's getting. Anyone in the industry knows you may have people working down the hall who are less competent than someone in India, but if someone has worked here before and is now 1,000 miles away, I can deal with that."
Carmines normally places ads to find the additional staff he needs during tax season. "It's important to look early," he said. "We give prospects a tax return to prepare. If they're willing to come in and spend three hours working on a return for no pay, it shows they want a job."
"We may have them come in during December and enter prior years data for new clients," he explained. "We don't hire 1040 preparers and get them to do other jobs. I'd rather pay them to sit at their desk waiting for the first 1040 to come in than to have them do something they're not competent in."
Matawan, N.J.-based CPA Salim Omar recruits about 10 to 12 additional staff for tax season by offering tax courses. "We teach an advanced course in early December to recruit preparers, and another basic course in January to recruit administrative people," he said.
"We found that it's advantageous for administrative people to have a basic knowledge of tax," Omar said. "They can communicate better with the clients, and it gives the office a more professional atmosphere."
Chuck McCabe, chief executive of Richmond, Va.-based Peoples Income Tax, has used tax schools to find new staff for his 14 locations in central Virginia. "We have over 100 preparers during tax season, with about 85 percent of them seasonal," he said. "Every year we train entry-level people, and each year they come back and take the more advanced courses."
McCabe has made his courses available to other independent tax business owners. "Our courses are the only ones available to independent tax practitioners to teach their own tax courses the way H&R Block does," he said. "Without the school, it's extremely difficult to get qualified seasonal preparers."
McCabe, a former manager at H&R Block, said that it was easier to find students when Block was the only game in town. "They were the only ones who taught it, and there were more stay-at-home moms and retirees that could work part-time during tax season. Today most households are two-earner households, and people are retiring later, so there's a smaller supply of prospective students."
