The current business and regulatory climate has fueled so much demand for accountants across the board that it will make seasonal staffing during tax time more difficult than ever, according to industry observers."Demand is even higher than last year, with more needs and less people available," said John Grammer, CPA, regional managing director of Spherion's professional services division in New York. "Firms are calling up and wanting to increase our fees, hoping if they pay us more we'll send qualified people to them rather than somewhere else. But besides being unethical, even if you pay me double it won't make any difference as to how many qualified candidates I can get."

"It's definitely a candidate's market," agreed Neil Lebovits, president and chief executive of Saddle Brook, N.J.-based Ajilon Finance. "Without question, job candidates are in the driver's seat, and it's more so than last year."

James Wong, CPA, co-president of Chicago-based Garelli & Wong, observed that the demand for qualified accounting staff is greater than the supply. "Most companies that are hiring tell us they are understaffed at all levels. We see a similar trend industry-wide," he said. "The supply is not getting better. Over the past 10 years, accounting grads declined between 25 and 35 percent, at a time when demand was increasing. It's difficult to change a trend within a one-year time frame - demand is still very strong, at a minimum it's the same, and supply is not catching up very much."

The need for accountants versed in Sarbanes-Oxley and FAS 109 has dried up the talent pool for tax staffers, according to Mike Hurley, director of tax for the Tampa, Fla., office of staffing concern Kforce.

"Smaller firms need tax compliance people," he said. "They may be out there, but companies and firms need so many people to comply with FAS 109, it leaves few leftovers for the compliance work."

Lebovits agreed. "Tax pros are being sucked into the Sarbanes-Oxley compliance world, and they're no longer available for tax. The people who normally would be available for tax work are just not there."

"Just about every analyst in the book had predicted that by now we would see a dramatic decline in SOX placement, and that didn't happen at all. There's a decreasing supply and an increasing demand, which has resulted in a real war over talent," Hurley added.

"Some clients go another route - with people who are actually retired, who are 65 or 70 years old," said Spherion's Grammer. "They bring them back on a part-time basis and give them a flexible schedule. The same goes for women who have had children and left."

"They're also hiring people that have had many more jobs in the past than you would normally expect - they're stretching a bit more, and the requirements are more forgiving," he observed.

"I'm not sure the quality has declined, but expectations are starting to shift," said Wong. "One of our clients, a major public company, was at first adamant to hire someone with a minimum of three years of federal tax compliance experience. It was so difficult to find a number of candidates with those qualifications, they're now willing to look at a candidate with lighter tax experience but with an aptitude to learn."

Outsourcing, however, is not a panacea for most firms, according to observers.

"One of our major investment banks talked about outsourcing to India, but they're still trying to define whether or not it's working," said Grammer.

"Overall, it hasn't had much impact on us. We see very little of that - when it comes to tax, they want to touch and feel the people doing the work," agreed Hurley of Kforce.

Teaching to the tax

Tax prep firms are following the practice of H&R Block by offering free or low-cost tax courses to would-be preparers, and recruiting the best students to work during tax season.

Chuck McCabe, chief executive of Richmond, Va.-based Peoples Income Tax, has developed a course that he makes available to other independent tax business owners. He developed it out of necessity to find preparers for his own firm's 14 locations in central Virginia. "We have more than 100 preparers during tax season, and about 85 percent of them are seasonal," he said.

Matawan, N.J.-based CPA Salim Omar selects 10 to 12 extra staff by offering courses. "We teach an advanced course in early December to recruit preparers, and another basic course in January to recruit administrative people," he said.

Wayne Novitch, who owns three Jackson Hewitt locations in the Scranton, Pa., area, finds "football widows" who prefer to leave their husbands at home to attend his tax course offerings on Sundays during the fall.

The consensus among staffing companies is that if you plan on seeking tax season help, start looking now.

"If you wait until December you're probably going to be too late," said Wong. "You need to start looking right away, and you need to be very flexible with the type of person you're looking for. Look at accounting programs at local universities, or at professionals who may have left a firm for family reasons, and see if they're willing to come back part-time."

"It's necessary to get ahead of the demand curve," he said. "It's similar to a snowstorm - when people know it's coming, they empty the grocery stores of the essentials."

In addition, Wong noted that it allows more time for training. "If you need someone with limited corporate or partnership experience, you can hire someone in December who has only done individual returns. By the time the busy season arrives, they'll be effective to help out on business returns as well."

Lebovits suggested hiring full-timers. "The temporary talent pool just doesn't exist. It won't be a solution for everyone, because there's more business than there are people to do the work," he said. "Our advice is still to start looking early, and jump on anyone with the ability to do tax and other work. If you can hire someone with a wide range of skills, bring them on board as soon as possible."

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