By Vincent Howard, CPA | Managing Partner, Howard, Howard and Hodges | Skillability for Accounting Firms
Last updated: 2026 | 13-minute read
TL;DR — The Short Answer
Public accounting firms lose 15% to 22% of their staff annually, and first-year accountants leave at rates of 25% to 35% — the highest of any tenure group. Most firm owners respond by raising salaries, and most are surprised when it doesn’t work.
The data points somewhere else: firms with structured onboarding and visible development pathways reduce first-year turnover by 30% to 40% compared to firms without them. Turnover at most CPA firms is not a compensation problem. It is a development infrastructure problem — and it is far cheaper to fix than the raises you’re contemplating.
Who I Am and Why You Should Listen
I’ve been in public accounting since 1990. I founded my own firm in 1993, merged it in 2001 to form Howard, Howard and Hodges, and grew it from three people to 50 staff across four locations and multiple states.
I have lost people I shouldn’t have lost. Early in my career as a firm owner, I lost them to the 80-hour tax seasons we all accepted as normal. Later, I lost them more quietly — good staff who left for “opportunities” that, when I was honest with myself, were really just escapes from a firm where they couldn’t see their own future. Some of that turnover was my fault in ways I didn’t understand until years afterward.
I also rebuilt a firm deliberately around retention. In 2001, my wife drew a line in the sand about the hours I was working, and we fired half our client base — the unprofitable ones, the abusive ones — and rebuilt the practice around a culture where people could have a life. Within 18 months we were bigger than before. Today, my team doesn’t work the crazy hours during tax season that the profession treats as a rite of passage, and our retention reflects it.
And since 2020, I’ve had something most firm owners never get: visibility into how more than a thousand new hires across dozens of PASBA member firms actually progress, struggle, develop, and stay — or don’t — inside a measured training environment. That data changed how I think about turnover. This article is what it taught me.
The State of CPA Firm Turnover: What the Numbers Actually Say
Let’s establish the baseline with current data, because most firm owners are operating on anecdote.
Public accounting firms experience average turnover rates of 15% to 22% annually, with voluntary departures accounting for 84% of all exits. First-year accountants face the highest attrition risk at 25% to 35%. Industry-wide, public accounting firms lose 41% of staff within three years — far higher than the 28% seen in corporate accounting roles.
The timing is predictable, too. April through June accounts for nearly half of annual voluntary departures — accountants finish busy season, collect their bonus, and resign before next year’s engagements are staffed.
Annual Turnover Rate
15–22%
public accounting avg.
First-Year Attrition
25–35%
highest of any tenure group
3-Year Departure Rate
41%
vs. 28% in corporate roles
Turnover Reduction
30–40%
with structured development
There is one piece of moderately good news: according to Inside Public Accounting’s survey data, firmwide turnover fell to 11.8% in 2025, the lowest level in more than 20 years of survey data — down sharply from the 15.9% peak in 2022. Notably, smaller firms under $5 million in revenue reported just 8.1% turnover compared to 14.6% at firms above $75 million.
But don’t let the improving averages lull you. The replacement cost math remains brutal: replacing a skilled accountant or CPA costs between 50% and 400% of their annual salary. And the supply side is shrinking — more than 300,000 accountants and auditors left the profession between 2019 and 2021, with fewer graduates entering the pipeline. Some projections put the industry talent gap at 120,000 professionals by 2027, with nearly 40% of CPAs approaching retirement.
Every preventable departure costs more than it ever has, and the replacement is harder to find than it has ever been. Retention is no longer an HR nicety. It is capacity strategy.
Why the Standard Playbook Fails
When turnover spikes, most firm owners reach for the same three levers, in the same order. Here’s why each one underdelivers.
❌ Lever 1: Raise salaries
Compensation matters — a firm paying dramatically below market will bleed people no matter what else it does. But salary is the reason people give on the way out, not the reason they started looking. Firms that emphasize total packages — flexible scheduling, professional development, and clear advancement timelines — retain staff more effectively than those competing solely on base salary. A raise without a visible future buys you six months. Then the recruiter calls again.
❌ Lever 2: Perks and culture gestures
Casual Fridays, catered busy-season dinners, an extra floating holiday. These are fine — genuinely — but they treat the symptom. Nobody stays at a firm for the snacks, and nobody leaves a firm that’s developing them because the break room is dull.
❌ Lever 3: Exit interviews and counteroffers
By the time you’re conducting the exit interview, you’re collecting an autopsy, not running a diagnosis. And counteroffers are famously short-lived — the underlying reasons the person went looking are still there, now with added awkwardness.
The common thread in all three: they respond to departure instead of building the conditions that prevent the search from ever starting.
The Real Driver: People Leave Firms Where They Can’t See Their Own Future
Here’s the contrarian thesis, and I’ll stake 35 years of practice on it:
The single biggest controllable driver of CPA firm turnover is the absence of visible, structured development — starting on day one.
Walk through the employee’s actual experience at a typical firm:
Week One
Dropped into the shadowing method — sat next to a busy senior who trains them in distracted fragments between deadlines. The implicit message: we don’t invest in onboarding here; figure it out.
Months One Through Six
Absorbing tribal knowledge inconsistently, making errors nobody catches until review, developing at whatever pace circumstance allows. No milestone, no measurement, no sense of progression. Just work.
Years One Through Three
They become competent at their tasks. And then… nothing changes. The path from bookkeeper to staff accountant, from compliance processor to advisor, exists in theory — but nobody has shown them the actual steps. Every recruiter email promises exactly that clarity somewhere else.
Year Three: They Leave
Right on schedule. The National Pipeline Advisory Group’s polling found that 41% of respondents identify the three-to-five-year mark as peak turnover. Three years is roughly how long it takes a capable professional to conclude that the future they were vaguely promised isn’t actually coming.
Now look at what the research says about the alternative: firms conducting structured 30-day, 90-day, and 6-month retention conversations reduce first-year turnover by 30% to 40%, and mid-sized firms adopting comprehensive development programs report a 47% decrease in first-year turnover. Certification support shows the same pattern — CPA candidates retain at 73% versus just 49% for non-certified peers.
Structure retains. Ambiguity bleeds.
The Five-Part Retention Playbook (Built on Development, Not Perks)
1. Fix the first 30 days — because turnover starts on day one
First-year attrition of 25–35% isn’t a year-one problem. It’s a week-one problem that takes a year to show up on your books.
A new hire who spends their first month confused, under-trained, and dependent on a distracted senior forms a permanent impression: this firm doesn’t have its act together, and my growth here will be accidental. A new hire who spends weeks one through three inside a structured pathway — processing a full simulated year of client work, passing objective milestones, earning a certification at the end — forms the opposite impression: this firm is serious, I am measurably better than I was three weeks ago, and there’s a system here that develops people.
Same hire. Same salary. Completely different retention trajectory.
This is exactly why we built our onboarding system the way we did: gated modules, 80% pass thresholds, real software, real work product, a certificate at completion. The retention effect wasn’t the original goal — stopping the bleed of senior billable hours was. The retention effect turned out to be the compounding bonus.
2. Make the development pathway visible — literally
Most firms have an org chart. Almost none have a development map: the explicit, written sequence of skills, milestones, and demonstrated competencies that takes a bookkeeper to staff accountant, a staff accountant to senior, a compliance processor to tax advisor.
Build one. Put every employee on it, with their current position marked. In our world, that map has names: accounting fundamentals through year-end processing, then the Level Up pathway — financial statement analysis, the equivalent of junior-and-senior-year accounting coursework without the four-year degree — and on to the advisory track, where staff learn to read financials for insight, run planning scenarios, and conduct meaningful monthly client conversations.
An employee on that pathway can answer the question every recruiter implicitly asks — “where is your career going?” — without needing to change firms to get the answer.
3. Address the AI anxiety head-on — with upskilling, not reassurance
Your bookkeepers and data-entry staff can read the same headlines you can. They know automation is coming for transaction processing. Some of them are quietly job-hunting not because they’re unhappy, but because they’re scared — and they assume you have no plan for them.
Telling them “don’t worry” is worthless. Showing them a funded, structured pathway from data processor to accounting consultant — someone who analyzes statements, spots anomalies, advises clients — is the single most powerful retention message you can send to that group. It says: when the role changes, you change with it, here.
The firms that upskill their compliance staff before automation forces the issue will keep their best people. The firms that wait will watch those people leave for firms that didn’t.
4. Protect the busy season — structurally, not sympathetically
I worked 80-to-85-hour weeks for the first decade of my career. Seven in the morning to midnight during tax season, Saturdays the same, Sundays after church until ten. My wife will tell you she didn’t see me for ten years. When we adopted our first child, she drew the line — and that forced the redesign of the entire firm: we fired the unprofitable and unpleasant half of our client list and rebuilt around a sustainable model. Eighteen months later we were bigger than before.
The lesson: brutal hours are not a law of nature in this profession. They are a business model choice. And the generation entering the workforce now has watched their parents grind through 80-hour weeks, hit retirement, and die within a year — they are not signing up for that.
The data backs the anecdote: 82-hour peak-season workloads correlate with 33% turnover, while firms offering flexible schedules see 41% better retention than traditional models. And remember when departures cluster: April through June, immediately after busy season. Your tax season working model is your retention policy, whether you’ve written it down or not.
Capacity is the real fix — and capacity comes back to training: staff who reach full productivity in 30 days instead of 90 make a humane busy season financially possible.
5. Use objective data to catch disengagement early
The platform data taught me something I couldn’t see in twenty-five prior years of managing people: progression speed is a leading indicator. When you can see module completion times, assessment scores, and engagement patterns, you spot the struggling hire in week one — and the disengaging veteran in month one — instead of discovering both in an exit interview.
Pair that with the structured check-in cadence the research supports — 30 days, 90 days, six months — and your retention conversations happen while there’s still something to retain.
The Retention Math: What This Is Actually Worth
Let’s put numbers on it, because we’re accountants.
| Scenario | Annual Cost | Retention Effect |
|---|---|---|
| Current state 25-person firm, 18% turnover, $52,500 replacement cost |
$236,000/yr | Baseline (no change) |
| 5% salary increase 25 staff × $70K avg × 5% |
$87,500/yr (ongoing) | Partial, temporary |
| Skillability structured training $1,000 setup + $675/mo |
$9,100 yr one | 30–40% turnover reduction = ~$83,000/yr recovered |
That’s a nine-to-one return — before counting the $9,500 per hire saved on onboarding, the senior billable hours recovered, the mis-hires caught in days instead of quarters, or the advisory revenue your upskilled staff begin generating.
I’m not against paying people well. I’m against paying more for a worse result.
Frequently Asked Questions
What is the average turnover rate at accounting firms?
Public accounting firms report average annual turnover of 15% to 22%, with voluntary departures making up 84% of exits. First-year staff leave at the highest rates — 25% to 35% — and 41% of public accounting staff depart within three years. By firm size, smaller firms retain better: practices under $5 million in revenue reported 8.1% turnover in 2025 versus 14.6% at firms above $75 million. Departures cluster heavily in April through June, immediately following busy season.
Why do accountants leave public accounting firms?
The commonly cited reasons are compensation gaps, busy-season burnout, and limited advancement. But the pattern underneath those reasons is the absence of visible development: staff who cannot see a structured path from their current role to a better one conclude the path doesn’t exist and leave to find one — most often at the three-to-five-year mark. Firms with comprehensive development programs report up to 47% lower first-year turnover, and CPA-track employees retain at 73% versus 49% for non-certified peers.
How much does it cost to replace an accountant?
Replacing a skilled accountant or CPA costs between 50% and 400% of their annual salary — covering recruiting fees, onboarding costs, lost productivity during the vacancy and ramp-up, and client continuity damage. For a $70,000 staff accountant, a conservative estimate is $35,000 to $52,000 per departure. A 25-person firm at industry-average turnover absorbs over $200,000 in annual replacement costs, most of it invisible because it’s distributed across the P&L rather than itemized.
How do you retain staff at a small CPA firm?
Five levers in order of impact: (1) structured onboarding that gets new hires to competence in under 30 days — first-year attrition is largely determined by the first month’s experience; (2) a written, visible development pathway from current role to the next one; (3) proactive upskilling of compliance staff toward advisory capability before automation anxiety drives them out; (4) a sustainable busy-season model — post-season months account for nearly half of annual departures; (5) structured check-ins at 30, 90, and 180 days, which research shows reduce first-year turnover by 30–40%.
Does raising salaries reduce turnover at accounting firms?
Only partially, and only temporarily if used alone. Compensation must be competitive — a firm paying dramatically below market will lose people regardless. But research shows firms emphasizing total packages (flexible scheduling, professional development, clear advancement timelines) retain staff more effectively than those competing solely on base salary. Salary is frequently the stated reason for departure but rarely the original trigger; the trigger is usually the conclusion that growth isn’t coming. A raise without a visible development pathway typically delays a departure rather than preventing it.
What is the 3-3-3 rule for employees?
The 3-3-3 framework holds that employees reassess their commitment at three months, three years, and the three-to-five-year mark — and the accounting industry’s data validates it almost perfectly. First-year attrition peaks early, driven by onboarding experience. Overall turnover peaks at three to five years, driven by stalled development. The practical application: invest most heavily in the structured first 90 days, and ensure that by year two every employee can articulate exactly what they’re progressing toward — because by year three, they’ll have answered that question with or without you.
The Bottom Line
The accounting profession is fighting over a shrinking pool of talent, and most firms are fighting with the wrong weapons — raises that buy six months, perks that change nothing, and exit interviews that document failures instead of preventing them.
The firms that win retention over the next five years will be the ones that understood what the data has been saying all along: people stay where they are visibly becoming something. Structured onboarding. Mapped development. Upskilling ahead of automation. A busy season designed for humans. Objective progress data that catches problems early.
Every one of those is infrastructure. Every one of them is buildable. And every one of them costs less than the turnover you’re currently absorbing as a normal cost of doing business.
You are not losing your people to better firms. You are losing them to your own missing development system. Fix the system, and the people stay.
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To your firm’s capacity,
Vincent Howard, CPA
Managing Partner, Howard, Howard and Hodges
Skillability for Accounting Firms
About the Author
Vincent Howard, CPA has practiced public accounting since 1990. He holds a Master’s degree in Taxation from the University of Central Florida, leads a 50-person multi-state firm, and built the Skillability training platform used by accounting firms nationwide through the PASBA network. Howard, Howard and Hodges was named PASBA Firm of the Year and has offices in Lake Mary, Sarasota, and Winter Springs, Florida.
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