By Vincent Howard, CPA | Managing Partner, Howard, Howard and Hodges | Skillability for Accounting Firms
Last updated: 2026 | 15-minute read
The Short Answer (TL;DR)
CPAs are declining for structural, compounding reasons: the 150-hour education rule adds a costly fifth year that depresses entry, starting salaries lag tech and finance by $20,000–$60,000, roughly 75% of CPAs are nearing retirement, and burnout from brutal busy seasons keeps driving people out — 300,000+ accountants and auditors left the profession in recent years, and first-time CPA exam candidates fell more than 40% between 2016 and 2024. The market is now structurally short: for every five open CPA-required roles there are only about three qualified candidates, and those roles take 41% longer to fill than non-CPA positions. State licensure reforms (23+ states adding alternative pathways) will help eventually, but they take years of exam cycles to matter. Meanwhile AI is removing the entry-level data-entry work that used to accidentally train rookies — so the old “hire experienced talent from a recruiter” strategy is failing because that talent no longer exists to buy. The firms solving the capacity crisis anyway have stopped chasing external talent and started building it internally: hiring for aptitude, then using structured workforce-development infrastructure to manufacture capable staff in weeks instead of waiting years for a pipeline that isn’t refilling.
This guide covers why the decline is happening, why the standard responses are failing, and what progressive firms are doing instead.
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. Our firm was named PASBA Firm of the Year.
I’ve lived the entire arc of this decline from inside a firm. I remember when you could post a staff accountant role and field a stack of qualified résumés in a week. I remember when an experienced mid-level hire was a phone call to a recruiter away. Those days are gone, and they are not coming back on the timeline any of us would like. Since 2020 I’ve also built a structured staff-development platform that more than a thousand accounting professionals across dozens of PASBA member firms have moved through — which gave me a front-row view of the one strategy that actually works when the talent pipeline breaks. This article is the honest diagnosis and the working solution, in that order.
Why Are CPAs Declining? The Five Compounding Causes
This isn’t one problem. It’s five trends arriving at the same intersection, which is why it’s been so resistant to easy fixes.
1. The 150-hour rule
To sit for the CPA exam, candidates have historically needed 150 college credit hours — effectively a fifth year of school beyond a standard bachelor’s degree, adding $15,000–$50,000 in education costs and a year of delayed earnings. When finance, tech, and consulting hand out higher starting salaries on a four-year degree, the math stops working for a lot of capable students. Research from MIT Sloan has associated the rule with a measurable decline in candidates, particularly among lower-income and minority students.
2. The salary gap
The numbers are stark. A first-year audit associate at a mid-size firm earns roughly $55K–$70K in most markets, while a first-year financial analyst earns $75K–$95K and a first-year software engineer earns $90K–$130K — often the same students, from the same universities. That gap has widened almost every year, and students notice.
3. The retirement wave
The existing CPA workforce is aging out fast. By many estimates around 75% of CPAs are at or near retirement age, and the AICPA/NASBA Trends data shows the active workforce increasingly concentrated in later-career groups. Retirements are outpacing new entrants — the pipeline is draining from both ends at once.
4. Burnout and the perception problem
The profession carries a reputation — fair or not — for rigid, stressful, busy-season-dominated work. More than 300,000 U.S. accountants and auditors left their jobs within roughly two years, a 17% drop from the profession’s 2019 peak, many of them moving to higher-paying, more flexible roles in tech, private equity, and advisory. The January-through-April grind that the profession treats as a rite of passage is, for a lot of talented people, simply a dealbreaker.
5. The shrinking exam pipeline
All of it shows up in one number: first-time CPA exam candidates fell by more than 40% between 2016 and 2024, and overall candidates are down more than 30% since 2016. Fewer students choose accounting, and of those who do, a meaningful share never sit for or pass the exam — pass rates run 40–63% per section.
What the Decline Actually Means for Your Firm
The macro statistics translate into three concrete operational realities at the firm level.
The math doesn’t balance. The Bureau of Labor Statistics projects roughly 120,000+ accounting and auditing openings each year against far fewer graduates entering to fill them. One analysis pegged the imbalance at about 124,000 annual openings versus roughly 55,000 graduates.
Hiring takes longer and costs more. With only about three qualified active candidates for every five open CPA-required roles, those roles now take an average of 73 days to fill — 41% longer than comparable non-CPA positions. And the candidates who do exist receive multiple offers within 10 to 14 days, forcing firms to overpay and move fast or lose them.
The reforms won’t save you in time. At least 23 states have changed their rules to allow alternative CPA pathways — typically substituting a second year of experience for the fifth year of school. This is genuinely good policy. But rebuilding a pipeline takes years: students need time to complete education, exams, and experience. The relief is real and slow; your capacity problem is this tax season.
Why the Standard Responses Are Failing
Faced with this, most firms reach for the same playbook. Here’s why each lever underdelivers.
Raise salaries and offer signing bonuses. Necessary to stay competitive, but it’s an arms race that compresses margins, and as one staffing analysis notes, it’s a retention play, not a recruiting play — it doesn’t close the salary gap with tech or fix the pipeline. You can win a bidding war and still have no one to bid on.
Hire experienced talent from recruiters. This is the strategy that’s quietly broken, and it’s the one I most want managing partners to confront. When there are three candidates for every five roles, the recruiter isn’t expensive — they’re selling inventory that increasingly doesn’t exist. You cannot build a durable staffing model on a pool that’s shrinking every year. Every firm chasing the same mid-level hire is bidding against every other firm for a vanishing resource.
Outsource and offshore. A legitimate capacity tool for production work, and many firms are using it well. But it doesn’t build the advisory bench, the client relationships, or the firm-specific judgment your practice runs on — and it doesn’t develop the next generation of your own leaders.
Wait for automation to fix it. Here’s the trap inside this one. AI is absorbing the routine transactional work — and that work was the accidental training ground for rookie accountants. For decades, juniors built judgment by grinding through reconciliations and data entry. Automation is removing those reps just as the pipeline thins, which means AI is simultaneously easing the capacity problem and deepening the development problem. Waiting for automation to save you produces a firm with abundant processing capacity and no one learning to think.
The common thread: every standard response assumes capable talent can be acquired from outside. The structural reality is that it increasingly can’t.
How Progressive Firms Are Solving It Anyway: Build, Don’t Buy
The firms thriving through this shortage made one pivot the others haven’t: they stopped trying to buy capable talent and started building it.
That sounds obvious until you see what it actually requires, because “we’ll just train people” with no system is how firms have always said they develop staff — right before defaulting to shadowing and hoping. Building talent at scale, reliably, fast enough to matter, takes infrastructure. Here’s the model that works.
Hire for aptitude, not scarce experience
When experienced talent doesn’t exist to buy, the winning move is to hire for the capacity to develop — aptitude, trainability, work ethic — rather than for a résumé you can’t find anyway. This widens your candidate pool dramatically and sidesteps the bidding war entirely. But it only works if you can reliably turn aptitude into capability, which is the next piece.
Replace accidental training with intentional infrastructure
The old apprenticeship — learn by doing years of grunt work under a senior’s eye — is dead twice over: AI took the grunt work, and your seniors are too scarce and overburdened to hand-hold anyway. The replacement is a structured workforce-development system that transfers institutional knowledge deliberately instead of by osmosis: new hires process a full simulated year of real client work inside your actual software, gated by assessments on their own work product, reaching independent productivity in weeks rather than the months-to-years the accidental model required.
The speed difference is documentable. Industry staffing analysis finds a finance major needs 6–12 months to become productive in a tax role versus 2–3 months for an accounting graduate — and that’s under conventional training. Structured, execution-based development compresses the ramp further still, which is exactly the leverage a short-staffed firm needs: every week you cut off time-to-productivity is capacity recovered.
Stop burning your scarce seniors on babysitting
In a talent shortage, your experienced people are your single most precious resource — and the traditional model wastes them as full-time trainers, pulling your most billable professionals off client work to explain software navigation. Structured development inverts this: the system carries the mechanical training, and your seniors spend their scarce hours on judgment, review, and the advisory work only they can do. You’re not just developing juniors faster; you’re protecting the capacity of the people you can’t replace.
Build the ladder that keeps people from leaving
The shortage isn’t only a recruiting problem — it’s a retention problem, and the two compound. High performers leave firms where they can’t see a next rung. A visible development pathway — from execution to judgment to advisory capability — answers the question every recruiter dangles, which is where is your career going? In a market where your competitors are losing people every quarter and re-paying the hiring cost each time, retention through visible development is a compounding structural advantage.
The Bottom Line
CPAs are declining because five forces — the 150-hour rule, the salary gap, mass retirements, burnout, and a collapsing exam pipeline — converged at once, and no single reform will reverse it inside this decade. The talent you used to buy from a recruiter is genuinely disappearing, and the automation that’s easing your processing load is simultaneously erasing the entry-level work that once trained your next generation.
That’s the bad news, and it’s structural. Here’s the good news, and it’s also structural: the firms that quit waiting for the pipeline to refill — that pivoted from buying talent to building it through deliberate development infrastructure — are staffing their engagements, protecting their seniors, and growing while their competitors turn work away. The shortage didn’t get easier for them. They just stopped depending on a market that broke.
You are not at the mercy of a talent shortage. You are at the mercy of a talent acquisition strategy that the shortage made obsolete. Change the strategy from buy to build, and the crisis becomes a competitive advantage.
Frequently Asked Questions
Why are there fewer CPAs?
CPAs are declining because of five compounding factors: the 150-hour education requirement adds a costly fifth year of school that deters students; starting salaries lag tech and finance by $20,000–$60,000; roughly 75% of CPAs are nearing retirement; busy-season burnout has driven 300,000+ accountants and auditors out of the profession in recent years; and CPA exam participation has fallen sharply, with first-time candidates down more than 40% between 2016 and 2024. These trends reinforce each other, and while 23+ states are adding alternative licensure pathways, rebuilding the pipeline takes years of education and exam cycles.
How bad is the CPA shortage in 2026?
Severe and structurally persistent. For every five open CPA-required roles there are only about three qualified active candidates, pushing average time-to-fill for CPA roles to 73 days — 41% longer than comparable non-CPA positions. The Bureau of Labor Statistics projects roughly 120,000+ annual openings against far fewer graduates (one estimate puts it near 124,000 openings versus ~55,000 graduates). Qualified candidates often receive multiple offers within 10–14 days. The shortage is worsening year over year because each below-replacement graduating class compounds the gap, and meaningful pipeline relief from licensure reforms is still several years away.
Will the 150-hour rule change fix the CPA shortage?
It will help, but slowly. At least 23 states have adopted or proposed alternative pathways — typically substituting a second year of work experience for the traditional fifth year of education — and more are expected to follow. This addresses one major barrier to entry. However, rebuilding a talent pipeline takes years because new candidates still need to complete education, pass the exam, and accumulate experience. Firms should treat licensure reform as real long-term relief, not a near-term solution, and plan their staffing strategy around the talent realities of the next several years rather than waiting for the pipeline to refill.
How can accounting firms deal with the CPA shortage?
The most durable strategy is to shift from buying talent to building it. Specifically: hire for aptitude and trainability rather than for scarce experienced résumés; replace informal shadowing with structured, execution-based development that brings new hires to independent productivity in weeks; protect scarce senior staff by having a development system carry mechanical training instead of using top billers as full-time trainers; and build visible career pathways that retain high performers. Salary increases, outsourcing, and automation are useful supplements, but they don’t solve the core problem — that capable talent increasingly cannot be acquired externally and must be developed internally.
Is AI making the CPA shortage better or worse?
Both, in different ways. AI eases the shortage by automating routine transactional work — data entry, categorization, reconciliation — which reduces the headcount needed for production tasks. But it simultaneously worsens the profession’s development problem, because that routine work historically served as the “accidental training” through which junior accountants built judgment and pattern recognition. As automation removes those entry-level reps, firms can no longer rely on grunt work to develop rookies and must build judgment deliberately through structured training. AI handles the execution; it does not manufacture the professional judgment that execution used to teach.
Should firms hire inexperienced staff during the CPA shortage?
Yes — with the right infrastructure. Because experienced talent is genuinely scarce and expensive (three candidates for every five roles), hiring for aptitude rather than experience dramatically widens the candidate pool and avoids the bidding war. The catch is that this only works if the firm can reliably convert aptitude into capability, which requires structured development rather than informal shadowing. Firms that hire less-experienced staff and run them through a gated, execution-based training pathway can reach productivity in weeks and build long-term loyalty — while firms that hire inexperience without a development system simply recreate the capacity problem they were trying to solve.
Want to see what “build, don’t buy” actually looks like operationally — the development infrastructure that turns aptitude hires into capable staff in weeks?
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To your firm’s capacity,
Vincent Howard, CPA Managing Partner, Howard, Howard and Hodges Skillability for Accounting Firms
Vincent Howard, CPA has practiced public accounting since 1990. He holds a Master’s degree in Taxation, leads a 50-person multi-state firm, and built the Skillability staff development platform used by accounting firms nationwide through the PASBA network. His firm was named PASBA Firm of the Year.
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