By Jennifer Rieman, OSCPA manager, public relations
Consolidation in the accounting profession is occurring at a rapid pace, according to a survey last year by the Global Accounting Alliance (GAA)
. The GAA, a group comprised of 11 of the world’s leading accounting institutes including the AICPA, identified five major challenges for firms as baby boomers exit.
The challenges are:
- Looming transition needs.
- Roadblocks on the path to leadership.
- Challenges for sole practitioners.
- Time constraints that impede planning.
- Problems with plan implementation.
A recent series of OSCPA Spotlight Videos with Gary Adamson, CPA, CEO of Adamson Advisory, a CPA practice management consulting firm, confirms the GAA’s findings.
Adamson identifies a variety of factors contributing to the current climate, including firm partners and sole practitioners that have neglected to build bench talent and have procrastinated in developing a succession plan.
“A lot of firms have frankly waited too long,” Adamson said. “Their options are perhaps more limited in terms of being able to accomplish succession inside their practice than they should be.”
The GAA’s survey found that interest in leadership often already exists within a firm. Fifty-two percent of those surveyed would be interested in advancement opportunities at their current firm, with 33 percent interested in ownership.
However, 26 percent are interested in becoming an owner in another firm or starting their own practice, a threat that looms large for firms struggling to retain talent. Developing a plan to build future leaders becomes imperative as boomers near retirement age.
“Too few firms have done a good job of building a recruiting process in their firm, a staff development process, and an inclusion process. It really takes all three.” Adamson said. “It’s not part time. It’s a significant commitment for the firm. You really have to develop a plan.”
Those best able to develop the next generation will be the most prepared to tackle the challenges of the future, according to Adamson.
“There are 76 million people in the U.S. in the baby boomer category,” Adamson said. “The oldest are 67 or 68. What I’m telling my clients is we’re just seeing the beginning of baby boomers retiring out of firms.”
Visit OSCPA’s Succession Planning Resources page for help, or contact OSCPA partners the Succession Institute and Accounting Practice Sales for exclusive savings on your succession planning needs.