Overcoming the Accounting Talent Shortage: Why CPA Firms Leverage Offshore and Hybrid Teams

Ask any CPA firm owner about the state of hiring, and they’ll likely give you a tired laugh before launching into their answer. The accounting talent shortage is no longer a nebulous, industry-wide myth - it’s a reality that firms are already grappling with in the day-to-day. Open roles sitting vacant for months, senior staff moonlighting at other firms, and the simple inability to take on new clients are just some of the harsh realities that the industry is being forced to reckon with.

But what does this mean for the future of CPA and accounting firms? Why are so many of them turning to offshore and hybrid staffing as an alternative?

Let’s unpack everything, from the root causes of the talent shortage to the long-term implications of hybrid staffing, and how your firm can benefit from it as well.

Why Accounting Talent Became So Hard to Find

There isn’t a single, easy answer as to why the accounting talent shortage took place - it’s the culmination of several factors that began several years ago. For starters, fewer students are graduating with degrees in accounting than there were a decade ago. Meanwhile, the baby boomer generation is quickly aging into retirement, and many of them hold senior positions that require extensive experience to fill.

On the other hand, the number of CPA candidates taking the exam has seen a steady decline in recent years, which means that the pool of qualified accounting professionals is also shrinking.

And yet, client demands continue to rise - firms are being pressed to take on more responsibilities, including CFO services and advisory work, with the same staff as before. Coupled with the pressure that many accounting professionals feel to move on from the industry, and you have a crisis: a growing number of roles going unfilled, including bookkeeping, staff accountancy, and payroll services.

What the Local Hiring Market Looks Like

When a firm begins the local hiring process, they can expect several hurdles ahead. For starters, it’s not uncommon for it to take months before a candidate is hired and trained. The salary expectations also rarely align with what the firm is prepared to pay.

New hires are also notoriously likely to quit within their first year, and senior staff often have to take on lower-level responsibilities in the meantime. And if a firm wants to scale up during the busy season, they have to invest in additional headcount - who will inevitably go unused for most of the year.

These are just some of the many reasons why offshore and hybrid staffing solutions are proving to be much more viable alternatives for CPA and accounting firms.

What Offshore and Hybrid Staffing Solutions Actually Are

An offshore team consists of a group of accounting professionals who perform a variety of services, including bookkeeping, tax preparation, payroll, and audit support. These experts are usually based in India and are hired as an extension of your firm. Meanwhile, a hybrid team consists of local and offshore staff, with the former handling higher-level tasks while the latter takes on more menial, repeat-based assignments.

Either way, offshore and hybrid staffing solutions provide CPA firms with a steady supply of bookkeepers, accountants, tax preparers, auditors, and payroll specialists without the hassle of the local hiring process.

Why Firms Are Switching to Offshore Staffing

It’s much faster

Instead of spending months on the hiring and onboarding process, you can have a fully trained offshore accountant ready to work in as little as a few days. This can make all the difference ahead of the busy season.

It’s much more cost-effective

When you factor in salary, taxes, benefits, recruitment, and training, offshore staffing solutions tend to be anywhere from 50 to 60% cheaper than hiring locally. Even if you only save 20%, those savings can be redirected elsewhere, such as into new software or marketing initiatives.

You can scale much more efficiently

Hiring full-time employees to handle seasonal surges in workload is incredibly wasteful. It’s much more efficient to simply scale your offshore or hybrid team up or down as needed, without the long-term commitment.

You effectively get an extra shift

Thanks to the time zone difference, offshore teams can work during the evening and finish their shifts early in the morning - local time. This means that you can get twice as much work done without having to hire additional staff.

Talent attrition stops being your problem

If a member of your offshore team quits, it’s your staffing partner’s problem, not yours. This significantly reduces the burden associated with team management while also reducing the risk of losing crucial expertise at the worst time.

Your senior staff can finally focus on higher-level tasks

By delegating menial tasks to your offshore team, you free up your senior accountants and CPAs to focus on higher-level matters that actually require human expertise. This can greatly improve your firm’s productivity and profitability.

Where Most Firms Begin Their Offshore Journey

It’s rare for a firm to jump right into hiring an entire offshore team from the get-go. Usually, companies begin by outsourcing a single role or function before moving on to others. The most common roles that firms outsource are as follows:

• Bookkeeping
• Staff/senior accountancy
• Tax preparation
• Payroll
• QuickBooks expertise
• Accounts payable
• Auditing
• Financial analysis

Outsourcing a Function vs. Building Your Own Offshore Team

There are two main ways to begin your journey with offshore staffing, and which one is right for you depends on your particular situation. The first option is to simply outsource an entire function to a third-party provider. You can, for example, outsource bookkeeping, accounting, payroll, tax preparation, or audit support to a company that specializes in these areas.

The second option is to build your own offshore team. This way, you can hire a group of experts that will work exclusively for you while following your internal guidelines and operating under your branding. This second option is best represented by our Build Your Team service.

Many companies opt for the first option before transitioning to the second, usually after they’ve identified which roles they need the most.

The Most Common Questions We Get Asked

Is it secure?

Any reputable offshore staffing provider will have appropriate security measures in place to ensure that your data is kept safe and secure at all times. This includes things like NDA agreements and data protection certifications.

Does it compromise on quality?

Not at all - the best offshore staffing providers employ experts who have extensive experience with the U.S. accounting and tax systems.

Will clients be able to tell the difference?

Not when you use a white-labeled solution, which is our preferred method. Your clients will continue to interact with your firm exclusively, which means that they won’t be aware of your offshore team’s existence.

When Should You Consider Offshore Staffing?

There are several telltale signs that suggest that offshore staffing might be a good fit for your CPA or accounting firm. These include:

• Roles being open for long periods of time
• Senior staff members having to take on menial tasks
• Firms having to turn away clients due to a lack of capacity
• Expenses steadily rising while revenues fail to follow suit
• The busy season becoming an unbearable burden for your staff

If you were able to recognize yourself in any of these scenarios, it’s time to seriously consider offshore staffing.

Where Do Firms Go From Here?

The accounting talent shortage isn’t going to disappear anytime soon, which means that the competition for the limited pool of local experts will only become cutthroat in the years to come. Firms that continue to rely on the local hiring model will continue to waste resources on a process that is notoriously slow and expensive.

At the same time, firms that build offshore and hybrid teams will be able to scale their operations much faster while simultaneously reducing their overhead expenses. This puts them in a much better position to grow their practice while continuing to provide high-quality service to their clients.

Exuberant Global helps CPA and accounting firms across the U.S. with offshore and hybrid staffing solutions. We specialize in building teams of bookkeepers, accountants, tax preparers, auditors, and payroll specialists. If you need help with offshore staffing, contact us to discuss the details of a free trial.