The eighth annual 2022 NYSSCPA-Rosenberg Survey identifies trends from the national 24th Annual Practice Management Survey and provides profitability and growth data of participating New York CPA firms. This survey reflects how our profession has met the challenges during the coronavirus (COVID-19) pandemic, which, for a second year, has transformed the workplace unlike anything else in professionals’ memory. The survey data reflects trends and performance from 2021. The second part of the survey presents current analysis and conclusions from leading national experts and practice management consultants on how accounting firms have adapted to the acute and continuing challenges of COVID-19. As Marc Rosenberg of the Rosenberg Survey remarked, “Working remotely and its wide-ranging challenges may be the biggest game-changer to the CPA industry since 1978 when the CPAs were allowed to solicit business. Remote work can no longer be described as a trend because it’s here to stay.” This year’s Rosenberg Survey provides valuable analysis, guidance, expert insight, and practical recommendations for CPAs on how to adapt and thrive during this crisis, as well as how to plan for what comes next.
The results of the national 24th Annual NYSSCPA-Rosenberg Practice Management Survey provided many key takeaways for CPAs in public practice during the continuing coronavirus (COVID-19) pandemic:
- Economic growth. According to the survey, the accounting profession had a banner year! During this time, revenue was up 9.5%, the largest increase since 2007, and income per partner was up 12.0%. There is no doubt that 2021 was an incredible year from an economic standpoint; however, the challenges of running a CPA firm—keeping up with technology, hiring qualified candidates, retaining star team members, and serving clients—continue to grow.
- Alternative workforce. This is the term that Charles Hylan of the Rosenberg Survey uses to describe firms that are outsourcing, onshoring, and offshoring. More CPA firms than ever this year either increased their usage of an alternative workforce or said they are getting serious about going down this path.
- Compliance to advisory. Firms have been easing down this path for a while, but they are now picking up the pace. Clients are demanding more than traditional accounting services and the fees for traditional services are getting more and more competitive. Furthermore, it is easier to hire people in certain advisory areas. Finally, the shift to advisory is one of the biggest reasons why private equity is entering the accounting profession.
- Non-traditional hires. According to Rosenberg, firms increasingly are hiring “solid team members” who do not necessarily have accounting degrees nor any desire to pursue a CPA license. For example, as client accounting services (CAS) continues to grow, firms are hiring smart, detailed-oriented people who can use technology.
- Average age of partners. The percentage of partners over the age of 60 increased from 24% to 25% (see Exhibit 4). In other words, one-quarter of accounting firm partners are near or past many retirement age or a mandatory retirement requirement. According to a recent NPR podcast, Going Concern’s Adrienne Gonzalez said that a staggering 75% of AICPA members became eligible for retirement in 2020 (referring to this AICPA exposure draft, https://bit.ly/3uLAFPi).
- Gender mix and percentage of female partners. There continues to be an upward trend in the percentage of female equity partners, across firms of all sizes, as well as a steady increase from 2011 and 2021 in the number of women in leadership positions. The staff mix this year of 54% female and 46% male, however, still remains distant from the 21% female partners in all size firms. The greatest growth in female partners, at 39%, is found within firms between $2 million and $5 million in size. To read the study, click here.