CPA Shortage Survival Guide: How Small Firms Win in 2025

The CPA shortage has become a survival-level threat for small tax practices. The accounting profession lost 300,000 professionals since 2020¹. Seventy-five percent of current CPAs are nearing retirement². Only 1.4% of college students now choose accounting as their major, down from 4% a decade ago³.

Big firms respond with money. EY announced a 10% salary increase as part of a $1 billion, three-year investment to fight the shortage⁴. National firms poach talent from smaller practices and drive entry-level salaries up 20-30% in a single year⁵.

If you run a small tax practice, you cannot win a bidding war against the Big Four. But you can win on different terms. This guide shows how small practices survive and grow during the CPA shortage by competing smarter, expanding capacity without hiring, and positioning your firm as the workplace that the next generation of accountants actually wants.

Table of Contents

• The Numbers Behind the Crisis
  • The Retirement Wave
  • The Pipeline Problem
  • The Mid-Career Exodus
• Why Small Firms Struggle Most
• Strategy 1: Expand Capacity Without Hiring
  • Automate the Work Everyone Hates
  • Outsource Strategically
  • Restructure Your Client Base
• Strategy 2: Compete for Talent Differently
  • Flexibility Over Salary
  • Career Development That Matters
  • Reduce the Burnout That Drives People Away
• Strategy 3: Retain the Team You Have
  • Fix the Tax Season Death March
  • Create Meaningful Work
  • Watch for Flight Risks
• Strategy 4: Expand Your Talent Pool
  • Hire Before the CPA
  • Look Beyond Traditional Backgrounds
  • Partner With Local Colleges
• The Technology Advantage
• Frequently Asked Questions

The Numbers Behind the Crisis

Three forces are converging simultaneously: retirements accelerating, new entrants declining, and mid-career professionals leaving for better opportunities elsewhere.

The Retirement Wave

The AICPA reports that 75% of current CPAs are at or near retirement age². This creates an estimated 136,400 annual job openings through 2034 from retirements alone³.

Some older practitioners looking to retire find no buyers or successors to take over their book of business⁶. This succession crisis means valuable client relationships dissolve when a firm closes its doors. Partners who spent decades mastering tax law and building relationships walk out with expertise that cannot be quickly replaced.

The Pipeline Problem

New talent is not filling the gap. CPA exam candidates dropped from 72,271 in 2021 to 67,335 in 2022, the lowest level since 2006⁷. Accounting graduates have decreased 20% since 2010³.

The 150-hour requirement for CPA licensure adds an extra year of college for many students. When graduates weigh that cost against starting salaries in tech or finance, accounting loses. The profession does not compete for top talent the way it once did.

Eighty-three percent of financial hiring managers believe the talent crisis will persist through 2025 and beyond². This is not a temporary shortage that will correct itself.

The Mid-Career Exodus

The shortage goes beyond retirements and pipeline problems. Mid-career professionals actively leave accounting for better opportunities elsewhere.

Accountants transition to higher-paying, more flexible roles in tech, private equity, and advisory services¹. The analytical skills that make someone a good accountant also make them valuable in data science, financial analysis, or consulting roles that pay more and demand fewer 80-hour weeks.

Burnout drives this exodus. According to CABA, 55% of accountants suffer burnout compared to 41% of peers in other sectors⁸. The combination of long hours, repetitive work, and seasonal intensity pushes capable people toward careers that offer better quality of life.

Why Small Firms Struggle Most

Large firms absorb the talent shortage by throwing money at the problem. Smaller firms cannot match this approach.

When EY increases salaries 10% across the board, a small firm faces a choice: match the increase and crush margins, or lose staff to competitors who can pay more. Neither option is sustainable.

Small firms also lack the brand recognition that attracts new graduates. When students graduate with accounting degrees, they know the Big Four. They may not know the excellent regional firm in their city that would offer better experience and faster advancement.

Some CPA firms have started turning away work or dropping smaller clients because they lack the capacity to serve them⁶. This is not a growth problem. It is a survival problem. Firms that cannot staff adequately cannot serve clients, and firms that cannot serve clients do not survive.

The remaining staff at understaffed firms burn out faster, creating a vicious cycle. When someone leaves, their workload shifts to colleagues who are already stretched thin. Those colleagues become flight risks themselves.

Strategy 1: Expand Capacity Without Hiring

If you cannot hire enough people, you need to do more work with the people you have. This does not mean working longer hours. It means eliminating low-value work so your team focuses on what actually requires professional judgment.

Automate the Work Everyone Hates

Manual data entry consumes nearly 40% of tax professionals’ time during peak season⁹. This typing work requires almost no professional judgment but eats hours that could go toward advisory services, complex planning, or simply going home at a reasonable hour.

AI agents and tax automation technology eliminate the mechanical work. Bank statements, checks, receipts, and tax forms get processed automatically. Your staff reviews and approves rather than typing line by line.

Firms that automate tax document processing see an 85% reduction in processing time and a 40% increase in return capacity without adding headcount¹⁰. That capacity expansion means you can serve more clients with your current team or serve the same clients with less overtime.

The economics work: automation platforms cost $3,000-$12,000 per year while freeing up $30,000+ in staff time. More importantly, you stop losing people to burnout caused by repetitive work.

Outsource Strategically

Seventy-seven percent of accounting firms are considering or already employing accountants working remotely from other countries to address the shortage¹¹. Nearshore and offshore resources handle bookkeeping, data entry, and basic return preparation.

Strategic outsourcing keeps your local team focused on high-value work: client relationships, complex tax planning, advisory services. You maintain quality control and client communication while tapping global talent for production work.

The key is choosing what to outsource carefully. Keep client-facing work local. Keep complex judgment calls local. Outsource the standardized, repeatable work that follows clear procedures.

Restructure Your Client Base

Not all clients deserve the same level of service. Segment your client base by complexity and profitability.

High-value clients with complex needs get your best people and personalized service. These relationships drive your firm’s reputation and margins.

Simple returns from price-sensitive clients get streamlined through automation and standardized processes. You still serve them well, but you serve them efficiently.

Some clients may need to go. The orphan 1040 clients who demand high-touch service for low fees consume capacity that could serve more profitable work. During a staffing crisis, you cannot afford clients who lose you money.

Strategy 2: Compete for Talent Differently

You cannot outbid national firms on salary alone. But salary is not the only factor driving career decisions, especially for younger professionals.

Flexibility Over Salary

Research shows that hybrid and remote work arrangements reduce turnover intentions in accounting firms¹². Younger professionals prioritize flexibility over marginal salary differences.

A candidate choosing between $85,000 at a large firm with mandatory office attendance and $80,000 at a small firm with flexible work arrangements often picks flexibility. The salary difference matters less than the ability to manage their own schedule.

Alternative work arrangements include remote work options, compressed workweeks, flextime, and results-based evaluation rather than hours-based evaluation. Firms implementing flexible options report reduced burnout and increased employee satisfaction¹².

You create competitive advantage through culture rather than compensation.

Career Development That Matters

Younger professionals seek employers whose values align with their own and who offer genuine growth opportunities¹². Generic promises about career advancement do not convince anyone.

Specific development opportunities that attract talent include mentorship from experienced partners, training on emerging technologies, exposure to complex client situations, clear advancement paths with defined milestones, support for CPA exam preparation, and conference attendance.

Small firms have an advantage here. In a large firm, a new hire might spend years preparing workpapers before touching complex work. In a small firm, they can work directly with partners on challenging projects within months.

Sell that advantage explicitly. Tell candidates: here, you will work on real problems with experienced professionals who want to develop you. You will not be anonymous.

Reduce the Burnout That Drives People Away

Burnout is the number one reason mid-career accountants leave the profession. If your firm is known for brutal hours and soul-crushing busy seasons, you will struggle to hire regardless of salary.

Early-career resilience development reduces burnout and turnover intentions¹². Invest in realistic workload expectations, genuine time off after busy season, mental health resources, and permission to say no to unreasonable client demands.

The small firm advantage here is direct relationships. You can actually know if your team is struggling. You can adjust workloads before people burn out. Large firms cannot offer that attention.

Strategy 3: Retain the Team You Have

Recruiting matters, but retention matters more. Every person who leaves costs you recruitment fees, training time, and client relationship disruptions. Keeping your current team is the highest-ROI staffing strategy.

Fix the Tax Season Death March

The traditional tax season model where everyone works 70-80 hours per week from January through April destroys people. Staff dread it for months beforehand and need weeks to recover afterward. Some never recover and simply leave.

Alternatives exist: year-round tax planning that spreads work more evenly, extension strategies for clients who can wait, surge staffing through contractors during peak season, earlier client document collection to front-load work, and technology that reduces per-return hours.

The firms that eliminate the death march become known as good places to work. Word spreads. Candidates seek you out. Retention improves. The initial investment in process change pays dividends for years.

Create Meaningful Work

People do not leave jobs that feel meaningful. They leave jobs that feel like typing into spreadsheets forever.

Shift staff toward advisory work as you automate and outsource production work. Let them solve problems, advise clients, and use professional judgment. This is the work they trained for and the work that provides satisfaction.

Involve staff in firm decisions. Ask their opinions on technology choices, process improvements, and client strategies. People stay at firms where they feel valued as professionals, not interchangeable resources.

Watch for Flight Risks

The accountant who is quietly updating their LinkedIn profile and taking long lunches is already halfway out the door. By the time they give notice, it is too late.

Watch for warning signs: decreased engagement in team activities, minimal effort beyond basic requirements, complaints about workload or compensation or growth opportunities, and sudden interest in networking events.

Have honest conversations before resignation becomes inevitable. Sometimes a flight risk just needs acknowledgment of their concerns and a clear plan to address them. Sometimes they need a raise. Sometimes they need different work. Find out before they find a new job.

Strategy 4: Expand Your Talent Pool

If traditional accounting graduates are scarce, look beyond traditional candidates.

Hire Before the CPA

The CPA credential matters, but it should not be a prerequisite for every role. Many firms now use skills-based assessments to identify candidates who can contribute immediately while working toward certification².

Hire promising candidates without CPAs and support their exam preparation. Pay for exam fees, provide study time, offer bonuses for passing. You get loyalty from staff you developed, not staff you poached.

Roles that do not require CPA certification include tax preparation assistants, bookkeepers, client service coordinators, technology specialists, and marketing and business development staff. Fill these roles with capable people and let your CPAs focus on work that actually requires the credential.

Look Beyond Traditional Backgrounds

Career changers from finance, banking, and data analysis bring valuable skills to accounting firms. Someone with five years of financial analysis experience can learn tax preparation faster than a new graduate learns business fundamentals.

Veterans transitioning to civilian careers often have the discipline, attention to detail, and problem-solving skills that accounting demands. Military experience builds exactly the traits that make good accountants.

Parents returning to the workforce after time away often want flexible, part-time arrangements that larger firms will not offer. A talented accountant working 25 hours per week is more valuable than an empty desk.

Partner With Local Colleges

Build relationships with accounting programs at nearby colleges before students graduate. Offer internships, speak in classes, sponsor events. When these students start job hunting, your firm is already familiar.

Community college programs often train excellent candidates who are overlooked by firms focused on university recruiting. These students may cost less to hire and show more loyalty than candidates with multiple competing offers.

Advisory boards for accounting programs give you visibility with faculty and students while helping you understand what the next generation wants from employers.

The Technology Advantage

Technology is the equalizer that lets small firms compete with larger competitors during the talent shortage.

The math is simple: if technology lets each staff member handle 40% more work, your five-person team now has the capacity of a seven-person team. You hired two people without actually hiring anyone.

Bank statement and check automation eliminates the highest-volume, lowest-value work in most tax practices. Modern practice management software automates client communication, document collection, and workflow management. See our platform comparison for specific recommendations.

Cloud-based systems let staff work from anywhere, expanding your geographic talent pool beyond commuting distance. A great candidate who lives 50 miles away becomes viable when they can work remotely.

Technology investments also signal to candidates that your firm is modern and forward-thinking. Nobody wants to join a firm stuck in paper-based processes when they could work somewhere that embraces current technology.

The firms that survive the talent shortage will be those that use technology to expand capacity while creating workplaces where people actually want to stay. See our complete guide to tax practice operations and technology modernization for a 90-day implementation roadmap.

Frequently Asked Questions

How long will the CPA shortage last?

Industry experts project the shortage will persist through at least 2030. The AICPA reports 136,400 annual job openings through 2034 just from retirements³. With accounting program enrollment continuing to decline, the shortage has no near-term resolution.

Can small firms really compete with Big Four salaries?

Not on salary alone. But research shows younger professionals prioritize flexibility, meaningful work, and career development over marginal salary differences¹². Small firms can win by offering what large firms cannot: direct partner access, varied work, flexible arrangements, and faster advancement.

What is the fastest way to expand capacity without hiring?

Automation delivers the fastest ROI. Firms that automate document processing see 85% reduction in processing time and 40% capacity increases¹⁰. Most automation platforms pay for themselves within 2-4 months through time savings.

Should I raise prices to compensate for higher staff costs?

Yes, but strategically. Price increases on complex, high-value work are easier to implement than on commoditized simple returns. Consider tiering your service model: premium pricing for full-service clients, streamlined pricing for clients who want efficient, technology-enabled preparation.

How do I know if my team members are flight risks?

Watch for decreased engagement, minimal effort beyond requirements, sudden interest in networking, and complaints about workload or growth opportunities. Have proactive conversations before resignation becomes inevitable. Sometimes retention just requires acknowledging concerns and creating a clear plan.

Is outsourcing accounting work risky?

Outsourcing carries risks if implemented poorly. Keep client-facing work and complex judgment calls local. Outsource standardized, repeatable production work with clear procedures. Maintain quality control through review processes. Choose outsourcing partners with accounting-specific experience and security certifications.

Stop losing capacity to manual work and burnout. See how Conto automates the tedious document processing that consumes your team’s time and drives your best people to leave.