Yet another sign that the economy may be showing signs of recovery is the top concern of the majority of CPA firms – how to attract and retain qualified people as a foundation for growth.  The exception to this are the firms operated by sole practitioners, whose primary concern is the continuing complexity of tax laws and keeping up with the changes.

That’s the conclusion of the 2015 “CPA Firm Top Issues Survey” conducted by the American Institute of CPAs via its Private Company Practice Section (PCPS).  The survey, conducted every two years, is segmented by firm size – from sole practitioners to firms with 21 or more professionals.  The online survey was conducted this year among 776 respondents of that practice section from April 21, 2015, to May 15, 2015, by Mktg. Inc. The margin of error of the survey was plus or minus four percentage points.

In the years from 1997 (when the survey debuted) to 2007, recruiting and retaining staff was a key issue.  In the 2009, 2011 and 2013 surveys, more emphasis was placed on client retention and succession planning for retiring partners – a reflection of the onset of the 2007 recession.  Another concern in the top five for public accounting firms is the seasonality and workload compression in this year.  The AICPA says this may be a reflection of the lessened service from the IRS during the past tax season, which shifted a greater burden of work onto tax return preparers.

Here’s the list of top 5 concerns, segmented by firm size:

Sole Practitioners:

• Keeping up with changes and complexity of tax laws
• Seasonality and compression of workload
• The effect on firms caused by new Federal and State regulations
• Succession planning
• Bringing in new clients

In the 2013 survey, top concerns of this demographic were:

• Keeping up with changes and complexity of tax laws
• Succession planning
• Finding qualified staff
• Bringing in new clients
• Seasonality/workload compression

Firms with 2-5 professionals:

• Finding qualified staff
• Keeping up with changes and complexity of tax laws
• Succession planning
• Seasonality/workload compression
• The effect on firms caused by new Federal and State regulations

Top concerns in 2013 included:

• Keeping up with changes and complexity of tax laws
• Succession planning
• Finding qualified staff
• Bringing in new clients
• Seasonality/workload compression

Firms with 6 – 10 professionals:

• Finding qualified staff (at all levels)
• Succession planning
• Retaining qualified staff (at all levels)
• Seasonality/workload compression
• Aging of owners/partners

Firms with 10 – 20 professionals:

• Retaining qualified staff (at all levels)
• Finding qualified staff (at all levels)
• Succession planning
• Bringing in new clients
• Seasonality/workload compression

Firms with 21 or more professionals:

• Retaining qualified staff (at all levels)
• Finding qualified staff (at all levels)
• Owner/partner accountability and unity
• Seasonality/workload compression
• Succession planning (tied with)
• Bringing in new clients

Though the complexity of laws was a concern for the majority of CPA firms – those with 10 or fewer professionals – the category was somewhat generic compared with 2013, when these smaller firms were specifically concerned with the difficulties that might ensue one the Affordable Care Act was more fully implemented in 2014.

The shift in the top concerns provides a view of how the industry has changed in recent years in response to market conditions.  Beginning in 2007 and through the 2009 survey, the emphasis shifted from how to manage growth and client needs to building strategies that would enable CPA firms to survive in the long term.  By 2013, consolidation and firm failures had largely peaked, leaving the survivors stronger and more prepared to engage in strategic foundation-building. Client Collections, which was among the top ten issues for all but the largest firms in 2011, did not make any top ten list in 2013.

“Putting the economic uncertainty of the past few years behind them, CPA firms clearly have an eye on the future — and on future growth,” the survey report said.

The survey for 2015 contained fewer general observations than in previous years.  However, the AICPA/PCPS website provides resources to assist firms in tackling their issues, including the PCPS Succession Planning Resource Guides, Partner Accountability and Unity Guide and Action Plan, and Leadership and Partner Retreat Guide.

As in previous years, the issues themselves were largely consistent among all CPA firms, and are likewise consistent from year to year. What does change each year is the order that each issue holds with firms of various sizes.

A copy of the 2013 survey is available for comparative purposes here.