By Sai Ishwarbharath B
BENGALURU (Reuters) -U.S. accounting firms including RSM US, Moss Adams, Bain Capital-backed Sikich and Apax (HN:IBC) Partners-backed CohnReznick are expanding their operations in India to tackle an acute shortage of accountants at home.
The surge in recruitment has started boosting enrolment in specialised commerce courses in India, and could establish Asia’s No. 3 economy as a hub for accounting talent, reminiscent of the 90s outsourcing boom that revolutionised the tech industry.
"This could be the breakthrough moment for public accounting firms in India," Balaji Iyer, managing partner at Moss Adams India, told Reuters. "Right now, the U.S. is facing a significant and growing shortage of certified public accountants, a trend that will only intensify in the coming years."
About 1.78 million people were working as accountants in the United States in 2024, about 10 percent fewer than in 2019, according to U.S. Bureau of Labor Statistics data, as many seasoned accountants retired without a reliable pipeline of qualified replacements.
The American Institute of CPAs (AICPA), the national body that conducts and grades qualifying exams and sets auditing standards for the profession, admitted a “talent pipeline issue” as it commissioned an independent study last year.
About half its members are over the age of 50.
“The accountant shortage is being acutely felt throughout the market," the National Talent Advisory Group study found, adding that several businesses such as toymaker Mattel (NASDAQ:MAT) reported a delay to annual reports and other key filings due to the shortage.
Accountancy - known for long hours, lower pay than many other finance jobs, and a rule effectively requiring a fifth year in university for CPA licensing - has also become unpopular with younger people.
"Fewer students are majoring in accounting, partly because the field is seen as less exciting than tech or finance, and automation has added uncertainty," said Rebecca Hann, associate dean of research at University of Maryland’s Robert H. Smith School of Business.
Hann published a research paper on the country’s accountant shortage last year.
RSM US aims to more than double its India workforce to 5,000 by 2027, the firm told Reuters.
Sikich also said it was increasingly hiring in India to fill vacancies for accountants and auditors, as well as tech talent to support its automation and AI-related efforts.
"Ultimately, it’s less about filling roles one for one and more about transforming how we deliver services, using both highly skilled talent and advanced technology to meet evolving client demands," said Bobby Achettu, principal at Sikich and India operations lead.
The firm has a 200-member team in India, accounting for around 10% of its global workforce.
Larger rivals Deloitte, EY, KPMG, and PwC, the "Big Four" of accounting, had a combined headcount of between 140,000-160,000 people in their India global capability centres (GCCs) as of 2024, according to market intelligence firm UnearthInsight.
The Big Four companies did not respond to emails seeking comment.
TALENT PIPELINE
The turn to India for accounting talent echoes similar moves in tech over the past two decades, where global companies including Walmart (NYSE:WMT), Microsoft (NASDAQ:MSFT) and JPMorgan Chase (NYSE:JPM) have set up offices in India to tap into the South Asian country’s engineering talent.
The U.S. Bureau of Labor has projected the number of accountant and auditor jobs will grow 6% from 2023 to 2033, outpacing the average for all occupations.
Some of the mid-sized accounting firms are so desperate to solve the recruitment gap that they are hiring direct from Indian campuses and even offering to sponsor CPA courses for their younger talent.
"First, it was the ’Big Four’ accounting firms. Then, mid-sized firms such as EisnerAmper and BDO also started hiring from us," said Biju Toms, Director, Department of Professional Studies at Christ University in Bengaluru.
That has boosted demand for specialised courses such as the college’s Bachelor of Commerce (International Finance), which got around 3,000 applications for the 120 available places.
"There is always the need for trained talent with industry exposure, and cost arbitrage into play, when you operate from India," Toms said. "So, similar to outsourcing in tech, accounting is a new area that is really opening up."