In response to the ongoing accounting talent shortage in the United States, several US-based accounting firms are expanding their operations in India. Firms like RSM US, Moss Adams, Sikich, and CohnReznick are ramping up hiring efforts in India, aiming to fill the growing gap in the accounting profession at home. This expansion marks a significant shift in how global firms are addressing the shortage of certified public accountants (CPAs) in the US, by leveraging India's skilled workforce and cost advantages.

The CPA Shortage Crisis in the US
As of 2024, accountants in the US are facing a dwindling supply, with a 10% decrease in the number of professionals since 2019. According to data from the US Bureau of Labor Statistics, around 1.78 million people were employed in the accounting field, down significantly from previous years. The root of the issue lies in the aging workforce, as many senior accountants retire without a sufficient pipeline of qualified younger replacements.

The American Institute of CPAs (AICPA) has acknowledged the severity of this talent shortage, launching studies that highlight how the issue is affecting businesses. In some instances, companies like Mattel have faced delays in filing annual reports due to a lack of available accountants. The shortage is compounded by the profession's long working hours, relatively lower pay compared to other finance roles, and the rigorous requirements for obtaining CPA certification, which includes an additional year of university education.

India's Role in the Solution: A Growing Accounting Hub
With the US accounting industry struggling to meet its staffing needs, India has become a critical partner in the global accounting workforce. India’s rapidly growing pool of talented individuals, especially in specialized fields like commerce and finance, offers a cost-effective solution to fill the gap. As accounting firms increasingly turn to India to outsource work, the country is poised to replicate the success it achieved in the IT outsourcing industry during the 1990s. Just as India became a hub for tech talent, it is now evolving as a key player in the accounting outsourcing sector.

Several accounting firms have set up or expanded Global Capability Centers (GCCs) in India to tap into this talent pool. For example, RSM US plans to increase its workforce in India to 5,000 employees by 2027, while Sikich has already established a 200-member team in the country, representing around 10% of its global workforce. These firms are not only hiring accountants and auditors but also focusing on building teams of tech talent to drive automation and AI-related efforts in their operations.

A Boost to Local Education and Career Opportunities
The demand for accounting talent has had a direct impact on enrolment in specialized commerce courses across India. Universities are reporting a surge in applications for courses like Bachelor of Commerce (International Finance), which cater to the growing demand for trained accounting professionals. Christ University in Bengaluru, for example, has seen a rise in applications for its commerce programs, with 3,000 students applying for only 120 spots in a single course. This reflects the growing interest in accounting careers as global firms expand their presence in the country.

Key Drivers of Growth in Accounting Recruitment
The appeal of accounting as a career is increasing in India for several reasons. The country’s young, skilled workforce provides a cost-effective alternative to the high salaries required for accountants in the US. Additionally, many firms are offering sponsorships for CPA courses, encouraging young professionals to pursue further education in the field. For example, some mid-sized firms like EisnerAmper and BDO have started hiring directly from Indian campuses, further fueling the demand for specialized commerce degrees.

This new wave of recruitment is reshaping the accounting landscape, providing young professionals in India with unique career opportunities that were once predominantly available in Western countries. The added incentive of international exposure through the global networks of these accounting firms further enhances the appeal of accounting as a career choice for India’s youth.

The Impact of Automation and AI on Accounting
As the demand for accounting services continues to grow, firms are also increasingly incorporating automation and AI technologies into their operations. Firms like Sikich are actively working to integrate advanced technologies to enhance their service delivery models, combining highly skilled talent with cutting-edge technology. This shift not only addresses the talent shortage but also improves efficiency in handling increasingly complex accounting tasks.

The integration of AI and automation is expected to redefine the accounting profession by automating routine tasks, allowing accountants to focus on higher-level work. This change is likely to create a more dynamic and tech-savvy workforce in India, which could become a key differentiator in the global accounting sector.

Conclusion: India’s Rise as an Accounting Talent Hub
India is on the verge of becoming a global hub for accounting talent, much like it did with IT outsourcing in the 1990s. The expansion of US-based accounting firms into India, combined with the surge in recruitment and education investments, signals a new era for the profession in India. As firms continue to tap into India’s highly skilled workforce, the country’s accounting sector will likely continue to grow, providing fresh career opportunities for young professionals and addressing the talent gap faced by firms in the United States.

With accounting firms embracing India’s workforce to meet the growing demand for services, this transformation will not only reshape the future of accounting but also position India as a critical player in the global accounting services market.

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