Top Takeaways from the 2024 Rosenberg Survey & What’s Ahead

When The Rosenberg Survey is being compiled, CPA consulting leaders are asked to provide insights and perspectives annually. Rosenberg Associates’ Kristen Rampe, Marc Rosenberg, and Matt Rampe were among the 16 CPA firm consultants who contributed this year. Here’s what they had to say about the past 12 months and predictions for this year.

Question: How would you assess the last 12 months? Trends? Observations? Struggles?

Answers:

Matt Rampe, Rosenberg Associates

In the last year, getting work was easy, but getting it done was hard. While business was knocking on the door for CPAs, staffing challenges persisted. Some hope came from the AICPA’s National Pipeline Advisory Group, which highlighted multiple ways we can improve the inflow of talent into our industry, but they did not have a short-term solution. Firms were able to improve their capacity, though, with outsourcing, technology and culling of clients.

The other big trends that continued to impact the industry were private equity and artificial intelligence. Wider adoption of both accelerated, but the amount of hype versus the value that each will bring is yet to be determined.

Kristen Rampe, Rosenberg Associates

There has been a slight easing of the staffing crisis, though it is far from resolved. Some firms say they now have the number of people they need or can find talent (in some cases filled by offshore resources). However, the quality and productivity of the team is a concern. Senior partners are hoping to retire and hearing crickets when they ask who wants to be next in the partner role. The long-term nature of investing in people development, or lack thereof in some instances, is coming back to haunt some firms and adding fuel to the M&A scene.

The talent pipeline remains a top concern in the profession. Redesigning our profession to be enticing to students exploring career options is imperative to our long-term success as an industry and as individuals. We need to remove barriers, increase newer employee earnings, and align our branding with the value we add.

Marc Rosenberg, Rosenberg Associates

I believe 2003-2007 was the Golden Age of the CPA profession because the robust increases in revenues and profits were never better. The early and mid-2020s will be named by someone much more clever than me, but many of us feel these current years of prosperity have eclipsed the Golden Age. Paradoxically, firms are still frustrated by too much business and with too few staff.

There are three areas currently causing disruption in our industry:

1. The dire shortage of staff and the dramatically reduced number of students majoring in accounting. No one expects this to change anytime soon. The unprecedented boom in revenue and profits coupled with staff shortages have pushed CPA firms to do two things they should have been doing all along: (a) pruning their client base and (b) raising prices. The labor shortage has forced firms to develop creative, innovative strategies for finding people such as outsourcing and hiring non-accounting majors to supplement entry-level accounting grads. Finally, we are beginning to see some firms address the embarrassing situation for our profession where starting salaries for accounting staff, once one of the highest of any undergraduate major, have failed to keep pace with other business disciplines. Utterly shocking.
2. Private equity. CPA firms, for the most part, have a “wait and see” attitude toward selling to private equity firms versus mating with other CPA firms. There continues to be a fair amount of PE activity, mostly with Top 50 firms. Like all “big company” activities, they will eventually trickle down to smaller firms. Actually, this has already started. One thing that PE transactions have made abundantly clear, and something I’ve been saying for 20 years: CPA firms are worth way more than the piddly one times fees (or less) that has typified CPA sales for decades.
3. Artificial intelligence. One can’t read an industry publication or attend a conference without speakers and attendees buzzing about AI. The typical local CPA firm would love for AI to make its long anticipated impact in our world, but many are still waiting. Make no mistake: AI is coming. It’s not a matter of if, but when.

A final item of note is the sea change we are seeing in firms adopting a corporate governance model, moving away from the archaic, old-school partnership framework.

Question: How do you think the next 12 months will unfold? Trends? Predictions? Other thoughts?

Answers:

Matt Rampe, Rosenberg Associates

The staffing struggle won’t turn around overnight. Firms that want to succeed need an intentional strategy on recruiting and retaining talent.

Private equity and technology will continue to advance. This will create a more competitive landscape, with more firms innovating on all aspects of the traditional CPA firm model.

Firms that focus on delivering value to their clients (particularly to a focused niche) instead of taking compliance work that walks in the door will have an advantage and are more likely to maintain their long-term viability.

Kristen Rampe, Rosenberg Associates

I anticipate more interest in exploring AI and offshoring for small- to mid-sized firms. As new use cases and case studies of success come online, late adopters will start to dabble in these important developments.

Strong local and regional firms will continue to thrive, though they will face the continued pressure of offers from CPA firm buyers and PE. Many fiercely independent firms will continue on their own path. Of those, plenty will remain successful, but not all, and depending on where the hearts, minds and financial goals of the owners are, they might find interest in entertaining these offers.

Firms that wish to stay their own course will invest properly in developing the next generations of leaders – from ones at their own firm, to ones in middle school who need to hear what our profession is about and how they can (and would want!) to be a part of our work.

Well-known and well-respected within the national CPA profession, The Rosenberg Survey has a long-standing reputation for accuracy, thoroughness, and high participation rate. AccountingToday calls it “the industry’s barometer for CPA firm practice management.” Purchase your copy now!

Top Ten Takeaways

Here are ten key takeaways compiled from all the comments of the 16 top consultants who were asked to provide their perspectives:

1. Fee and rate increases have continued
2. Putting a corporate approach into how firms make decisions
3. Talent shortages and pipeline crises continue; National Pipeline Advisory Group’s (NPAGs) comprehensive Pipeline Strategy Report is taking a look at solutions to attract people to a career in accounting
4. Outsourcing and offshoring becoming a near must-have for small and mid-sized firms
5. Technology, including AI and increasing firm cybersecurity
6. Client culling to improve firm capacity; softening on capacity in certain service areas
7. Private equity and M&A as a growth strategy
8. Hiring non-CPAs
9. Remote vs. maintaining a physical office
10. Ever-changing regulatory landscape

If you want to see The Rosenberg Survey’s full results and analysis, purchase your copy now.

Note: The Growth Partnership compiles the Rosenberg Survey. This is the 26th year of the survey, which reports on 2023 data.