Top Challenges Accounting Firms Face – Blog Series Part 1 – Burnout

In the modern world of finances and accounting, where staying ahead of the curve is essential, the year 2024 brings with it a new set of challenges for firms. Challenges are a part of the process, and industries must be at the forefront to handle these.

Challenges often bring opportunities; hence, creating a suitable environment that supports the well-being of employees is the first step firms can take to gain an edge over the competitive market.

Among these challenges, burnout is a prevalent issue affecting morale, productivity, and overall well-being. This challenge has been recognized by leading financial institutes, revealing many factors affecting the state of accountants and professionals. Working in finance and accounting can be lucrative and rewarding, but it is also known as the most exhausting job across all levels of the organization.

Tax Season has just ended. Accountants and financial firms must look for ways to mitigate the tax season burnout to cool down and find their rhythm back before the next season starts.

Here, Ace Cloud has created a series of blogs to explore the common challenges accounting firms are facing and how to tackle them. In the first blog, we delve into the phenomenon of burnout, its causes, and potential solutions to help firms navigate this pervasive problem effectively. Let’s get into it.

Understanding Burnout

Burnout is more than just physical tiredness or feeling stressed; it is the feeling of weakness, emotionally, and mentally, caused by continuous exposure to stress and excessive workload in the workplace.

It often manifests as feelings of detachment and a reduced sense of accomplishment, ultimately leading to decreased employee productivity and satisfaction.

Back in 2022, there were approx. 1.65 million accountants and auditors registered nationwide, a 15.9% less number from 2019. Professionals with more than six years of experience have a bigger number of people leaving their profession due to various factors, burnout being a major one among them.

The worry is that more than 75% of experienced CPAs reached retirement age in 2020.

Causes of Burnout

Several factors contribute to burnout in the workplace, including:

Excessive Workload

Overburdening employees with an unreasonable workload can quickly lead to burnout as they struggle to meet demands and deadlines. This issue is becoming quite common in the industry due to a shortage of accountants. With the rising financial requirements and decreasing number of professionals, the workload is dumped upon the existing accountants available. Retiring seasoned experts, lower enrollment, and fewer new entries into the CPA program have contributed to the shortage of accountants.

• Lack of Work-Life Balance: A blurred boundary between work and personal life can intensify burnout, leaving employees feeling overwhelmed and unable to recharge outside of work hours. Increased workload and scheduled tight deadlines push employees to work for long hours, creating an imbalance in their lives, resulting in fatigue and mental tiredness.
• Poor Management: Lack of leadership skills, micromanagement, and manager support can contribute to stress and frustration among employees, leading to burnout. Employing stringent policies within the firm that are not aligned with the employees’ well-being creates distrust among them. It also pushes mental breakdown and sometimes creates chaos in the office environment.
• Unclear Expectations: Ambiguity regarding job roles, responsibilities, and expectations can create confusion and anxiety, contributing to burnout as employees struggle to meet undefined goals. Changing roles and expectations in the middle of the financial year, though justified from the management’s angle, without any explanation, can also cause skepticism in employees’ eyes.

Impact of Burnout

The consequences of burnout extend beyond individual employees and can have significant implications for firms, including:

• Decreased Productivity: Burnout harms cognitive function, creativity, and problem-solving abilities, leading to decreased productivity and performance in the workplace.
• Increased Attrition: Employees experiencing burnout are more likely to seek opportunities elsewhere, leading to higher churn rates and increased recruitment and training costs for firms.
• Diminished Morale: Burnout creates a negative working environment, indicated by low morale, a lack of motivation among employees, and disengagement, further enhancing the burnout cycle.
• Negative Reputation: Accounting firms with higher burnout rates will also develop a negative reputation, creating issues in hiring new clients and employees.

Addressing Burnout

Accounting and CPA firms must be at the forefront of acknowledging and addressing these challenges as soon as possible. Though burnout is a universal challenge and presents a complex challenge for firms across the world, there are numerous steps they can take to mitigate its impact and cultivate a healthier work environment –

Promote Work-Life Balance

Encourage employees to prioritize self-care, set boundaries, and disconnect from work during non-working hours to prevent burnout. Introducing various activities such as nature retreats and meditation allows employees to take a break from their hectic working environment.

Offer resources such as employee assistance programs, mental health resources, and stress management workshops to support employees experiencing burnout.

Clarify Expectations

Clarity in work processes and streamlined SOPs create a sense of assurance and set up a fixed timeline in the eyes of employees. They are ready for tasks and can manage unforeseen requirements as well when working in a streamlined fashion.

Ensure that job roles, responsibilities, and performance expectations are clearly communicated to employees to reduce ambiguity and alleviate stress.

Foster a Positive Work Culture

Rewards and recognition, often formalized in an appraisal letter, are a part of corporate culture. This develops a ‘feeling of wanted’ among the employees. Acknowledging their work boosts morale and encourages employees to work even better and gain newer heights. Cultivate a supportive work culture characterized by open communication, collaboration, and recognition of employee contributions to promote well-being and prevent burnout.

Provide Necessary Tools and Learning

Accountants often need several tools to execute their daily tasks, streamline operations, and collaborate with multiple stakeholders, such as clients, partners, and offshore teams. Providing a common cloud workspace for QuickBooks and other accounting applications can bring these stakeholders on the same platform, allowing them to collaborate in real time. This can result in faster decision-making and improved productivity, eliminating several manual tasks and communication gaps.

Conclusion

In conclusion, burnout remains a pressing issue for accounting firms in 2024, with a profound impact on productivity, morale, and employee retention. By understanding the causes of burnout and implementing strategies to address it effectively, firms can create a healthier, more sustainable work environment for their employees and position themselves for long-term success in the ever-evolving business landscape.

Stay tuned for the next installment in our series as we explore other problems firms are facing in 2024 – “Keeping with the Technology and Trends”.