Kula Consulting Blog

Please forgive me for posting this number crunching blog, but I cannot help it!  I spent about fifteen years in accounting before getting in the placement business, and always seem to be the person in this business that takes on the “number” tasks.  Hopefully, some of you reading this also appreciate knowing the facts and figures I’m about to relate.  If you just want to cut to the chase, skip down to the last two paragraphs!  I did the following analysis in an attempt to quantify the supply of CPA’s for the San Francisco Bay Area market.  Since the sole purpose of Kula Consulting is to place technical accounting and tax professionals (CPA’s) with Bay Area companies and firms, it’s important for us to know where and how many CPA’s there are.

In California

From November 1, 1999 to November 30, 2009, the California Board of Accountancy has issued about 28,500 CPA certificates.  That’s for the whole state, and for “A” and “G” licenses and for transfers from out of state.  In the past year the State issued about 3,500 certificates. So, in ten years we have produced 28,500 CPA’s in California.  This means that when a client asks us to find a CPA with three to five years experience, we have about 9,000 possible candidates, maximum, in the whole state to recruit.  If the client also wants candidates with a tax background, the recruit pool drops to about 4,500.  With Big 4 firm experience?  Drop it to less than 2,000 possible choices.  Take out the “happy” people who are not looking for new opportunities and the total talent pool drops to less than a thousand people in the state.  If the client wants time in both Big 4 and “industry”, the talent pool who might be interested in making a job change drops even further.  Let’s not even talk about adding a Master’s in Tax requirement, as the talent pool is really going to be shallow.

In the Bay Area

Let’s look at the talent pool for CPA’s with less than twelve years and at least two years experience who currently work in the San Francisco Bay Area. To do this we need to take out the CPA’s in San Diego, Orange, Los Angeles, and every other non-Bay Area counties from the 28,500 CPA’s in California (check it out on the state board of accountancy website).  My calculation came up with roughly 10,500 to 11,000 people who fit the profile. Obviously, the total number of CPA’s is higher when the years of experience level is raised, but the Bay Area grand total is less than 30,000 CPA’s when the time frame is expanded to thirty plus years.  So, let’s break down the11,000 people in the two to twelve year segment some more:

1. At least 3,500 of them are working for a CPA or professional services firm.
2. The split between tax and audit professionals is 35% to 40% tax and 60% to 65% audit/technical accounting backgrounds.  That works out to be roughly 4,100 tax and 6,900 audit/technical people by primary discipline.
3. About 5,100 of the 11,000 total have a combination of public accounting and “industry” experience.  About 1,800 tax professionals and 3,300 technical accounting people.  Almost half of this group have between nine to twelve years experience, most are manager level and above.
4. Roughly 30% to 35% of accounting professionals change jobs per year (about a three year per job average).  This means that AT MOST 1,450 tax and 2,450 technical accounting professionals with two to twelve years of work experience will change jobs in a year.  Of these totals, 650 tax and 1,175 technical accountants have a combination of public accounting and “industry” experience.
5. The numbers go even lower when only the top 25% of these people are considered acceptable.  There will be about 200 tax and 300 technical accounting “stars” with a combo background making a job move in 2010.
6. CPA’s in the Bay Area work lots of hours.  Most work in excess of sixty hours per week.  Most do not have time to actively look for a new job.  Most are looking for a combination of the following:  A better work/life balance; an increase in compensation; better benefits; an increase in job responsibilities; and/or a stable or growing company.  They rely on their professional and social networks to learn about new job opportunities.  And, they enlist the help of a specialized recruiting firm (Kula Consulting, maybe?) to help them find their next job.

Next To Last Paragraph

I must admit to you that my breakdowns between all of California and the Bay Area should not be considered to be precise.  There’s a reason I’m no longer an accounting professional!  My definitions of materiality have always been a little on the high side, shall we say, but the breakdown in this posting have got to be within plus or minus 5%.  Close enough for my business.  The point is:  We are still a short supply market.  Our clients still need us to recruit tax and technical talent for their openings, even in this economy.  For the past six plus years, Kula has been calling, recruiting and getting to know as many CPA’s in the Bay Area as will take our phone calls or read our emails.  We know dozens of CPA’s who want to make a move before the “busy season”/ “tax season” starts in January, 2010.  Now’s the time to add CPA’s from Big 4 firms - - - with a January 5^th start date.  Otherwise, they are tied up until May, 2010.

Last Paragraph

Given the shortage of CPA’s in the Bay Area, think about ways to change job requirements to widen the talent pool.  Changing a job spec from ten to twelve years of experience to nine to twenty years, for example, might double the number of qualified people for the job.  A CPA with twenty years experience might cost five percent more; but also might stay longer than the three to five years that is the norm.  And be prepared to move quickly when a highly qualified CPA candidate is available.  They will still be going fast in 2010. We recruit and keep in touch with a very high percentage of the total Bay Area talent pool of CPA’s.  We know how and who to contact when our clients engage our placement services.  Let us help you get your unfair share of the CPA’s in our market.