The Rise of Outsourcing in the US Finance and Accounting Sector

Cost concerns sharpen the focus on efficiency and performance. In the face of continuing macroeconomic uncertainty, finance professionals are focused on boosting operational efficiency in order to enhance cash flow management and lower operating costs.Strategic cost reduction is a high objective for 59% of CFOs in 2024, up from 38% two years earlier (2023 PwC Pulse Survey) There is a shortage of personnel (and rising labor costs) to support finance and accounting initiatives. According to a 2023 U.S. Chamber of Commerce report, more than half of all financial-related jobs are unfilled, the largest percentage of any industry. The expanded availability of digital technologies.According to Gartner, 79% of CFOs' main goal for 2024 is to lead transformation efforts, and businesses are turning to outsourcers to swiftly obtain advanced capabilities such as analytics, automation, and generative AI. Offshore operating challenges. As service demand grows more complicated, CFOs are reconsidering the time zone, language, and cultural differences of outsourcing activities to different parts of the world.

Let's dig deeper into the variables influencing finance and accounting outsourcing trends in 2024.

And let's look at why nearshoring to Latin America has emerged as a leading strategy for CFOs, offering top-tier talent, cost savings, digital capabilities, real-time collaboration, and cultural alignment to mitigate modern challenges, reinvent outdated operating models, and achieve operational excellence. The F&A talent war is still ongoing. Almost every talk with corporate executives about their biggest issues begins with the same refrain: I can't employ enough people to get the job done. And they are discussing all job functions and levels. We've all seen "Help Wanted" signs in restaurants and retail establishments, but "Virtual Help Wanted" signs in corporate offices are equally prominent. In the finance business, this translates into financial reporting challenges and increasing turnover as understaffed teams burn out. More than 300,000 accountants and auditors in the United States departed their positions within two years, representing a dramatic 17% drop from the profession's high in 2019. However, CFO talent shortages are widening, despite record low F&A unemployment rates across the board. In-demand jobs such as financial analysts and billing clerks have astounding unemployment rates of 0.2% and 0.5%, respectively. According to Robert Half's Employment Trends in 2024 Report, 90% of firms report problems hiring competent people, and more than 3 million workers in the United States depart their employment each month.

Finance executives are concerned about having enough skilled workers to carry out strategies, therefore planning is under pressure.

According to Robert Half's 2024 In-Demand Finance and Accounting Roles and Hiring Trends research, 43% of finance managers are hiring for new positions in 2024, while 51% are looking to fill vacancies. F&A labour costs surpass inflation Despite contradictory macroeconomic signs, labor prices continue to rise in the heated F&A labor market. Salaries have changed dramatically between pre-pandemic 2019 and post-pandemic 2023, surpassing inflation by an average of 10% across the board and an average of 48% in larger areas. Consider these eight essential finance and accounting professions, whose wages climbed by over 21%, from an average of $48,326 to $58,438, according to Robert Half salary survey statistics for 2019 and 2023. A Chart of Salary Changes from 2019 to 2023 in the eight major Finance & Accounting Roles When major cities such as New York, San Francisco, Los Angeles, Miami, and Dallas are included, the numbers become even starker, making attracting and maintaining finance expertise an even greater issue. According to Robert Half data from the same time period, pay for these positions climbed by over 31%, from $54,248 on average to $70,807. A Chart of Salary Changes from 2019 to 2023 in the Large Markets F&A Core Roles Certain roles are significantly more competitive. Financial analyst salaries climbed by nearly 40%, while collections agent compensation increased by an astonishing 61%, as businesses understood the importance of aggressively managing their outstanding cash positions in the face of rising inflation.

While inflation plys a role in these compensation hikes, the focus is primarily on the war for talent.

Where do all the workers go? In 2022, a record 50.6 million people in the United States resigned their jobs, the greatest number in the history of the BLS' (BLS) Job Openings and Labor Turnover (JOLT) Survey, which began in 2001. However, while the labor force participation rate (LFPR) fell during COVID, it rebounded to pre-pandemic levels in Q2–23. And a new term entered our vocabulary when "The Great Resignation" became "The Great Reshuffle." Workers are leaving their jobs in pursuit of something better, rather than quitting entirely. Most commonly, this means higher-paying, more flexible employment in a competitive labor market, or something more rewarding or better suited to their life goals, such as career transitions, contract work, or starting their own business. According to Robert Half's employment trends research, about 40% of workers are looking or intend to look for a new job in the first half of 2024. Unfortunately, such tendencies have far-reaching consequences for the financial and accounting industries, as some F&A positions are facing a "branding" problem among young adults. The number of persons pursuing accounting degrees recently fell by the highest single-year proportion since 1995, as the profession's reputation for long hours, monotonous duties, less meaningful employment, and high academic obstacles has led the CFOs of future to pursue alternative fields. Many Millennial/Gen Z workers view transactional F&A jobs to be beneath them, which has an influence on retention and work quality.