Market Trends That Will Shape the Rest of 2023

Let’s start with some encouraging news.

Despite initial worries about a possible recession, the Twin Cities market has shown impressive resilience, maintaining a similar state as it did six months ago. It’s a pleasant surprise for many who expected the economic uncertainties to have a more significant impact on staffing and market trends.

Because of this, the competition for accounting and finance talent remains fierce, emphasizing the ongoing importance of specialized recruiting services. Our dedicated team closely monitors market dynamics to provide valuable insights and guidance year-round.

So, what can you expect for the rest of 2023? Let’s dive in and explore what lies ahead.

1. Expanding focus on cutting costs

Data from the CFO 2023 Q2 Outlook Survey highlights a strong focus on cost-cutting measures in the latter half of this year. Finance leaders who participated in the survey identified many ways they intend to reduce expenses, including increasing efficiency (36%), lowering operating costs (26%), and establishing partnerships with more effective suppliers (26%).

It’s important to note that while cost-cutting is a priority, many CFOs recognize that the success of an organization hinges on having the right people in place for long-term growth.

Hiring new talent and retaining existing staff will remain a top priority this year. And as we move forward, compensation may experience a plateau in the second half of 2023 as companies aim to manage costs effectively.

2. Growing demand for candidates

The Minnesota job market remains strong, with only a 2.8% unemployment rate (reported in April 2023), which means most people have jobs. Yet, companies still need people with accounting and finance skills.

This demand has been building up since 2020 and has yet to be fully met, indicating a persistent need in the industry. Even speculations of an impending recession have had little impact on this trend, as companies still seek accounting and finance candidates at all levels.

So it should be no shock that fewer employers are delaying their hiring plans. A survey by AMBRION revealed that almost 60% of employers have active hiring plans for Q3.

3. Declining number of accounting graduates

The search for staff or senior accountants has become increasingly difficult in recent years. One reason for this is that fewer students are pursuing accounting degrees.

Surprisingly, only 17% of the Graduating Class of 2022 at the University of Minnesota’s Carlson School of Management obtained a degree in accounting!

This decrease is having noticeable effects on the availability of qualified candidates. And as a result, many employers need help from external recruiters to hire the right people for open roles.

4. Escalating amount of retirees

They’ve arrived. From now until 2030, 10,000 Baby Boomers will hit retirement age daily. Millions of employees are counting down the clock as they prepare to retire officially.

A report from the AICPA shows that Baby Boomers — who make up 47% of the AICPA membership — are retiring en masse. And no thanks to the 2020 pandemic, which only accelerated this trend.

The urgency of succession planning has reached new heights. As mid-level employees get promoted up the chain, it creates a void in entry-level roles. The diminishing pool of recent graduates further complicates bridging this gap.

5. Emerging competition for hiring teams

Competition for hiring will be intense in the second half of 2023 due to several factors:

A limited supply of high-caliber accounting and finance candidates
Scarcity of staff and senior-level talent
The declining number of graduates pursuing accounting degrees
An increasing number of job openings resulting from mass retirements

We anticipate many companies will offer notable compensation increases (some up to 30%) to retain their current workforce. This means that only the most competitive mid-level positions will be able to attract the best candidates.

Employers will also face increasing difficulty finding suitable candidates through traditional job searches. As a result, partnering with external recruiting firms will become the best way to fill open roles.

6. Rising demand for new skillsets

There will be a greater need for candidates skilled in data analytics and automation technology in the coming months. And the accounting and finance industry is no exception.

Technology has been rapidly advancing, and while it’s not replacing human roles, it is changing the skills needed for specific tasks. Once done manually, many functions will now rely on software and automation.

Furthermore, companies are increasingly investing in Artificial Intelligence (AI) technology. PWC reports 52% of companies accelerated their AI initiatives during 2020 alone. Leaders and workers must prioritize learning and training in these areas to stay competitive.

Final Thoughts

As we head into the rest of 2023, the Twin Cities market remains promising, particularly in the accounting and finance sectors. So whether you’re looking to fill an open position or are curious about the latest local market trends, we’re here to help.

Connect with us today and discover the difference our collective expertise can make for your organization!