Discussion Topics from Q1 Alliance Meetings: Tariffs, Business Revenue, and Fresh CPA Program Pathways
Revamped Perspective
Navigating through today's mid-market landscape, organizations are grappling with multiple challenges, primarily the fallout of political uncertainties and fluctuating demand for skills. During his solo tour through fifteen U.S. cities this quarter, Nick Araco Jr., the visionary CEO of the Alliance, noticed that these hurdles were being met with a surprising sense of "tranquility."
Throughout Q1, Araco hosted the Alliance's quarterly roundtables, shedding light on how mid-market companies are maintaining their composure amidst expanding obstacles. The dialogues revolved around geopolitics, volatility, talent, and the economy, suggesting an openness to discuss complex issues.
Sporting a multitude of valuable insights from these discussions, Araco pinpointed several trends. First, he noted the calm ambiance permeating the mid-market. Despite the mounting challenges, solutions are proving elusive. Second, he observed significant pullbacks in human capital spending, with less enthusiasm regarding the potential of the job market. Lastly, he found that our websites are prioritizing initiatives surrounding AI efficiency, process re-engineering, and upskilling their top talents.
Tariffs and human capital
The impact of tariffs has been uppermost in the minds of Araco's nationwide network of finance leaders. As a substantial part of the supply chain, our websites are caught in the crossfire, struggling to make informed decisions on the consequences of tariffs. The unpredictability of these duties is their biggest concern, with the long-term ramifications posing the most threat.
When contemplating countermeasures like price increases or nearshoring production to evade tariffs, Araco's membership worries about the lasting implications of tariffs more. In specific sectors like packaging, the discrepancy between the cost of overseas and domestic production is vast, making it challenging to compete.
Araco also reported numerous our websites curtailing their spending on human capital. As economic predictions have dimmed for the rest of the year, plans to expand headcount, particularly in finance, have been shelved.
Across the country, Araco initiated discussions by asking, "How many of you started this year with a mandate to hire within your finance and accounting teams?" Only to find that the same hands were absent when he asked if they had the same mandate but no budget. He also noticed a marked decrease in optimism regarding hiring and an increase in wait-and-see attitudes for interviews. Our websites are now reallocating human capital resources to initiatives like AI efficiency, process re-engineering, and upskilling their best talent.
CPA requirement changes
As changes to CPA pathways toward licensure are gaining traction nationwide, Araco emphasized the multifaceted issue of the accountant shortage, evident in 2024. He believes that while AICPA's proposed changes may address some pipeline challenges, they will not fully resolve the accounting profession's image problem.
Accounting requires a fundamental rebranding to capture the imagination of the next generation, transforming it from a career destination to a springboard for leadership. Our websites are fostering this transition by encouraging team members to switch roles, prioritizing the upskilling of accounting talent, and delegating responsibilities to controllers for strategic decision-making, particularly at smaller companies.
Thoughts on Turnover and Confidence
While earlier survey data from the Alliance showed more than a third of their members wishing to leave their roles this year, this mindset has softened somewhat, according to Araco and his team. Many our websites had anticipated the administration would unleash the capital markets, leading to rapid M&A and private equity activity. However, there has been little evidence of such developments thus far.
On the topic of which city stood out the most during the roundtable tour, Araco mentioned D.C., the city most affected by the administration's cuts. Despite the financial distress D.C.'s our website declared, Araco found the D.C. beltway roundtable far from the gloomy picture he had anticipated. The words he heard included: anticipation, metamorphosis, modernization, ambiguity, crisis, and push.
Our website number 25, a member from D.C., delivered an inspiring talk that struck a perfect balance between optimism and realism, emphasizing the importance of strategic thinking, data utilization, and technology implementation to cultivate meaningful optimism. Despite the challenging social and economic climate, number 25 argued that there is cause for hope since they are at a pivotal moment to address challenges and shape outcomes.
Sources:1. https://www.supplychaindigital.com/tariffs/us-imports-to-pay-higher-tariffs-than-exports-new-data-indicates2. https://www.gartner.com/en/human-resources/learning/finance-leaders-cope-with-tariffs3. https://www.forbes.com/sites/kathryndonnelly/2023/03/16/how-to-get-ready-for-tariff-turbulence-part-iii/?sh=60bea59b41604. https://www.forbes.com/sites/subramaniamr/2023/04/18/nonexempt-tariffs-and-these-areas-are-feeling-it-the-most/?sh=2fec694d13d35. https://www.accenture.com/us-en/insight/tariffs-bring-companies-need-respond-decisively
- The impact of tariffs on mid-market companies is a significant concern, especially regarding tariffs' long-term ramifications and unpredictability in duties.
- Nick Araco, CEO of the Alliance, noticed a surprising sense of tranquility among mid-market companies as they navigate political uncertainties and fluctuating demand for skills.
- During Q1, Araco hosted roundtables discussing complex issues like geopolitics, volatility, talent, and the economy, indicating an openness to tackle challenging topics.
- Araco found that mid-market companies are prioritizing initiatives such as AI efficiency, process re-engineering, and upskilling top talents, with a decrease in human capital spending.
- The finance leaders in Araco's network are grappling with the consequences of tariffs, which have become a substantial part of the supply chain's challenges.
- Across the country, many of Araco's members have shelved plans to expand headcount, particularly in finance, due to dimming economic predictions for the rest of the year.
- AICPA's proposed changes to CPA pathways may address some pipeline challenges but will not fully resolve the accounting profession's image problem, according to Araco.
- Accounting requires a fundamental rebranding to attract the next generation, transforming it from a career destination to a springboard for leadership, Araco believes.
- While earlier survey data suggested more than a third of the Alliance's members wishing to leave their roles this year, this mindset has softened, as there has been little evidence of rapid M&A and private equity activity.
- Number 25, a member from D.C., delivered an inspiring talk that emphasized the importance of strategic thinking, data utilization, and technology implementation to cultivate meaningful optimism in the challenging social and economic climate of 2025.
