Gusto surveyed more than 2,000 employers asking about their needs in this new environment. The data shows that many owners expect their accounting professionals—many of whom helped them secure Paycheck Protection Program (PPP) funding and claim employment-related tax credits—to play an expanded role in filling what we are calling “the guidance gap.” 

In this article, we share that research and its implications for accounting professionals.

Context on How Work Has Changed

Long before the 2020 pandemic, the way people managed employees was changing, and accounting professionals were playing an increasingly important role. 

With software and automation taking over routine bookkeeping and computational tasks, more accountants and bookkeepers were applying their financial expertise to personnel questions like payroll and benefits—including new benefits like telecommuting and flexible work weeks.

Then the COVID-19 pandemic hit and within weeks, one-third of the world was working from home. Suddenly, the employment equation became far more complex. Employers found themselves spending more time and energy managing people remotely and navigating newly acute employee needs like mental health and leave to care for family members. The government launched aid programs to help, but this also saddled owners with an estimated 8,000 new pages of legislation and 5,000 more in pages of IRS guidance to understand.

Now, coming out of this period, it is clear many of these changes will persist. The advisory firm Gartner estimates that 53% of the U.S. workforce will remain hybrid or fully remote, and the workforce is churning as people switch roles and seek the right fit. Some 4.3 million Americans quit their jobs in August 2021, many citing “inconvenient hours.” And the number of job postings that mention “four-day work week” tripled on the job site Zip Recruiter. This has created an environment where 55% of managers say they’re spending more of their time on people-management activities. Many owners say they need more advice and support.

Owners expect their accounting professionals to play an expanded role in filling what we are calling “the guidance gap.”

The data also show that employers have seen a positive impact from taking steps to take care of their teams, and many now want to know what steps to take next.

To Adapt, Managers and Small Business Owners Want More Financial and People Advice

Employers are facing many challenges, and chief among them is ensuring they have a productive, motivated, and high-performing team. Our research found that when businesses take steps to care for their teams, their business does better; their workers are happier, healthier, and more productive; and they are more likely to retain those employees. 

Cared-for workers are happier and more productive, say owners

Care for workers is more important than ever, as a tight labor market has meant employers must compete harder to attract and retain talent, including ensuring that compensation and benefits are in line with potential new hires’ expectations. As presented in Figure 1, 77% of owners reported taking steps to improve their payroll or benefits offerings—and owners who did so noticed their workers were less likely to leave for another job, more likely to provide better service, and somewhat less likely to experience burnout or exhaustion. 

Figure 1. Of managers who have improved their payroll and/or benefits, 80% found it has made their teams more productive

Owners want more financial and people advice

The challenge for employers, however, is to know what steps to take. In Figure 2, owners were asked what area they most need advice on. The top selected need was financing and accounting advice (47%), followed by people operations (31%). 

This presents a new and exciting opportunity for accountants: Business owners are looking for guidance on both financial and people operations, and accountants are naturally positioned to provide it. Their work already covers people management activities like payroll, and their financial acumen can help resolve questions around pay and benefits. 

Other independent research also confirms this relationship. According to the American Institute of CPAs, accounting firms that offer advisory services are in high demand and can increase their revenue by 50%. And a 2021 study by the financial data security company Digits found that 72% of business owners see their accountant or finance team as a key strategic partner, and 88% use their accountant to support key strategic planning.

Figure 2. Employers are looking to their accountant for advice on people operations (31%), right after finance and accounting (47%)

The larger the business, the greater the need for advice

Notably, small businesses with more employees and those in professional services are most in need of advisory services related to people management. As shown in Figure 3, employers with 26 or more employees are 53% more likely to say they need help with people operations and management. For accountants who have typically served smaller businesses, getting into people operations may offer a way to move upmarket. Digging in deeper, those larger businesses in professional services have the greatest need for people advice, as evidenced in Figure 4. This suggests the opportunity for accountants is sizable among larger companies.

Figure 3: Larger businesses have an even greater need for people operations advice

Figure 4. For professional services companies, improving people operations is the #1 need—above finance and accounting

Recruitment and training are a top need

People operations span a wide range of activities, from managing work schedules to compensation and morale. When asked what aspect of people operations owners needed guidance on specifically, the answer was clear: attracting and retaining talent in an increasingly tough hiring market (Figure 5). External data reinforces this: In September 2021, job openings increased by half—from 749,000 to 10.9 million—while hiring fell by 160,000 jobs. 

The need to hire is followed by the need to develop affordable and attractive benefits packages and to manage payroll while staying compliant.

Figure 5. Companies need the most help with recruiting and retaining employees

Benefits help attract and retain talent

Employers know that investing in their benefits offerings can help them achieve their recruitment and retention goals. In this survey, 53% of respondents currently offered some form of benefits to their team, while 47% did not. When these owners were asked about the biggest blocker to offering benefits (Figure 6), they said the main reason was cost. In other words, they tend to struggle to develop an affordable benefits package—something accounting professionals are suited to help with.

Figure 6. The biggest blocker to better benefits? Cost

Owners also need advice on managing remote and hybrid teams

Beyond developing an affordable benefits package, the second aspect of people operations owners need advice on is managing employees that increasingly work outside of the office. The remote work landscape is rapidly shifting, and the challenges are vast. Should you compensate employees evenly despite geography and local cost of living? Should remote workers be reimbursed for their internet and phone bill? Can better benefits retain workers who now have many more options from other employers willing to hire them remotely? 

Prior to the pandemic, just 6% of employers grappled with these questions. Figure 7 shows that now, half of all businesses do. Among small businesses in professional services sectors, the number that manages a remote or hybrid team rises to 70%.

Figure 7. Half of employers (50%) now manage a remote or hybrid team, and face the associated challenges

Managers of remote teams want advice

As the share of businesses managing remote teams has risen, so has the need for advisory services about how to manage such a team. Figure 8 presents results for when we asked how confident they were in managing their remote or hybrid workforce. Just 37% of companies are completely confident in their ability to manage remote and hybrid teams, and 63% are somewhat confident or less—which means, they are open to advice on how to manage those teams better.

The least confident industry was real estate (28%), followed by legal services (32%). Companies in their first or second year are significantly less likely to be completely confident (29%), and the least confident group appears to be businesses with 11-25 employees.

Figure 8. 63% of companies with remote or hybrid teams want advice

So where do these employers turn?

Employers Look to Accountants for People Advice

This pandemic has made it abundantly clear to small and medium-sized businesses that questions of people and finance are deeply interlinked. People are what make businesses successful. Caring for them is a way to improve satisfaction, retention, and productivity, which in turn, offers an opportunity to improve the business’ bottom line. And because there is no figuring out the right way to care for people without working through the numbers, an accounting professional’s input is vital. 

Perhaps because of these factors (Figure 9), 75% of employers now say it is important that their accountant offer business advice. Only 8.5% of respondents did not think this sort of advice was important.

Figure 9. Accountants must offer advice to remain relevant—92% of owners say it is important, 46% say it is “very important”

Owners will pay for people advice

Furthermore, data from this survey shows that advice about people operations is a need employers are willing to pay for, which seems to overturn a long-held assumption among accounting professionals that employers wouldn’t be willing to pay for this service. We asked owners if they would be willing to pay for any of several forms of people’s advice: payroll, onboarding, company culture, team morale, and remote/hybrid management. As Figure 10 shows, 41% of owners indicated they would be willing to pay more for at least one of those services.

Figure 10. A majority of employers (41%) would pay their accountants for people advice

One-third of owners would pay at least 10% more for people advice

When asked how much more they would be willing to pay for proactive advice on staying compliant with payroll, 36% of owners would pay 10% more, and more than half of employers would pay at least 5% more (Figure 11). This suggests qualified accounting professionals who are not offering this could be leaving money on the table while at the same time, under-serving a meaningful portion of their clients.

Figure 11. More than one-third of employers (36%) say their accountant could charge them 10% more for payroll advice

One-third of owners would also pay at least 10% more for culture advice

While not something many accountants consider within their repertoire, offering culture advice is a large and growing opportunity for accountants. When we asked owners how much more they would be willing to pay their accountant for advice on optimizing their culture, 32% would pay at least 10% more and 58% would pay at least 5% more (Figure 12). 

The opportunity here for accounting professionals is also greatest among larger businesses and technology companies. Fifty percent of companies with 26 or more employees were willing to pay more for advice, in contrast with 41.8% of smaller companies. This suggests that as companies grow in size, and people operations grow more complex, people advice becomes a more pronounced need. For accountants looking to move upmarket, this suggests that people operations is a way to begin working with larger companies.

Figure 12. Nearly one-third of employers (32%) say their accountant could charge them 10% more for culture advice

Owners see accountants who provide this advice as more valuable

Providing people-centered advisory services is not just a way for accountants to differentiate themselves in a competitive environment. It’s also becoming an expectation. Owners say they find accountants who offer these services more valuable, and are willing to move their business to firms offering them. 

Nearly 8 in 10 business owners said that they found an accountant who provides business services more valuable (Figure 13). And 86% of owners indicated that it was important for their accountant to consider their team’s wellbeing when providing business advice (Figure 14)—specifically to attract and retain talent, boost morale, maintain culture, and manage remote teams effectively.

Figure 13. 79% of businesses see accountants as more valuable if they offer business advice

Figure 14. 86% of employers say it is important that accountants consider their team’s wellbeing when providing business advice

Most owners say they would switch to an accountant that advises

These services are no longer a nice-to-have for businesses, but rather a need and an expectation. When asked if they would be willing to switch accountants to one who does provide proactive business advice, 62% of owners indicated they would (Figure 15). Of all the findings, this should be the most telling. In an industry where client churn is notoriously low, well over half of employers say business advice is important enough that they’d switch to an accountant who could provide more of it.

Figure 15. 62% of employers would consider switching to an accountant that provides business advice

Employers Seek Help Closing the Guidance Gap

Employer-employee relationships have come a long way in the past two years. And as a result, so have accountant-employer relationships. Companies have undergone an involuntary work-from-home experiment that has mostly stuck, and workers have realized they need more in the way of payroll and benefits. For their part, business owners in this market are eager to listen and adapt. They know that the best way to satisfy everyone is to improve their employee benefits offering, which will create happier, more productive teams to drive stronger results for the company. But they need guidance.

What business owners say they need most now are ideas from their accountant on how to succeed in this new world of work—and specifically, advice that transcends the traditional accounting remit and covers people operations. It’s a guidance gap, and they’re hoping their accountant can help them close it.

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Luke Pardue Luke Pardue was an Economist at Gusto, researching how public policies help small businesses and their workers thrive. He received his Ph.D. from the University of Maryland, where he studied the effects of government programs on disadvantaged populations’ housing and labor market outcomes.
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