Future of Professionals Report:
How AI can help tax, audit & accounting firms with their talent strategy
Oct 29, 2025
Our research shows the critical importance of AI in providing a pathway to a solution for the ongoing and likely-to-get-much-worse talent crunch that many firms in the tax, audit & accounting industry are experiencing
Key insights:
AI can address the tax industry’s talent crunch — AI and GenAI can help tax firms automate routine tasks, increase workflow efficiency, and potentially operate with fewer staff without sacrificing client service.
Strategic AI adoption can drive ROI and competitive advantage — Firms that strategically adopt AI by starting small, focusing on high-impact use cases, and are continually improving are already seeing significant ROI, with those firms with visible AI strategies being more than three times as likely to see ROI compared to those without.
Humans-in-the-loop and upskilling remain key — Despite AI’s rise, human judgment and critical thinking are still essential, especially in today’s complex and rapidly changing regulatory environment.
Today, the tax, audit and accounting industry is in the middle of a perfect storm, especially when it comes to talent. First, the industry continues to see a talent shortage with fewer new professionals entering the talent pipeline. Couple that with a significant demographic shift that is seeing a generation of CPAs retiring, and the result is that many tax firms are feeling this talent pinch, and it is only likely to get worse.
Further, this is happening at a time when there is no shortage of work. The industry is continuing to see a growing number of increasingly complex matters, especially with all the tax codes and regulatory changes that are happening. Not surprisingly, many firms already are turning to new technologies and automation — which is being supercharged by agentic and generative AI — to help them address this talent crisis.
All of this is fundamentally transforming how tax, audit and accounting firms operate. More than three-quarters (79%) of tax professionals surveyed are telling us they see AI having a high or transformational impact within the next five years within their firms, according to the recently published 2025 Future of Professionals report from Thomson Reuters. And, more importantly, professionals say they recognize that AI offers their best chance to tackle these complex challenges, the regulatory changes, and the talent shortages.
Addressing the talent crunch
The shortage of skilled professionals in the industry is not a new challenge, but it is becoming more acute. With Baby Boomers and Gen Xers retiring and fewer new entrants joining the profession, firms are struggling to maintain service levels and manage growing workloads. At the same time, the complexity of tax codes and regulatory environments continues to escalate, placing even greater demands on existing staff.
AI offers a compelling solution. By automating routine, time-consuming tasks — such as data entry, reconciliation, and basic compliance work — AI enables tax firms to operate efficiently with a lower headcount. This doesn’t mean sacrificing client service; rather, it allows professionals to focus on higher-value advisory work, where human judgment and expertise are irreplaceable.
However, firm leaders need to understand that the adoption of AI is not just about technology for its own sake — it’s about fundamentally changing how firms operate, manage talent, and deliver value to clients. Firms that embrace AI can handle greater client volumes, manage the explosion in data, and keep pace with regulatory changes, all while alleviating the pressure caused by labor shortages.
How AI adoption can drive ROI
While the potential benefits of AI are clear, realizing them requires a strategic approach. Firms that start small, focus on high-impact use cases, and iterate their AI strategies are already seeing significant returns on investment (ROI). Indeed, more than half (54%) of respondents to Future of Professionals say their firms already have reported positive ROI from AI initiatives — and more importantly, are able to free up their professionals’ time for more meaningful work, which can also improve the bottom line.
Our research shows conclusively that having a visible AI strategy is a key differentiator. Firms with clear, actionable AI plans are more than three times as likely to see ROI compared to those without. Yet only 14% of firms have such formal AI strategies in place, according to respondents.
The best approach we’ve seen is for firms to start small by identifying specific pain points, piloting targeted use cases that demonstrate key value, and building on early successes. This approach allows firms and their professionals to learn quickly, adapt to changing needs, and make continual improvements.
Clearly, the competitive landscape is shifting in the tax industry, making it increasingly difficult for firms without AI strategies to attract and retain top talent because the best professionals will want to work with cutting-edge tools and efficient processes, not outdated systems. This creates a virtuous cycle that can lead to better margins, more interesting work, and the ability to attract the industry’s best talent.
Leveraging the human element
Despite the impactful potential of AI, the human element remains central to the success of firms. While technology is a powerful tool, it is tax professionals who will drive AI success, simply because human judgment, critical thinking, and the ability to assess AI outputs are essential, especially in today’s complex and rapidly changing environment.
More than half of tax industry respondents say they see skill gaps, particularly in technology, data literacy, and critical thinking among their teams.
Clearly, the industry must invest in ongoing training and upskilling of its professionals. More than half (53%) of tax industry respondents say they see skill gaps, particularly in technology, data literacy, and critical thinking among their teams. As the generational shift accelerates — with digital natives such as Millennials and Gen Zers entering the workforce — firms have an opportunity to build a culture that embraces digital tools and rapid change. These digital natives are more comfortable with technology, but they still need support to develop the skills required for effective AI adoption.
Indeed, building an AI-ready culture starts at the top. Leaders must encourage experimentation, foster a mindset of continuous learning, and ensure that professionals understand both the capabilities and limitations of AI. Success requires a strategic approach to upskilling, with targeted training programs that address the specific needs of each firm.
Of course, it’s easy to be overwhelmed with this. For firm leaders, however, the message is clear: AI is not a panacea, but rather a powerful tool for addressing the talent challenges facing the industry. The key is to act fast, learn fast, and take a strategic approach.
The future of the tax, audit and accounting profession will be human-led and AI-enabled. And those firms that embrace AI also will be better positioned to manage complexity, attract top talent, and deliver superior client service going forward.
[Thomson Reuters]
