Certified public accounting (CPA) firms have spent the past several years navigating a difficult workforce landscape: rising labor costs, intensifying competition for experienced professionals, and ever-evolving employee expectations around benefits. At the same time, health care premiums, retirement plan expenses, and administrative demands are placing additional pressure on firm budgets.
That pressure has become especially difficult to manage as employees continue to put significant value on benefits. According to the 2025 ADP TotalSource Employee Benefits Survey, 78% of employees say they feel valued because their employer offers medical benefits. Even more, 83% say they feel valued because their employer offers non-medical benefits, such as life and disability insurance, dental, vision, etc. Additional findings show that medical insurance remains the most valued workplace benefit (93%), followed by retirement savings plans (60%).
Taken together, these findings point to a reality many Illinois CPA firms know well: Benefits are a critical component of the employment value proposition. Therefore, the question for firms isn’t whether to invest in these benefits. Instead, it’s about how to control these costs while also supporting recruitment, retention, and long-term growth.
Rather than focusing solely on annual premium increases, firm leaders should evaluate health care costs within a broader workforce framework. As part of this process, the key questions firms should evaluate include:
Overall, the objective should be balancing cost management with workforce stability. Because institutional knowledge and client relationships are valuable assets, it’s important to keep in mind that talent retention often delivers significant financial returns.
Health care benefits may receive the most attention, but as ADP’s survey shows, retirement benefits continue to play an important role in attracting and retaining talent.
This is particularly relevant for small and mid-sized CPA firms competing with larger regional and national firms for talent. While smaller firms have historically viewed retirement plans as expensive or administratively burdensome, recent changes have fortunately altered that equation.
For example, the SECURE 2.0 Act expanded tax credits that can offset startup and administrative expenses associated with retirement plans. In addition, pooled employer plans (PEPs) allow smaller organizations to participate in a shared retirement plan structure that can reduce administrative complexity and costs.
Notably, Illinois CPA firms face an additional consideration when evaluating retirement benefits. Under the Illinois Secure Choice Savings Program Act, employers with five or more employees that have been in business for at least two years must either offer a qualified retirement plan or facilitate employee participation in the state’s retirement savings program. Rather than viewing compliance as the end goal, Illinois firms may benefit from evaluating whether a traditional 401(k) plan, PEPs, or other qualified retirement plan could provide a stronger recruitment and retention advantage while also taking advantage of federal tax credits available through the SECURE 2.0 Act.
Of course, benefits costs extend beyond premiums and employer contributions. Administration, compliance, and employee support all consume valuable time. Many firms operate with lean internal HR resources, placing administrative responsibilities on partners, firm administrators, or operations staff. As benefits become more complex, these demands can increase substantially.
Some employers are responding to these challenges by evaluating professional employer organizations (PEOs), which can provide access to larger-group purchasing power, expanded benefits options, and administrative support.
While a PEO may be a better pick for some compared to others, the broader lesson is important: Firms should evaluate benefits costs holistically, including the internal resources required to manage them.
As health care costs rise, firms often look for ways to offset expenses. Common approaches include increasing employee premium contributions, raising deductibles, or narrowing plan options.
While these measures can generate immediate savings, they may also lead to unintended consequences on employee health, productivity, engagement, and retention. For instance, ADP’s survey found that more than one-quarter of employees have delayed or skipped medical care because of out-of-pocket costs. Others reported reducing medication use or foregoing dental and vision coverage to manage personal expenses. Remember, an employee who delays treatment may ultimately require more time away from work.
Additionally, a benefits package perceived as less competitive may also increase the likelihood that desirable job candidates or high-performing employees explore opportunities elsewhere. Given the ongoing shortage of experienced accountants, replacing a senior staff member or manager can be considerably more expensive than preserving a competitive benefits package.
All in all, as firms prepare budgets and workforce plans for the coming years, benefits should be evaluated not merely as an expense category but as a strategic investment in talent.
The firms most likely to succeed will be those that balance fiscal discipline with a benefits strategy that supports the needs of today’s workforce. In an increasingly competitive labor market, that balance may prove to be one of the most important factors influencing long-term talent retention, growth, and profitability.
Prakriti Bhatia is the vice president and general manager of Health and Wealth, ADP TotalSource, at ADP.
