expect a new hiring crisis.
one in five junior staffers plan to leave their accounting firm by the end of the year, according to a startling new survey.
and, of those, about 75% plan to quit public accounting completely, significantly worse than last year’s 65% loss rate.
the data comes from the latest issue of ioma’s partner’s report (subscribe here) which reports the results of a survey of more than 2,000 employees of cpa firms, conducted as part of consulting magazine’s 2010 best firms to work for survey.
in addition, the average anticipated tenure for a junior employee is slipping — to just 3.9 years, a decline from the year-ago 4.1.
furthermore, mid-level employees (those between partners and junior staff) say they too would quit public accounting if they could — by more than a 2-1 margin, (61 percent vs. 29 percent).
“this means that the spike in turnover isn’t likely to lead to a redistribution of talent among accounting firms,” according to editor jess scheer, writing in the monthly newsletter. “instead, we’re seeing signs of a one-way stream away from the profession.”
“to stem the tide,” he advises, “accounting firms must first convince their staff of the merits of remaining within the profession, as well as staying at their current firm… moreover, as the war for talent rekindles in the coming year, this trend will likely lower the supply of talent, thus exacerbating the hiring challenges. “
38 responses to “1 in 5 junior staffers planning to quit”
carson
i worked in corporate and found it boring. moved to pa and found it interesting. formed a firm and decided to work 35 hour work weeks. did that for 32 years (proving that one can be successful in pa and have a firm that works less hours per week.
merged with large regional. now back to 40+ hours per week. in my opinion if firms are going to keep their professional staff in the future they will need to rethink their priorities. shorter work week, time to network and enjoy family life or whatever other endeavors they may want to pursue while young and able. we are going to have to be more flexible in the hours worked and that means that the partners may have to sacrifice some to maintain a creditable workforce.
thomas avery blair ea
i worked for a cpa firm in western michigan for four years, taught the staffs how to do write up and keying the data properly into the systems, worked an average 68 hours per week and was paid a flat rate of 30% of the fees generated and promised a place in the partnership. the fourth tax season ended and i was expecting a $4,500 bonus as promised…instead the partners gave me a case of red wine (turned to vinegar) and a promise of work the next tax season.
i dropped my cpa efforts, went “rogue” and ran an ad that announced “i make housecalls” and within four years’ time i acquired 91% of their “branch office” to their south by aggressive “guerilla tactics” i learned from my former employers. i have since never looked back, became an ea and became licensed in seven different financial services industries.
the best thing those cpa partners did for me was to piss me off…it motivated me sufficiently to acquire 1/3 of their business without paying them a single dime for it…and they never challenged the violation of the non-compete because they were scared to death about what i might reveal in court about their unethical behavior toward me, three other partner-wanna-bees and also various sexual harrassment events towards four of their female members of staff workers.
i esteemed all cpas very highly until i worked for this firm…today i prefer more readily the company of enrolled agents, but still do tax returns for a few cpas and turn to them for internal audit and other cpa “fortes” from time to time.
question: what might the new registration of all tax preparers by the irs in 2010 do to alleviate the problems mentioned in the original article or perhaps to otherwise still worsen it?
i hope you will see my comments at least as somewhat enlightening and at least food for thought.
respectfully submitted,
thomas avery blair, ea
sue
i have an interesting perspective in that i started my career with 6 years at a big 4 firm, then left pa for a long time. i’ve recently made the move back to pa (a large local firm) after 18 years. many of the complaints voiced about pa are happening in the private sector also, like too many hours, too few dollars, etc. the grass is always greener… as someone said, you have to find the right firm for you. they are not all the same, and there are bad bosses in and out of pa.
i am thrilled to be back in pa! where else can you get the diversity of experience, the challenges to stretch yourself, and the opportunity help others (clients and staff) succeed? i sank into the monotony of the routine in my non-pa jobs, and basically got too bored to do it anymore.
one huge improvement in pa in recent years has been the openmindedness towards flexible work schedules. i have sacrificed a few bucks for a flat 40 hours/week arrangement, and it has been worth every dime. i have time with my husband and 3 kids, and get to experience all that i want out of pa, without the overtime (the one thing i disliked the most before.) again, if your firm is not moving in that direction, they are frankly out of touch. the gen y desire for more balance, and the percentage of female accounting majors make it imperative that we rethink the way its always been done. working women magazine lists all of the big 4 firms as best places to work. most of their recognition is in regards to flex scheduling and number of women partners. if the big players are going the flex scheduling route, all firms will probably have to do it to attract talent.
anonymous
whoever commented on 11-18, i’m looking for someone like you, assuming you are partner material. i have been in this game for 45 years and would love to have someone step up and take over, buy me out. if not, i will have to sell to an outsider.
as to the question raised of pa owners, i believe i have had a good family life. yes i work and worked many hours during tax season, but the rest of the year was up to me. i have been married for 46 years to the same person. our family, children and grandchildren are very close. i attribute that to our beliefs and church. pa accounting has afforded me the income and available time to make that possible.
as to staff, i believe they should be fairly compensated. on average, even in our down economy, salaries adjustments have been positive and probably averaged 7 to 10% the last two years. most all staff are compensated based on an annual salary. in addition they receive compensation for the excess hours worked during
the year. many pocket an additional $3,000 to $6,000. i hope that doesn’t make me too greedy.
if i knew then what i know now!
i have been in public accounting for about 34 years, working in 2 large firms and 2 mid-size firms. i’ve made it to “principal” but not “partner”. i’m surprised that the numbers are only 1 out of 5 junior level staff and 61% of mid level staff who want to quit. over the years the profession has changed in a lot of ways, not too many for the better.
the high rate of turnover in public accounting is hardly a new issue. over 34 years i have worked for 2 large regional firms and 2 mid-size local firms. the complaints from the staff have not changed much over the years. i remember reading a similar article many years ago that discussed how many cpa firms treated their staff like depreciable assets, and when when they were worn out, they were discarded.
the complaint i hear most often from younger accountants is how much effort is expected of them for so little reward. the perception is that the partners are getting rich on the backs of the staff. the partners drive luxury cars, have vacation homes, purchase new homes in ritzy areas, and purchase co-op apartments in the city near the office while most of the staff struggle to come up with a down payment on a modest home.
one of the biggest factors for dissatisfaction with public accounting as a profession, and it has been for quite some time, is the possibility of actually making partner some day are slim to none, regardless of how talented you are or how hard you work. in each firm i have worked in the partner selection criteria has been a mystery and sometimes just plain baffling! even bringing in business is no guarantee. in my current firm, i have brought in approximately $150k in annual billings (which is $150k more than all the junior partners combined) but all too often my clients are treated like stepchildren. i have to fight for staffing, and rarely get the better staff. if i could do all the work on my own, in the time frame required, and if i possessed all the highly technical tax expertise needed for my major client, i would have gone out on my own. this has left me feeling somewhat under-appreciated and i have no incentive to bring in any more business. i am planning on working full time for maybe another 6 or 7 years, and then semi-retiring, working part-time or per diem depending on finances. i am tired of the stress of all the deadlines and working ridiculous hours.
most of the staff at my current firm (we are about 50 professionals) feel as though they are in a dead end position, and will probably never make partner. that feeling limits their willingness to work excessive hours and sacrifice quality of life. during busy season they all work the long hours, but the rest of the year there is a stampede to the door at the end of the day.
they can’t wait to get out of here.
cpa owner for years
re: vic’s comments, i have been married yrs to the same incredible wife who, yes, took off 10 years to help raise our 2 kids. and yes, we made sacrifices during those years because our income was cut down (she was a pharma rep making big $$). now that kids are grow she is back to work after getting an advanced degree. pa has allowed me to see my kids soccer games, go to their band concerts and pick them up from school when they are sick because pa allows that flexibility. if you are a gen y’r and have had a bad experience with a large pa firm, try finding a smaller one closer to home and cut your commute down. you can make pa a great career and make good $$$.
i also agree with several others here, yes, working hrs in tax season is not fun, but the time off during the summer when my kids are home from school allows me to play golf and vacation with them more when it counts! i do feel i have a great balance of work and family life, even after years owning my own firm.
kg
it takes finding the right fit/firm for you. i am a partner at a smaller cpa firm. we work 60 hr/wk during tax season and take fridays off during the summer. i don’t travel farther than 30min in any one direction. we allow our staff to be flexible with their schedule. nobody here is going to become a millionaire, but i will take the flexible hours over any private job that requires me to be there 8-5 year round.
s
let’s take a balanced view of gen y. i don’t think any reasonable person expects to work 40 hours a week and get $100k salary. but, conversely, no reasonable person wants to work 40-60-80 hours a week and get $20k salary either. as it has always been, people are willing to work for their own reward; few people are willing to work to make someone else rich at their own expense.
also, j makes a good point. back then, it was feasible to work such long hours because the home front was taken care of. but now, it seems like the only people being promoted are ones with no kids and a tolerant spouse, single, or much older kids and a tolerant spouse. regular folks with a family can’t compete.
j
vic, i don’t know the answer to this question for sure, but i’m guessing your wife didn’t work outside the home and therefore was able to make all that work-life balance possible for you? many men in your generation were able to “do it all” because they had a stay-at-home, all-in-one partner/mother/social events coordinator/chauffer/cook/maid/etc. i’m not downplaying that role by any means… my mom stayed at home with me and my siblings, and i will be eternally grateful for the benefits i received from that arrangement. but, without someone at home to take care of all the day-to-day tasks, your scenario would hardly be possible.
and, since my generation typically has both partners working outside the home, working 70-90 hours a week just isn’t feasible.
by the way, i would *love* to work for whomever said they work long hours jan-april and then only 25-30 hours a week the rest of the year. i’m expected to be in the office 40 hours a week *minimum* all summer and fall, in addition to the crazy busy season hours!
vic
i have been in public accounting since 1976 and a partner since 1985. i have 4 children (all with the same wife of 34 years)and spent time coaching their athletic teams and leading their youth groups at church. i have a great relationship with all of them, and one of my children works in our firm. my wife and i continue to be very active in church and i continue to coach young men.
i have worked hard, but pa has afforded me the opportunity to be involved in these other activities because of the flexibility in working hours. i don’t make ridiculous money, but pa has provided for my family. i am convinced that if someone works hard and is focused on doing an excellent job when they are working, they will be able to succeed in both the workplace (pa) and at home with the family. the key is having the same focus on doing the right things at home and using the time there wisely.
jerry
i’m a 30 yr old male, and i left pa after working through 1 busy season jan – apr. i could already see that it was not worth it for someone who was married (i married at 20). i was married for four years at that point, and from looking at the other people working there, i was like no thank you.
at a staff meeting, some small talk included a guy a couple years older than me talking about the tough dating scene due to the hours, etc. a manager said, “just go out and tell the girl how much money you make…” lol, losers.
gen y here, all the way, and no we’re not lazy. we’re just not stupid when it comes to the wage slave culture we have in society. there is nothing wrong with wanting it all with the least amount of work. i look at it as increasing the “life margin.” and isn’t capitalism about increasing margin?
gtfo to all the senior citizens who “back in my day i worked all the blah blah blah hours to get blah blah blah money.” well, don’t you feel special. i would rather have a balanced life with my family. having a child has changed me even more.
i work in private, and even there i see my older bosses missing out on their families. money is good, but i can see the frustration also. it is turning me off.
also, i doubt there is a “shortage” of accountants. i think the powers that be would love nothing more than to increase the supply of professionals in the market so that wages can be suppressed.
steven
i don’t think gen y is lazy. i just think they have a different set of values because they grew up as latchkey kids, in single parent homes, and watched their parents get laid off after decades with a company. you can’t motivate them with a reward that may be 20 years away. you can’t even say with certianty that there will be public accountants in 20 years with the pace of change now.
joy
i work for a small accounting firm and will be leaving after this year because my boss has just added a partner that he has chosen for his successor. at the point in time i left my former employer, i should have started my own business. i am just tired of working myself to death for this boss who will never retire or see merit in my work in a tangible way. there has been no raise in over a year and there aren’t any bonus pay.
alan
john, i totally agree with you. i am 59 and been doing this about 28 years. it is a very good way to work and live. yes, tax season is hard, but i get paid well for it.
john
how spoiled the younger generation is. what profession pays you $100k a yr & you go home at 5pm as somebody earlier said he wanted.
yes, i work 95 hour weeks from jan thru april, but i make up for it by working 25-30 weeks the rest of the year. yes i missed my children when they were younger that first part of the year, but you don’t make $200k a year without some sacrifices.
i worked in the private sector straight out of college before moving into public accounting. private accounting was boring me to death! it was the same thing, month in and month out. public accounting is different all the time. i am 100 times a better accountant for the exposure public accounting has given me. public accounting is one of the few fields left where you can work for yourself.
i wouldn’t trade this life for anything and, at the age of 58, i have been doing public accounting for 30 years now.
jason m blumer, cpa
wow, this article hit a sore point!
we at the thriveal +cpa network are going to build an alliance of like-minded cpas. our firm works out of coffee shops in jeans and flip flops with cool people all across the country.
i think public accounting is fun, innovative and creative. you can make it that too… but you have to run your own show to get there.
interested? join us here for more to come…
darren
like i mentioned earlier, i would still like to hear comments from cpa firm partners specifically regarding how their career has meshed with their family lives.
for instance: are you married? if so, is it still your first spouse? are you divorced? was your relationship with your spouse strained as a result of the time and effort needed to become a partner?
do you have kids? are you satisfied with the amount of time that you spent with them growing up? if your children are grown, do you have good relationships with them?
i would like to know whether or not partners with families/children feel that the reward for being a partner was worth the personal sacrifices that they made to get there. i once sat next to a gentleman on the bus who was a partner at a law firm, probably 50 years old. i asked him this very question and he seemed very sad when he thought about it. he said on one hand he always provided well for his family, but on the other hand he has two grown daughters and he feels like he missed out on watching them grow up. is this typcial??
j
cpa firm owner: i disagree. there are those in every generation who think they can make a lot of money without putting in a lot of work. however, i think the tendency of gen y to value work-life balance is not laziness, but a realization that time for family and non-work pursuits is more valuable than a fat paycheck. we’re willing to live in smaller houses and drive less expensive cars in order to get quality of life.
two or three weeks of vacation a year (or even the four weeks i get) and leaving the office for a couple hours for ball games once in a while does not begin to equal being home every weekend and making 6 o’clock dinner with the family every weeknight.
cpa for 16 years
some very interesting comments, everyone should remember they choose to work in pa, we hire staff that come to interviews, if you don’t like the hours, then try your luck in private. sure tax season is long, but depending on where you work summer can be nice with much fewer hours. taking apr 16-30th off, that would be great, but then who would serve the clients? the partners don’t set all the rules, clients pay the bills, they let me afford a new car and the staff a new car.
most firms do pay for performance, and at most firms i have worked at the salary increases have always been good if not great. everyone hired into a cpa firm has a chance to be an owner, can you say that about private?
a lot of comments about making partners money, of course when the cash dries up from nov-feb in all small firms, i don’t see the staff putting money into the business to make payroll, some of the comments above are valid issues i once faced, but everyone should remember cpa firms are a business like all the clients we work on, the owners make more than the workers, it is part of life, cry about it all you want, or work hard and be an owner some day.
our firm treats our staff great, flexibility in hours, 18+ days of pto, raises every year, parties, etc. life isn’t bad at every cpa firm.
wradical
the fact that the mid-level staff would bail out, by a 2-1 margin is no surprise. that’s the group that’s stuck.
cpa firms would do well to compare the pyramid-shape of the staffs in most cpa firms with the two-tier structure (partners and associates) that prevails in law firms. in the law firms the partners aren’t all equal, either, but even the junior partners have more credibility, which enhances their ability to bring in more business.
as a manager, i have zero incentives to bring in new clients. it means more work for me, and no extra compensation. (after all, we’re supposed to help build the firm for the future, but we won’t share in the future, either.) and if the new client has a problem with fees or service, i don’t have the authority to fix it.
another great threat to the traditional cpa firm is what will happen when health care reform really kicks in and health insurance truly becomes portable. firms will find out just who has been staying around because they couldn’t afford to leave the health plan.
beth
i left pa 9 years ago (after only 5 years, and having a kid). i left for a 50% increase, a 40 hr work week, and started w/ a contract to earn 3 weeks of vacation per year. life has definitely been greener on the private industry side.
edward greenlee
i’ve been involved in pa for over 25 years. much has changed and not for the better. part of pa’s problem is the perception of the public of what we can do for them. last year i took the step to address the problems my practice has faced and have developed a multi-family office. it combines pa services with wealth management. now instead of serving hundreds of tax clients, i can focus on just a few families.
cpa firm owner 22 years
the problem with the younger generation, y generation, is that they think they should all make $100k/yr and go home everyday at 5pm. the real problem with the y generation is that they have no idea what its like to actually run a firm day to day and deal with fee pressures from clients, etc. but based upon my experience over the last 22 years with my clients, its not always rosier on the other side! when is the y generation going to wake up and finally learn that hard work and dedication is what made this country great and strong. yes, i do believe you can balance work life with family, and my employees all receive a minimum of two weeks vacation to start and three after 5 years. and i have always been flexible with kids sports, etc and letting my staff move their hours around to achieve this balance. but what i want in return is commitment to the firm and its clients.
anonymous
j,
as a 25 year old male in the profession, i agree with darren. you only live once, family and other relationships are what matter. i plan on staying in pa until 35 at the latest. it’s not worth it. they couldn’t pay me enough to want to work the hours pa requires.
j
darren – as a gen y female who is currently struggling with whether to have kids or a career, i find it very interesting that you, as a male, are considering the work/life balance issues that women have struggled with in the past few decades. seems it used to be that the (mostly male) parters had a spouse at home in a support role (taking care of the kids and all the domestic duties) so they could spend insane hours climbing the ladder to where they are now. i’m sensing a trend where gen x/y men are becoming less willing to sacrifice family time in order to make it to the top. are there any other men out there who can lend perspective on this issue?
darren
“fed up”…i don’t think you’re alone.
i would be very interested to hear comments from current cpa firm partners who ascended to partnership positions the traditional way (as opposed to those who started their own firms) regarding the impact that the time and effort they put in to get there had on their relationships with their children and spouses.
i don’t sense a great deal of genuine happiness in the majority of partners that know personally. they’re constantly out of town. they’re not as involved in their kids’ lives as my dad (who worked in a factory) was with me. those with grown children don’t seem to have close relationships with them. i’ve worked for 9 different partners and only 2 of them are still married to their first spouse.
i’m only 30, so call me generation y, but this is the perception that staff accountants have of the sacrifice needed to become a partner at an accounting firm. i checked my partner aspirations at the door when my wife and i had our first son three years ago. no more overnight travel, no “networking” (that word makes me shiver) on my own time, no pressure for practice development. it was the best career decision i’ve ever made. if i ever want to make real money, i’ll do it when my kids are grown up.
annoymous
i so agree – i don’t want to miss my child grow up just to make my moody selfish boss rich!
anonymous
wow – anonymous, 9/15 – great comments – i would come and work for you in a heartbeat!!!
anonymous
great to know i am not alone out there with some of these comments…14 years public acct and would love to bail & go private! going nowhere fast in this dead end repetitive boredom and missed my son’s growing up!
what is the profession? « the gscpa house of blogs
[…] this is a growing trend of “a one-way stream away from the profession.” (see the article at http://cpatrendlines.wpengine.com/2010/09/13/1-in-5-junior-staffers-planning-to-quit/ ) what struck me wasn’t the 20% turnover rate, but that the article assumes anyone leaving public […]
anonymous
if only i could afford to survive while i could build my own firm. i would provide:
1. work based on developing specific skill sets and training toward personalized career goals.
2. immediate feedback and evaluations 2 to 4 times per year.
3. pay for performance.
4. clear standards and expectations on all engagements.
5. april 16 to april 30 off. thanksgiving through christmas off–paid. i don’t need you to pay for yet another lexus for me.
6. clear path to partner. what you need to do when.
will
i agree with some of the comments. i have friends that switched to jobs outside of public accounting. they say the hours are better, the pay is about the same, sometimes better considering cpa are willing to work longer at companies and so get promoted faster. at a cpa firm, it sometimes feels like i’m just working to make the partner’s money, while i’m busting my butt 50+ hours a week only to get a 3% raise at the end of it all. life outside of public accounting sounds better all the time.
fed up
being a great auditor or tax expert is not enough to make it to the top paying jobs.
networking and bringing in business is the only path to partner and serious money in public accounting and after working 40-50 hours a week may to december and 50-65 hours or more from january to april it is very difficult to go out and network on your own time especially in small firms where there is no support to help you in networking effectively.
after 25 years of having the carrot of partner held in front of me it is starting to look really moldy. that is 25 years of lower pay than my peers in private industry , no overtime compensation and a busy season bonus that barely comes to minimum wage for the time worked.
it would take me the rest of my life to catch up if i were made partner which at this point is unlikely. no wonder why people want out. am i bitter?
steven
there have been issues with the pa industry for many years. now we have the regulatory agencies, government entities, and market forces putting pressure on us as well. i’ve been in the business 10 years. i’ve seen many changes. its not what it used to be.
zanze bar
the view from outside for most jobs is always rosy.
when one works 55-60 hours (chargeable) a week, for 4 to 5 months a year, and has to deal with constant bitching at work, it ain’t worth it.
it’s not the money, stupid!
yogi
from my personal experience…i don’t think i care enough about being rich to put up with what i have to do to get there. i think i would rather make about 100k and go home at 5 every day. most people on the street would agree that that sounds awesome.
jess scheer
the quick answer to your question is “yes”– there are a number of reasons for the anticipated spike in voluntary turnover. there’s the usual life decisions that got postponed during the worst of the downturn. but there’s also a number of factors, both inside and outside the profession, that are exacerbating the situation. the latest issue of partner’s report examines many of these issues. but i’d be glad to discuss this with you in more detail.
jess scheer
jscheer@ioma.com
earl rudolfo
rick, i’m wondering about the reasons for this trend – namely that “i in 5 junior staffers are planning to quit” and “mid-level employees (those between partners and junior staff) say they too would quit public accounting if they could.” is it a dissatisfaction with the accounting profession? or because of the working environment? or some other compelling reason?