four tactics for keeping the best talent, from a new salary survey.
by rick telberg
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the three most important words in practice management today are
- retention
- retention, and
- retention.
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high turnover has practically become synonymous with the larger public accounting firms, with turnover rates reaching as high as 30 percent. the aicpa top issues survey says quality staff ranks as the top concern for u.s. accounting firms, hitting number one for the first time post-recession in 2015, and among the top ever since.
unemployment in the united states has fallen to an almost unprecedented level, a level indicating what is effectively full employment. and unemployment in the financial industry is about half the national average—just 1.6 percent the last time we checked.
most of that 1.6 percent probably don’t even want jobs. if they did, they’d have a line of desperate accounting firms throwing money, benefits, perks, and promises at them.
hiring is, of course, crucial to any firm larger than a sole proprietor. but energy and resources would be better spent on retaining current staff and professionals than on continuously searching for new professionals to replace the ones that have left.
why should more effort be put on retention? the reasons are many, but the main one is that old favorite: moolah. the society for human resource management says, “research suggests that direct replacement costs can reach as high as 50-60 percent of an employee’s annual salary, with total costs associated with turnover ranging from 90-200 percent of annual salary. examples include turnover costs of…$150,000 for an accounting professional.”
the new accounting principals salary survey suggests four tactics for retaining staff and professionals:
- keep employees engaged.
- develop career paths for everyone.
- prioritize work/life balance.
- reward them with benefits, bonuses, and raises.
none of that is easy. the rewards part hurts, of course, but that’s the price of admission. and the other tactics demand perpetual effort, constant attention, and some creativity.
by 2025, millennials will account for 75 percent of the american workforce. their expectations are not the same as those of their parents, the baby boomers who grew up in a galaxy far away.
- there’s a lot to distract millennials, so it’s hard to keep them engaged.
- millennials don’t expect a career path up the ladder of a single company.
- they are unwilling to dedicate every waking hour to the office.
- being in the financial profession, they know about money and they know what they’re worth.
retention is also going to involve constant training in technical areas. the world economic forum found that “nearly 50 percent of subject knowledge acquired during the first year of a four-year technical degree is outdated by the time students graduate.”
that fleeting half-life of knowledge applies to not just students but employees as well. in a few short years, they might as well forget half of what they knew, and they’re going to have to fill that gap with updated knowledge. in that, it’s becoming increasingly hard to hire new people, “updating” current employees is the only option.
the rapid obsolescence of knowledge shifts the emphasis that cpa firms place on incoming talent. more important at the hiring stage are the non-technical skills that transcend the evolution of technology. the most important skills to look for in new hires are the ones that never get old:
- communication
- leadership
- critical thinking and problem-solving
- anticipating and serving evolving needs
- synthesizing intelligence of insight
- integration and collaboration
the accounting firm that manages to hire people with those qualities had better do whatever is necessary to hold on to them.