covid launches a new reality: now what?

^click to play: aquila addresses covid crisis response strategies.

eight new trends you can’t ignore in the new normal.

by august aquila

every day we get a clearer picture of what the future holds for the accounting profession, business in general and the overall population. while the future may look daunting, we will do our best to make the most of it and come out stronger. it’s what we have always done.

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nevertheless, don’t plan on the old ways coming back. i just read that more than 60,000 accountants have already lost their jobs. perhaps, the war for talent will be over. there will be further reductions in the professional service workforce and firms will be able to pick and choose from the talent pool.

i’m not 100 percent sure that all the following changes to the way we operate our firms will happen, but i am confident that many of them will in one form or another.

1. when i was a young partner, it was not unusual to be at the firm late at night. it was common to run into fellow partners and staff in the coffee room. that is going to be an experience of the past.

while firms have toyed with working remotely for several years, it has not been something that was widely done. the pandemic forced firms into doing it and they have found that it works. and it works quite well.

people who work remotely are more productive overall and have a better quality of life because they do not have to commute. once the dust settles from the pandemic, remote workers will be the norm rather than the exception. the result – firms will need less real estate in the future, fewer support people, but more investment in technology.

2. speaking of technology, how are we going to manage a remote workforce? what is going to replace the coffee room chats, the sharing of information in the hallway and so forth? what technology will we need to manage this new reality?

technology is efficient and in the long run, less expensive than how we operated in the past. we will think twice about getting on a plane for a half-day meeting or audit presentation. when we do go to a client, we won’t be sending entire teams because more work will be done remotely

finally, we are going to need new skills to use new technology. unlike the old days, when partners could postpone learning new technology, they won’t be able to communicate effectively with clients on zoom, chrome duo, etc. without being able to use the technology and actually know how to communicate in a virtual world

3. we’ve talked about the “silo,” “lone wolf” partner for many years. will the new environment finally be the death of this type of individual, especially in the age of collaboration and teamwork? it’s going to be hard to be territorial in a virtual world.

4. working at home has many benefits, but it also has drawbacks. i know. i’ve been consulting and working from home for 20 years now and my workday never ends, my week never ends. firms had busy season, non-busy season, and summer hours. how will we create new boundaries for our remote workforce?

firms are going to have to deal with the mental health issues of their people. many professional service employees were dissatisfied by the way firms were responding to the pandemic. larger consulting firms are now offering mental health services.

5. a potential financial crisis is coming. there will be a sharp drop in demand for accounting/tax services. small and medium firms are going to face a tsunami of failed business by the end of the year. these are small business owners who won’t be coming back in 2020 or 2021. plan for a major upheaval in your clients’ businesses.

6. firms need to be prepared for this financial disaster and start preparing a contingency plan looking at employees, partners, and long-term pending investments. a major recession is coming, and firms will feel the impact through a decrease in fees. will this cause firms to seek merger partners, or merely close their doors?

7. conserve cash and do not make interim profit distributions to partners. firms may even need to have a call for capital.

8. firm governance will also change. decision making will need to be done quicker. every partner, especially in smaller firms, will not be involved. partners may have to give up controlling everything. more decisions may have to be made at the middle or bottom rather than at the top of the organization. flatter organizations will be able to react quicker.

this is the new normal and firms are adjusting to it. there is no going back to the old way. stay well and plan!

 

posted on may 20, 2020