why staff leave cpa firms… and how to keep them
the 14 top reasons they depart, plus insights from young employees.
by marc rosenberg
cpa firm staff: managing your #1 asset
the following data is from recent rosenberg surveys.
here’s what you’re looking for: marc rosenberg
more: how to solve the big disconnect in talent management | what relevance means for staffing in accounting | how accounting staffing has changed
how to solve the big disconnect in talent management
can you articulate your firm’s employee value proposition?
by marc rosenberg in collaboration with jeremy wortman, ph.d., owner of hrd initiatives
cpa firm staff: managing your #1 asset
“executives spend more time on managing people and making people decisions than on anything else – and they should. no other decisions are so long-lasting in their consequences or so difficult to unmake. and yet, by and large, executives make poor promotion and staffing decisions. at most, one-third of such decisions turn out right, one-third are minimally effective and a third are outright failures. in no other area of management would we put up with such miserable performance.” – peter drucker
more: what relevance means for staffing in accounting | how accounting staffing has changed
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what is talent management?
talent management is an umbrella term for how firms acquire talent, engage people in their firms, develop their skills and retain them. among many things, it addresses
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what relevance means for staffing in accounting
seventeen ways to improve.
by marc rosenberg
cpa firm staff: managing your #1 asset
the business graveyard is littered with major organizations that missed the boat by failing to see cataclysmic game changers happening right before their eyes.
- ice companies failed to get into refrigeration because they saw themselves in the ice business.
- railroads missed out on autos and aerospace because they didn’t see themselves in the transportation business.
- a ceo of digital equipment corporation said he couldn’t imagine why people would want a computer in their own house.
- it took the wright brothers five years to get the u.s. government to even talk to them about their invention.
more: how accounting staffing has changed
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in all fairness it’s extremely difficult, if not impossible, to anticipate and accept massive changes like these.
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how accounting staffing has changed
and two major drivers of that change.
by marc rosenberg
cpa firm staff: managing your #1 asset
“treat people as they are and they will remain as they are. treat people as they can be and should be and they will become as they can and should be.” – goethe
“you see, really and truly, apart from the things anyone can pick up, such as dressing and the proper way of speaking and so on, the difference between a lady and a flower girl is not how she behaves, but how she’s treated. i shall always be a flower girl to professor higgins, because he always treats me as a flower girl. but i know i can be a lady to you, colonel pickering, because you always treat me as a lady and always will.” – eliza doolittle in “my fair lady”
more: thirteen traits of partners you’ll want to keep | six rules for keeping partners happy and productive | why strategic thinking impacts your firm’s future | seven things good firms must do | five ways to separate accounting winners from losers | two factors determine firm profitability | don’t make firm profitability a goal | core values: why your firm needs them | five keys in compensating new managing partners | top 20 tough choices for the partner comp committee | voting on ownership basis? three better methods | what partners do and don’t deserve
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the ancient greek philosopher heraclitus said: “there is nothing permanent except change.” people fly and drive cars instead of using horses and carts. technology has replaced calculators, slide rules and the process for writing books. food is purchased at grocery stores instead of grown on farms.
drastic changes have occurred in the cpa industry as well. one of the biggest areas of change is how staff are managed and treated, as shown by this chart.
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help! a partner wants to retire really early
how big should the buyout be?
by marc rosenberg
the rosenberg practice management library
question from a reader: we didn’t contemplate an owner leaving before normal retirement age unless it was because of death or disability or we had to fire them. however, as we were discussing hypotheticals at a recent partner meeting, we came to the uncomfortable conclusion that, currently, there’s nothing to stop owners from accumulating large buyout balances and just walking in one day and offering up their resignation pursuant to our partner agreement, thus entitling them to receive substantial buyouts as long as they give us a one-year notice. our vesting provision has a very limited penalty for early retirement: the buyout is reduced by 2 percent a year for every year before 60 they leave.
more: thirteen traits of partners you’ll want to keep | six rules for keeping partners happy and productive | five ways to separate accounting winners from losers | core values: why your firm needs them | voting on ownership basis? three better methods | fifteen big questions for your next strategy session
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no matter what, we need to modify our agreement so that if someone wants to leave early, they can do so, but they must know there will be a stiff penalty. we don’t want our partners to see their vested buyouts as large savings accounts that can be withdrawn at any time. instead, we want them to see our buyout as a true retirement plan, one that is redeemed close to or at a normal retirement age. my current thinking is that we restrict it in a similar way to an employer-funded retirement plan. the first day you can withdraw is the day you reach 55½, subject to vesting provisions and stiff penalties for early withdrawal. we think there should be a minimum number of years as a partner in order to receive any buyout.
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thirteen traits of partners you’ll want to keep
choose wisely from the start and avoid problems later.
by marc rosenberg
the rosenberg practice management library
what characteristics do you want someone to possess before you invite them to be a partner?
leading firms across the country generally choose from the following:
six rules for keeping partners happy and productive
plus the first nine questions they must embrace for optimal profitability.
by marc rosenberg
the rosenberg practice management library
“when a corporation says move left, everybody takes a step left. in a partnership, when you say move left, three people go to the bathroom, four people move right and five people leave the firm.” – richard ungaretti, ungaretti & harris
more: why strategic thinking impacts your firm’s future | seven things good firms must do | don’t make firm profitability a goal | top 20 tough choices for the partner comp committee | tell potentials what partnership takes | disturb the present to improve the future
in cpa firms, as the partners go, so goes the firm. the partners
- bring in most of the business,
- manage most of the client relationships and engagements,
- develop and mentor the staff and
- manage the firm.
if the partners don’t perform these functions effectively, it is virtually impossible to be profitable and successful.
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why strategic thinking impacts your firm’s future
what do “disturbing the present” and “paradigm shift” really mean?
by marc rosenberg
the rosenberg practice management library
roberto goizueta, the late chairman of coca-cola, and certainly one of the top two or three ceos of the last 30 years, said it best: “challenging the status quo when you have been successful is difficult. if you think you will be successful running your business in the next 10 years the way you did the last 10 years, you’re out of your mind. to succeed, we have to disturb the present.”
more: seven things good firms must do | five ways to separate accounting winners from losers | core values: why your firm needs them | voting on ownership basis? three better methods | fifteen big questions for your next strategy session
compared to most vocations, cpa partners make a pretty good living. their success has been attributable primarily to a combination of the following:
- bringing in business
- providing great service to clients, which results in client retention and moving clients upscale in terms of services
- strong technical skills
- developing staff into leaders
- strong interpersonal skills
seven things good firms must do
good management gets them there.
by marc rosenberg
the rosenberg practice management library
if partners of firms across the country were asked what the key was to the success of legendary fortune 500 companies such as general electric, coca-cola, ibm and countless others, i’m sure that the words “strong management” and “strong leadership” would dominate their responses. yet, ask those same partners to evaluate their own firms’ management, and if they are honest, their responses would not be very flattering.
more: five ways to separate accounting winners from losers | two factors determine firm profitability | five keys in compensating new managing partners | what partners do and don’t deserve | five steps to transition to partnership
of all of the techniques for improving cpa firm profitability, none is more effective than strong management and leadership. yet, nothing is more elusive. why is this?
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five ways to separate accounting winners from losers
how many of these are you expert in?
by marc rosenberg
the rosenberg practice management library
if cpa firms did everything “right,” they could easily double or triple their income. doing things right includes effectively bringing in clients, charging high billing rates, maintaining strong realization, high leverage of staff to partners and keeping expenses down. it’s the rare firm that does well in all of these categories.
more: two factors determine firm profitability | don’t make firm profitability a goal | top 20 tough choices for the partner comp committee |tell potentials what partnership takes | disturb the present to improve the future
the path to profitability is different for every firm. but the truly profitable firms are successful at achieving one or more of the following:
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two factors determine firm profitability
you’d think accountants could agree on a common definition. nope.
by marc rosenberg
the rosenberg practice management library
if you asked the president of a fortune 500 company or the owner of a restaurant to define profitability, they would be able to give a quick, definitive answer. not so with cpas.
surely, you’ve heard the story, perhaps apocryphal, of the company that was interviewing for a new cpa firm. only one question was asked of each candidate: “how much is two plus two?” the firm that won the bid gave the answer, “how much would you like it to be?”
more: don’t make firm profitability a goal | core values: why your firm needs them | voting on ownership basis? three better methods | fifteen big questions for your next strategy session
the same can be true of cpa firm profitability. how do we measure it? you would think that the uncontested champions of measuring financial data, cpas, would have this down to a science. but such is not the case.
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don’t make firm profitability a goal
an example from outside the accounting profession.
by marc rosenberg
the rosenberg practice management library
it has been said that organizations should never have profitability as a goal. why? because profitability should be the result of an organization’s efforts, not its goal.
more: core values: why your firm needs them | five keys in compensating new managing partners | what partners do and don’t deserve | five steps to transition to partnership | disturb the present to improve the future
profitability is a measure of success in accomplishing core business goals. the disney corporation probably says it best in their mission statement, which is short and sweet, but very powerful: “our mission is to make millions happy.”
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core values: why your firm needs them
plus 12 examples. which work for you?
by marc rosenberg
the rosenberg practice management library
core values are the attitudes and beliefs that define a firm’s culture and a critical ingredient in a successful compensation plan.
more: five keys in compensating new managing partners | top 20 tough choices for the partner comp committee | tell potentials what partnership takes | disturb the present to improve the future
partners talk about the firm’s core values all the time, pointing out instances when someone’s behavior has clearly been impacted by them. these values are incorporated in processes throughout the firm, such as in the development and evaluation process, in the way income is allocated to partners, and in what raises are given to staff.
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