Recruiting and Retaining Top Accounting Talent
This chapter preview comes from the Double Your Accounting Firm book (Amazon)I’ve heard this story many times. Diana’s in the middle of building the “firm of the future.” She’s built a core team around herself. One day, her top accounting manager walks into her office, plops a resignation letter on her desk and gives notice. She didn’t see any warning signs. Everyone seemed happy… With financial recruiters, LinkedIn, and easy access to job listings, keeping top talent around can be one of the hardest things for a growing firm. Every day, firm owners feel stranded or under-resourced when recruiting top talent. Bigger firms pay more and offer more mobility, so they can often be more attractive to quality employees. When a small firm finally does hire someone excellent, they leave after a year or two, just when everything was starting to click. You’ve heard it’s more expensive to hire someone new than to keep old talent, and it’s true. The landscape for recruiting has never been more challenging and for those firms who sit outside a major hub, it can be even more challenging to keep a pipeline of candidates coming through the doors. As you grow, your process and team should be the constants. Making yourself a “career firm” leads to faster implementation of these steps, better corporate culture, and more profits. Every time a manager gets recruited to another firm because of money, you know there’s something wrong. When we zoom out of the industry, it’s not only higher salaries that keep employees. We see people of all ages leave one company for another that offers less pay and we also see people stay at a job that offers less pay when they could be making much more somewhere else. Simply put, pay isn’t the only thing people care about. Of course, we’re assuming that the compensation you give is adequate to meet a certain standard of living. Beyond that, the modern workforce is full of individuals who care about more than just a 3% pay raise. Because bigger firms have deeper pockets, they might be able to provide travel opportunities and they give a CPA a brand name to put on their résumé. So for a smaller firm like yours, it can seem daunting to rally the troops and keep your employees happy with other firms knocking at the door. But it’s not as difficult as you might think. As the younger generation starts to make up more and more of the workforce, there is a huge opportunity for your firm. These younger CPAs care about your mission and your culture, and they care about enjoying where they work. They want their opinions heard, their ideas explored, and someone who can mentor them. Larger firms say they can do all of this, but they simply cannot. Because of their size, larger firms run like a well-oiled machine and young CPAs quickly get squeezed into the role of being nothing more than a cog. As your firm grows, you can offer something these larger firms can’t. Flexibility. Flexibility, especially with younger CPAs, gives an intangible benefit to working with your firm rather than a Big 4. In order to keep growing and doubling your revenue, you need to keep the talent steady, growing, and happy. It’s your legacy you’re building. Your succession plan should be a priority. It would be best to nurture and grow your future from the bottom, up. But more and more, partners are actually being recruited into smaller firms. This will warn new talent coming into the firm that there is a problem on the team management front. You can see it on their website. If a handful of their partners only recently joined the firm in the past few years, it’s a sign there’s something wrong. Partners act as the generals and captains of the firm. In sports, they would be the coaches calling the shots. The more time the coaches and players have together, the better communication gets, and the more success they see. Look at your own firm right now. Do you have a solid set of partners grown from the bottom? Do you have managers prepared to take the next step in five years? Are your CPA practitioners enthusiastic about the future and not simply making a pit stop at your firm, intending to head to another firm in the near future? Now, I’m not saying you’re going to have zero turnovers. It’s virtually impossible to manage that and you will take those bumps and bruises as they come. However, you can trim turnover more and more if you focus at the very start of the relationship: find the right talent and sort through them to find long-term employees. It is tempting to simply fill in the holes as more clients rush through the door or as tax season kicks off. That’s what most firms do; they quickly bring in a handful of interns or hire the first CPA they interview. Only later do they find out the person was an awful fit. They end up making excuses like, “But, I needed the body to do the work.” It’s about survival and I understand that. Sometimes you just need a Band-Aid. But as you implement these pillars, you will likely open up capacity and need fewer employees. Or you might get aggressive with your marketing and need to hire more. As a rule of thumb, it’s better to over-hire the right people than rush and hire the wrong people. Again, hiring a new employee is much more expensive than you think when you factor in recruiting fees, training, administrative costs to set up accounts, sign-on bonuses, and technology set up. But when you over-hire great people, at least you know everyone there will stick with it for the long haul. A new hire can also slow down work efficiency. Managers and practitioners must stop their daily tasks to meet and train the new hire, thus eating up capacity. But when you hire the right people who fit in with your culture, you don’t have to worry about constantly hiring. Along with that, you enjoy a host of benefits, including:
- Increased profits as employees become more efficient over time.
- A steady, enjoyable culture of long-term employees.
- A succession plan you can lean on.
- Happier clients who feel secure as they aren’t shuffled between team members.
- Closer relationships between team members, which creates a more positive and attractive work environment.
Problems with Retention and the Increase in Financial RecruitersI was chatting with a financial recruiter recently and discovered a disturbing trend. Normally, a recruiting firm has one arm and a batch of clients they regularly help fill roles for. It’s a faux pas to recruit a person that they have previously helped place. For example, if Firm A is a client to the recruiting firm and Firm B comes along needing a new CPA, it would be bad faith for the recruiting firm to dip into Firm A to fill the position, even if there’s a great fit. That’s the standard. The recruiting firm I talked with, however, had found a loophole. They had acquired and started a handful of firms. In their office, you can tell they are all under the same umbrella, but looking at them online, you can’t. These firms would pull what is called the fishbowl. One fish would jump out of one bowl into the other, and right after, a different fish would jump into the first bowl. So, Firm A loses a CPA to Firm B. Firm B had an opening because a CPA left for Firm C. Firm C had an opening because a CPA just left for Firm A. Confusing, right? Essentially, the recruiting firms, in order to keep their hands clean, would cross-pollinate. But they did it in a way to keep good faith. They have three recruiting firms cross-pollinating with each other and collecting commission checks on all three transactions. Right when the CPA in Firm A wants to move, a recruiter contacts CPAs in Firms B and C to drum up interest in Firm A. Then, the process begins. These recruiters pull in massive commissions; typically 10–35% of a candidate's first-year salary. To do the numbers, if a CPA’s salary is $60,000, a recruiting firm can earn up to $20,000 for a single placement. With the fishbowl technique, that balloons to $60,000 or more! Recruiters, with the dawn of LinkedIn, can now make contact with team members in a variety of ways. They can be as shameless as calling up your office and getting the team member on the phone to pitch. So, why is this important? Because in the past, most people graduated from college, got a job, and spent their 40-year career in that one position, regardless if they enjoyed the work. Now, younger workers buck this trend. Many millennials job-hop every two years, as they get bored at a position. These financial recruiters know this and lick their chops at the gold lying in wait. In the past, you could get away with letting culture slide. No one was quitting anyway. But times are different now. Candidates expect to be wooed. They expect a position where they can share ideas, no matter if they just graduated from college and know little about the industry. This younger generation, whether you like it or not, are the future of your firm and of the legacy you created. You cannot expect younger CPAs to behave and learn exactly as you did. You must adapt. Retention remains one of the hardest pieces of the puzzle in this decade. No more can you sit idle, strolling around the office with a “do as I say and no questions asked” attitude, neglecting to build trust with future leaders. Remember when you first started out? You knew little and probably made many mistakes. At some point, you may have had a firm partner take you under their wing, motivate you, push you to do better, and lay the bricks leading to a partnership. There’s more stress in the life of the working person than ever before. You already juggle pending deadlines, a family at home, friends outside the office, plus your hobbies. Taking care of your team is always a “wait until later” line on the firm checklist, but the reality is that you should make it a priority starting today. This chapter focuses on building up your company culture and investing in your employees. It’s sixth, not because it’s less important, but because it’s the one that takes the longest to implement and see results. Molding leaders for your future take months, then years. It’s an ongoing process you need to revisit each quarter. Every time someone leaves, ask why. Instead of getting frustrated with the person leaving and shunning them, as many firms do, sit down and have an open and honest discussion. Then sit down with current team members and openly ask, “John, I ask this not to intrude, but to learn. Have you had recruiters reach out to you about positions?” If they say “No,” they are lying and that’s a whole other issue. Even starting bookkeepers get solicited. When you hear “Yes,” dig into what kind of offers appeared attractive and which didn’t. Teach them to listen to recruiter pitches and discover ideas of what other firms are doing that might be interesting for your firm. It’s much like sending someone behind enemy lines, but you can learn so much. When you give a team member the freedom to entertain other offers and gather ideas, you build trust with that team member. It’s dangerous as you don’t want to come across as though you don’t care if they leave. Absolutely not. You need to make sure you approach it as though you want you to find ideas to implement so they enjoy working at your firm more. That’s the difference. In the past, finding a new job required scouring through the newspaper and even mailing in résumés. Now, you can have a bad day at work, go home, fire up a job board, message a recruiter, send out a few résumés and get called the next day to interview. It’s so easy and it’s dangerous for firm owners. These things happen every day, but it’s not because of just one bad day. It comes from a team member not understanding their importance, not feeling appreciated, and not being given the freedom they crave to explore their strengths. Articles to Go Deeper
- Retain Top Talent with a Better Work-Life Balance Program Within Your Firm
- 12 Effective & Genuine Techniques to Motivate Accountants
- 4 Surprising (and Creative) Ways To Motivate Your Accounting Staff
- 6 Tips For Hiring The Right Employee
- 10 strategies to retain and motivate employees
- 3 Key Strategies to Recruit and Retain Your Best Employees