Recruiting and Retaining Experienced Accounting Professionals
By J. James O’Malley, Former Andersen National Director of Experience Recruiting,
Jim is a Managing Director at Stanton Chase focused on helping professional service and financial service organizations with critical talent needs. For over 30 years, Jim has leveraged his passions for executive search, talent acquisition, workforce planning and analytics, and executive coaching to solve a variety of talent acquisition challenges. For more information and to contact Jim Click Here.
Recruiting experienced professionals has long been the Achilles heel for most accounting firms.
Keeping them can be equally agonizing, with overall industry turnover rates as high as 15 to 20 percent. Many of the largest firms have compensated by building large campus recruiting machines, but within the last two decades, even these big firms have struggled to grow and develop their own fast enough to keep pace with growth opportunities in the market. The smaller firms, which are representative of the vast majority of public accounting, are also being profoundly impacted and, for all firms, the inability to hire experienced professionals is further exaggerated when it’s time for succession and no one is ready to take over!
Accounting Today has spent significant time in the past focused on people issues within the profession. In 2016 they devoted a series of articles on “20 days to a better firm” and a few months prior to that, Paul N. Iannone wrote about the challenge in an article, “Filling the Succession Gap.” Iannone pointed out that many smaller firms are being forced to put themselves up for sale or are being gobbled up by bigger firms simply because their bench of experienced leaders is thin. His point is spot on.
But, in my view, this is only part of the problem. Succession is important, particularly for the future of any firm, but what about the present? The dearth of experienced professionals has certainly contributed to the problems of succession, but frankly larger and more immediate problems loom when the clear majority of public accountancy firms can’t:
· Compete for existing work due to lack of experienced staff;
· Execute on existing work, due to shortages of experienced staff or staff departing for other firms or the private sector;
· Perform the quality of work their clients should expect due to errors in work and missed deadlines
Sound familiar? If so, what can you do about it?
Recruiting the experienced professional is both an art and science that very few firms have ever mastered. Some fail to commit the necessary resources and budgets to ensure they have the right staff at the right levels. Likewise, more often than not, firm leaders pay little attention to recruiting.
What needs to change matters for the future of our industry and the time to change is now. Accounting Today published my article "To Mitigate Risk in Recruiting for Your Firm, Take These 3 Steps Now” and the same principles I referred to in that piece about risk management can be applied to ensuring that you have enough experienced staff. Briefly, they are:
1. Allocate adequate budget for HR and recruiting
Firms often scrimp in their recruiting budgets, failing to realize that frugality can have the opposite effect in terms of opportunity loss. Your people are billable to the client. If you don’t have enough people or can’t recruit them fast enough, then that results in lost opportunities. Recognize that each day a key position remains unfilled is another day without revenue coming in the door.
2. Monitor the state of your workforce
Task someone in your firm with accountability for your overall workforce as well as the skills to assess your talent. That individual should “own” workforce and succession planning, monitor key metrics such as retention rates, rate of retirements, as well as potential pipelines of new talent for all areas of your business. Responsibilities also need to include monitoring the rewards structure to be sure it is competitive. This position can be in operations, HR, finance or a firm leader.
3. Hire the right recruiters
Ensure that your recruiters are capable of assessing the technical qualifications and cultural fit of the individuals they recruit. It is absolutely critical that those who lead the recruitment function have the right people in place—with the right training—to do their jobs. Too often, rookie recruiters tasked with sourcing critical roles actually have little idea of what those jobs entail. If you can't hire or find the right resources, consider partnering with a recruiting consultant with an expertise in your profession.
How Do You Know It’s Working?
It’s often said that if you cannot measure something, you cannot improve it. Recruitment (as a subset of HR) has admittedly long lagged behind other functions in establishing meaningful performance metrics. Today, there is a shift in thinking. While metrics may help you evaluate the efficiency of your recruitment function, that’s about it. What you really need to know is whether the work you do in recruiting talent is materially raising the bar on the quality of people joining your organization. That metric—and the one that really matters—is called quality of hire (QOH). The downside is that there is no “one-size-fits-all” algorithm to measure it. It will mean different things for each business and possibly even for each individual contributor within each business unit.
QOH is also pretty subjective. Do you base it on a performance evaluation system? When do you measure it? At six months into the job? Twelve months? Questions abound, but there are no easy answers since the metrics and measurement process must be tailored to your organization.
Once you’ve established this metric, ensure the process of tracking and analysis isn’t overly complicated or unwieldy. Recruiting tools and technology have made this much easier. The same technologies can also support and enable decision-making for strategic workforce planning and can be used to gather critical talent-related business intelligence. In recent years, this has evolved into a profession right in front of our eyes.
What Does Meaningful Change Look Like?
As a result of applying these remedies and then measuring for success, your firm can become far more proficient in forecasting staffing shortages and ensuring that you have the right number of staff, seniors and managers now and in the future.
Beyond more precise forecasts, meaningful change also requires three additional strategies. First, firms must recognize that staffing cannot be done “just in time.” You need to recruit constantly; not just fill openings as they occur. You must get used to the notion that you will always be in recruitment mode.
Second, retaining this hard-to-find talent is critical, so firm leadership needs to devote more time and energy to the “people” side of the business than ever before. Investments need to be made for the continuous care, mentoring and development of staff.
Finally, firm leadership will need to take a hard look at opening their coffers and admitting partners sooner than what has occurred historically or suffer the consequences.