CPA firms trying to attract and retain top talent should emphasize career growth opportunities, salary and paid time off while maintaining an open-door policy that makes management accessible.
That summarizes the key findings of the AICPA’s Private Companies Practice Section (PCPS) 2011 Top Talent Survey, which aims to help PCPS members and other CPAs better understand what drives high-potential CPAs to join their firms and stay on board.
The survey, completed in February in partnership with Next Generation Consulting, gathered detailed information on topics such as compensation and benefits, education and development, environment and culture, and work/life balance. The poll also asked partners which factors they believe are most important to their best young performers, making it possible to compare responses between the two groups. All told, high-potential staff members, CPA firm partners and leaders in business, industry and government completed 1,195 questionnaires (see sidebar “Reaching the Top Talent,” below).
Reaching the Top Talent
The PCPS emailed the 2011 Top Talent Survey to partners and HR professionals at CPA firms, businesses and government entities in all 50 states and the District of Columbia. Firms and other organizations were asked to pass the survey to the CPAs they believe have the most potential.
These emails generated most of the responses. But the PCPS also advertised the survey at the Winning Is Everything Conference, in numerous AICPA newsletters and publications and with various AICPA LinkedIn groups. CPAs also could have accessed the survey through these channels.
Last conducted in 2006, the survey extended its scope this year to business, industry and government and also examined specific demographic groups for the first time (see sidebar, “Demographic Profiles”).
High-potential, nonpartner CPAs in public practice (see sidebar “High Potentials at a Glance,” below) remained the main focus, however, and the study revealed that the economic upheaval of the past few years has made a major impact on work environment and priorities. The good news is that partners appear to be aware of these changes and, with a few exceptions, understand the priorities of their budding stars (see Exhibits 1 and 2). There is room for improvement, though, in implementing formal mentoring programs (see full survey results at tinyurl.com/6k7wfm9).
“It’s critical for firms to understand how to make the best use of limited resources,” said James Metzler, CPA, AICPA vice president–Small Firm Interests. “Using the PCPS Top Talent Survey findings, they can design recruitment and retention efforts that really meet the needs of their most valued professionals.”
High Potentials at a Glance
On average, the high-potential CPAs in public practice who participated in the PCPS survey:
- Have nearly 14 years of experience as a CPA.
- Have been with their current employer for more than 10 years.
- Are committed to the profession; two-thirds said that, if given another chance to choose a career, they again would become a CPA.
- Would like to be partners or senior leaders in their firms.
The PCPS study found that the expectations of the best young CPAs remain remarkably consistent before and after they are hired. The most valuable staff members prize career development and compensation such as salary and paid time off. Perhaps with an eye toward professional growth and a less stressful work environment, they also appreciate ongoing communication and comfortable interaction.
PARTNERS AND TOP TALENT: SAME GOALS, DIFFERENT PRIORITIES?
Firms should focus on these key factors throughout all phases of a high-potential CPA’s career, from candidate selection through onboarding and development.
When accepting a position at a firm, top talent seems particularly concerned about mid- and long-term opportunities (see Exhibit 1). Career growth, open-door/accessible management, and retirement savings plans are key motivators, but partners undervalue them. On the other hand, partners place more importance on the firm’s reputation or prestige than high potentials do.
There’s also a slight gap between what the two groups see as the star job candidate’s top priority. While high potentials rated career growth as their top attraction factor, partners ranked it 6 percentage points behind salary.
That’s not to say that partners don’t understand the importance of career growth opportunities. It did rank second on the partners’ list, and managing partners such as Marc Parkinson, CPA/PFS, of San Jose, Calif.-based Petrinovich Pugh & Co. LLP, know to address the issue during the interview process.
“When I meet with a candidate, I always talk with them about where they are going,” said Parkinson, a member of the PCPS Executive Committee. “This discussion is a very important piece of helping the candidate see a great deal of room for advancement. I purposely speak with them about what their future may entail. Those discussions must start even before employment.”
When it comes to retaining top talent, partners generally understand what matters to their high potentials. However, partners significantly undervalue two areas: career growth and retirement savings plans (see Exhibit 2).
Scott Kies, CPA, managing partner of Tucson, Ariz.-based Heinfeld, Meech & Co. PC, and a member of the PCPS Executive Committee, bridges any gaps by having one-on-one meetings with his rising stars. In each meeting, Kies praises the star’s performance—an effort that he said proves effective because many young CPAs value recognition and a simple thank-you. Kies also uses the meetings to discuss the firm’s plans for each star and compare them with the star’s expectations. This type of communication is key to keeping top talent.
PRIORITIES DIFFERENT THAN IN 2006
The working environment for CPAs has changed dramatically in recent years. The recession prompted CPA firms to lay off tens of thousands of accountants, and high-potential CPAs have felt the impact. Asked to rate how the downturn affected their firms on a scale of 0 to 10, with 10 indicating the highest impact, more than 70% of top talent answered with a score of at least 5 and 41% responded with a score of at least 7.
That could explain why high-potential CPAs in 2011 were more concerned about their billable time and chargeable rates than about nonchargeable time such as training and internal projects (see Exhibits 3 and 4). It also makes sense that work/life balance has become less of a priority given concerns about job security and an understanding that more might be expected from key firm members in the wake of layoffs.
Respect for company mission and trust in leadership also decreased in importance in various degrees. The most dramatic change came with “respect for company mission,” which dropped from the No. 1 retention factor in 2006 all the way out of the top 20 among both retention and attraction factors in 2011. The PCPS postulates that high-profile accounting scandals, such as those at Enron, Tyco and WorldCom, in the early and middle part of the last decade accounted for the emphasis on mission and reputation five years ago.
The feelings of high potentials about how their firms handled the recession are mixed. Some 41% reported less trust of their firm or leadership. Only 13.7% said their trust increased during the recession. This might indicate why open-door/accessible management remained high on the priority list. High potentials probably want to be informed of critical firm information and see how their future aligns with the firm’s strategy.
“Open-door policies are a high priority for top talent because we see ourselves behind those doors eventually, and we want to know how to get there,” said Michael G. Maksymiw Jr., a nonpartner CPA at Carney, Roy and Gerrol PC in Rocky Hill, Conn. “We start our careers with grand aspirations, but we need guidance on how to achieve our goals.”
THE MENTORING GAP
That guidance isn’t always available. While nearly 80% of high potentials said they participate in some form of mentoring, fewer than half are involved in a formal program. The firms that have established mentoring relationships have seen positive results, with 84% of participants reporting a benefit.
“There is no better teacher than showing someone what to do rather than simply telling them what needs to be done,” said William Pirolli, CPA/CFF/PFS, a partner with Warwick, R.I.-based DiSanto, Priest & Co. and a member of the PCPS Executive Committee. “Mentoring is critical to the future success of our profession.”
A POSITIVE PICTURE
Overall, the results of the Top Talent Survey are positive for the profession. Because high-potential employees often are role models in their firms, their feelings toward the firm’s leaders are critical. Firm leaders might not offer everything their top young performers seek, but they seem to be well aware of what’s expected. That’s good news, because the stakes are high.
For the first time, the PCPS 2011 Top Talent Survey gathered demographic information about high potentials in the profession. From that data, the PCPS staff created three fictional characters—Steven, Lane and Paul—to represent three demographic groups: nonwhites, singles and married with young children.
“The top talent profiles put a human face on the survey data,” said Rebecca Ryan of Next Generation Consulting, who helped with the Top Talent Survey. “Reading about Lane, Steven and Paul, firm leaders will recognize their own top talent, who share many of the same characteristics, all driven by the survey data.”
Following are brief profiles of the three characters, whose traits reflect the average of survey responses in each demographic.
Steven: Nonwhite, High Potential
Steven is a nonwhite, high-potential employee who has been with his firm for five years and works 60 hours a week. Steven has never been told he’s ahigh-potential employee, although he has consistently received promotions and increases in responsibility. The Top Talent Survey shows that nonwhite CPAs like Steven have had a less positive experience than their white counterparts. Specifically, nonwhites are significantly less likely to recommend their firm as a great place to work, less likely to believe that feedback from nonmanagement personnel leads to changes, and far less comfortable approaching management with questions and concerns.
In accepting and remaining in their current positions, nonwhites rated the following factors much more highly than their white counterparts:
1. Tuition reimbursement
2. Sabbatical leave
3. Firmwide diversity initiatives
4. Equity incentives
5. A mentoring program, formal or informal
More than 12% of the Top Talent Survey’s high potentials reported being nonwhite. The racial breakdown of those 61 respondents is as follows:
- 49% Asian
- 13% Hispanic
- 12% African-American
- 12% Two or more races
- 5% American Indian or Alaska Native
- 2% Native Hawaiian or Pacific Islander
- 7% Other
Lane: Single, High Potential
Lane is a single, high-potential employee who has been with her firm for 51⁄2 years and reached a senior manager position. Lane is not sure if the partner track is available to her. There are only two female partners in her firm, which still feels like an “old boys’ club.” Lane is representative of the 109 singles who responded to the survey. Of those, 58% are female and 42% are male.
When asked, “What one wish do you have for your firm or organization to continue to keep its best talent?” single, high-potential respondents said:
1. Increased compensation and benefits
2. Flexible work schedules
3. Recognition and appreciation of all employees
Paul: Married With Children, High Potential
Paul is a married, high-potential employee with two children younger than 6 years old. He celebrated his 10th anniversary as a CPA in the fall. He was told by his managing partner, Steve, that “we have to wait until the economy picks up to promote you to partner.” Paul doesn’t like to wait, but he already has invested so much in his firm.
The survey received responses from 136 married individuals with children under the age of 6. Of these new parents, 52% are male and 48% are female.
When asked, “What one wish do you have for your firm or organization to continue to keep its best talent?” married, high-potential respondents with children said:
1. Increased compensation and benefits
2. Flexible work schedules
3. Better communication from partners on firm path and succession planning
Click here to read the online-only sidebar “High-Potential CPAs, the BIG Picture,” which looks at up-and-coming CPAs in business, industry and government.
- Nearly 1,200 CPAs in public practice, business and government participated in the AICPA’s PCPS 2011 Top Talent Survey, which sought to uncover what factors are most important in recruiting and retaining the CPAs who have the most potential to become leaders.
- Career growth opportunities, salary and paid time off rank as the top attraction and retention factors for high-potential CPAs. Accessible management, a comfortable working environment and interesting client projects also carry a lot of weight.
- Partners have a good understanding of what their up-and-coming stars are seeking in their jobs. There are some differences in prioritization between the two groups.
- The priorities of the best nonpartner CPAs have changed since 2006, the last time the Top Talent Survey was taken. With the recession leading to layoffs among CPA firms, top talent is placing more emphasis on billable tasks and less emphasis on some perks, such as work/life balance.
- The survey provided demographic breakdowns for the first time and also expanded into business, industry and government.
Yasmine El-Ramly (firstname.lastname@example.org) is a project manager with the AICPA’s Private Companies Practice Section in Durham, N.C.
To comment on this article or to suggest an idea for another article, contact Jeff Drew, senior editor, at email@example.com or 919-402-4056.
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Private Companies Practice Section
The Private Companies Practice Section (PCPS) is a voluntary firm membership section for CPAs that provides member firms with targeted practice management tools and resources, as well as a strong, collective voice within the CPA profession. Visit the PCPS Firm Practice Center at aicpa.org/PCPS.