Hiring Generation X

The apple doesn’t fall anywhere near the tree anymore.
BY ANDREA T. JENNINGS

EXECUTIVE SUMMARY
  • GENERATION X ACCOUNTANTS are 21- to 35-year-old professionals who three years into their careers can command the same salary you worked 12 or more years to attain. Understanding who they are and what they want can help you hire them.
  • TODAY EMPLOYERS HAVE TO WOO seasoned applicants. Create an atmosphere that lets the individual know that he or she is important to you.
  • RIGHT NOW, YOUR FIRM OR COMPANY MUST PAY top dollar for qualified employees. Salary increases of up to 25% are not unusual. In addition, signing bonuses have become de rigueur.
  • SOME CANDIDATES ARE SEEKING something besides money: They want benefits and other perks that improve their quality of life.
  • GET THEM TO ACCEPT YOUR JOB by offering what they lack in their current position. Remember that people tend to move from pain to pleasure. Find out what they don’t like about their current job. Spell out how the offer you make will improve their situation.
  • THE CHANGES DON'T STOP ONCE the Gen-X employee is hired. If you want to retain these workers, be prepared to change your management style. This is the generation used to instant gratification.
ANDREA T. JENNINGS is vice-president of Atlanta-based Lucas Group, a nonfranchised recruitment firm specializing in the search and placement of financial professionals.

ote to baby boomer–age managers responsible for hiring Generation-X CPAs: This is not your father’s workforce. Or yours, for that matter. You are dealing with a group of 21- to 35-year-old professionals who three years into their careers can command the same salary you worked 12 or more years to attain. The candidate you want to hire is probably simultaneously considering offers from your competitors.

Contributing to their freedom to pick and choose the job of their choice is a robust economy and a national unemployment rate holding steady at a low 4.2%. Other demographics add to the bleak equation: Only 35 million Gen-Xers were born between the years of 1964 and 1978. When you were their age, you competed for jobs with 85 million baby boomers.

Gen-Xers Can Get What They Want

Today’s salary offers for accountants are astounding. Lucas Group, a recruitment firm in Atlanta, Georgia, recently placed a candidate making $41,500 per year after a year and a half of experience with a Big Five firm. A Fortune 500 firm lured the accountant away. The employee was offered $52,000 plus a $5,000 signing bonus.

Another candidate with four years of experience and a master’s degree was making $42,000. She did not have strong interview skills. When a prospective employer offered $55,000 with a $500 signing bonus, she turned it down, indicating she would consider changing jobs for nothing less than $62,000. Despite the fact that she did not make a great first impression, the company met her demands. It actually turned out to be a wonderful match.

Finally, a man with three years of experience with Deloitte & Touche and one year in industry left his job to relocate to a new city. His previous position paid $60,000,and he held a master’s degree. When a prospective employer offered him $55,000 with a $2,500 bonus and a $3,500 tuition reimbursement package, he turned it down, without a regret. He found the offer he wanted one week later.

Don’t let the ties or high heels they wear to interviews mislead you. They want to wear khakis to the office, or don sweats and telecommute from home. They want immediate authority, independence and a voice in major decisions. They are technologically savvy and can probably teach you a thing or two about the software programs you use every day.

If you want to hire a Gen-Xer, you need to understand how this workforce segment has changed the rules of recruitment. Because while you’re contacting references and examining GPAs, your firm or company is being scrutinized just as closely by the prospect.

WHO IS THE NEW RECRUIT?

Understanding who Gen-Xers are and what they want gives you an edge in formulating offers they will accept. The old rules of hiring—getting the best candidate for the least amount of money—no longer apply. In the past, employees tolerated employment circumstances that were less than ideal. Loyalty and tenure were rewarded, and changing jobs frequently raised eyebrows. Today’s job candidate has more choices and, therefore, more power. Employees are motivated by different criteria than they were in previous decades. Twenty years ago, the opportunity to move up the corporate ladder was enticing. Now workers want to skip the rungs and lead a cushy life-style from the start.

Job-hopping is a normal, accepted method of career advancement for Gen-Xers. Because there is a scarcity of candidates, the criteria for job selection and satisfaction have changed. Money is usually the main motivator—salary, signing bonuses and stock options have become common currency. Yet life-style issues also are critically important—and this is territory where smaller firms and companies can make their mark. Gen-Xers value factors such as flexible schedules, shorter commuting distance, interesting work culture and prestige. Titles and other amenities, such as offices, in-house gyms and day-care centers, carry a lot of weight as well. Burdened with tradition and bureaucratic human resources policies, accounting firms often have difficulty meeting their needs.

It might appear that relief is just around the corner with next–in–line Generation Y, but don’t count on it. Gen-Yers were born between 1979 and 1994, are 60 million strong and will soon enter the professional workforce. The increase in the workforce may give the small or midsize firm or company more choices, but life-style issues will be a major factor in their choice of employer, too.

COURTING A GEN-X PROSPECT

Recently, a 67-person, midsize regional public accounting firm in Atlanta sought to add a CPA to its team. A candidate with five years of experience was relocating to the area and researching the market for job opportunities. He interviewed with the firm and with Big Five accounting firms and received several offers. He selected the smaller firm because it offered more opportunity.

His new employer provided a $62,000 annual salary ($10,000 more than his previous job and more than the other firms bid). The smaller firm gave him greater responsibility and an opportunity to learn about international business, a specialty of the boutique agency. He was uncomfortable with the culture at the larger firms he saw and felt he could play a more important role at the smaller company.

If you are willing to offer more leadership responsibilities to a prospective employee, bring it up during the interview. It is an important selling point. That’s what made the difference in the following case.

A small, Dallas-based golf club manufacturer sought an accountant with a few years of experience. The hiring manager interviewed a female candidate who had worked for a private company for two years. She had graduated from a reputable accounting school with a 3.8 GPA and appeared very confident during the interview. The prospect’s strong accounting and communication skills placed her first on the list. After one interview, the manager wanted to offer her the job and a salary of $50,000.

The recruitment company that set up the initial interview advised the manager to wait. Both the company and the recruit would benefit from a second interview, it said. She needed an opportunity to meet her peers and learn more about her potential leadership responsibilities; the manager needed more time to get to know her on a personal level. That made the difference for the recruit—she was considering five other offers, but few outlined her growth potential. She identified well with the career path the manufacturer had outlined and took the job.

Exhibit 1: Average Annual U.S. CPA Salaries*
*Compensation and benefits for positions in accounting firms vary according to geography, market conditions and a number of other factors.

Source: Compensation and Benefits in Public Accounting Firms, 17th Edition, is available from Abbott, Langer & Associates, www.abbott-langer.com .

WHAT ARE YOU WILLING TO OFFER?

Today’s employers literally have to woo seasoned applicants. Many recruiters already have perfected this technique with prospective college graduates (see “Securing the Future”). The process is similar to a sorority or fraternity rush, only the prospect makes the selection. Companies and firms hold parties and events for the potential hires. Candidates are flown in to stay at expensive hotels and are lavishly entertained. There are outings where potential colleagues provide opportunities to build relationships. It’s essential to create an atmosphere that lets the individual know he or she is important to you.

The controller of Frito-Lay, Inc., understands this concept. He sends flowers or cookie bouquets to prospects, along with a personal note—and not just for top management positions.

BE PREPARED TO PAY

Right now there is a bidding war for the best accounting candidates. They can afford to name their price. Your firm or company must do what it can to pay top dollar for qualified employees (exhibit 1). Salary increases of up to 25% are not unusual. In addition, signing bonuses have become de rigueur. Expect to offer up to 10% or more of a candidate’s annual income for low- to mid-level management positions and up to 20% for upper management. Companies offering stock options or employee stock ownership programs have great appeal to Generation-X candidates.

Exhibit 2: Common U.S. CPA Firm Benefits
  • Retirement programs: More than 70% of firms surveyed have a 401(k) plan, including 13% that also offer a pension plan. Ten percent provide pension plans only.
  • Profit sharing: About 80% of public accounting firms have a profit sharing plan, which pays into a retirement program. Of them, the median payment into a retirement program is equal to 2% to 3.9% of the employee’s salary.
  • Holidays: The median is 8.5 paid holidays annually.
  • Vacation: The most common practice is to grant two weeks for one to five years of service, two or three weeks after 10 years and three or four weeks after 15 years.
  • Insurance: Employer pays entire premium for long-term disability (if coverage is provided), as well as hospitalization, major medical, prescription drug and life insurance.

Source: Compensation and Benefits in Public Accounting Firms, 17th Edition.

MONEY ISN’T EVERYTHING

Now that you know Gen-Xers don’t come cheap, you need to know that some candidates seek something besides money: They want to improve their quality of life (exhibit 2). A raise of more than 20% wasn’t enough to entice one established Gen-Xer. Married, with children, he had worked for the same Fortune 500 company for 10 years. He was grossly underpaid at $62,000 per year. One firm offered him $75,000 (no signing bonus, no stock options and benefits that would have cost the firm $190 more a month than it currently pays). But it was the 60-hour workweeks that broke the deal—he turned down the job. Despite the higher salary, he didn’t consider the package “a definite step ahead.”

Another prospect was working too hard in a high-pressure office and had no time for her family. With six years of experience, she was making $59,000 per year and working 70-hour weeks. She didn’t have enough time to spend with her young children. Her objective in making a job change was to work less overtime and find a stable environment working for what she considered a “family-friendly” employer.

On interviews she asked her potential employers how the new position would help her improve her quality of life. She made it clear that she wanted the opportunity to work from home on occasion and to leave work in time to pick up her kids from school. In the end, she chose a firm that could offer her only $3,000 more than her previous salary. But this firm altered the job description to suit her preferences, focusing more on special projects and analysis than on operational accounting, and they promised her she would have the time she needed for her family. She accepted the offer based on the opportunity to change her life-style.

Sometimes the deal breaker doesn’t appear to make sense. One CPA was interested in vacation time. She wanted no less than three weeks up front, because that’s what her boyfriend received. She actually turned down an offer that met every other qualification she desired but would only allow her two weeks off a year.

Exhibit 3: CPA Job Levels and Compensation


Title
No. of companies responding No. of employees in position Average minimum salary* Mean average salary* Average maximum salary* Average bonus paid, if any
Staff accountant I 1,183 6,954 $30,442 $33,892 $37,441 $800
Staff accountant II 903 5,292 $35,190 $38,243 $41,714 $921
Staff accountant III 1,218 6,003 $39,880 $43,768 $47,675 $1,050
Accounting supervisor 894 2,536 $44,095 $49,765 $55,679 $1,199
Accounting manager 982 3,018 $51,158 $59,867 $69,869 $1,450
Accounting director 494 2,110 $54,745 $62,283 $81,834 $2,191
Auditor 736 2,100 $39,850 $43,906 $49,978 $1,053
Auditing manager 778 894 $50,624 $58,443 $66,113 $1,407
Auditing director 254 267 $54,985 $77,336 $101,118 $2,728
Controller 843 964 $68,236 $84,342 $102,283 $2,877

*As of April 1, 1999.

Source: Compensation and Benefits in Public Accounting Firms, 17th Edition. For complete salary information visit www.wageweb.com .

MAKING THE DEAL

Gen-X is a complex generation presenting interesting recruitment dilemmas. The key is to identify what factors motivate your particular candidate. Every situation is different, but people tend to move from pain to pleasure. Find out what candidates don’t like about their current job, and be sure to explain how your company can improve their situation.

We encourage employers to study the job applicant’s cover letter and resume and prepare a written document with benefits listed in an order that appeals to the candidate’s motivations. That way you quickly communicate information the prospect needs, and you can deliver added impact by summarizing the total value of the package. One candidate’s wife had a preexisting medical condition that would be covered by a firm’s package. Because medical benefits were a key factor in his decision to switch jobs, the employer placed that benefit first on his list.

Here’s another tip: Don’t offer the farm the first time around. Save room to negotiate. Offers from other companies are only part of the competition you face. With a tight job market, counteroffers from the prospect’s current employer present just as great a threat. Be prepared for round two of negotiations. At the same time, exercise caution. One candidate making $62,000 per year working for a huge private corporation was offered $75,000 a year by a potential new employer at an accounting firm. After the offer was made, he spontaneously called the employer and asked for a $5,000 signing bonus. The firm agreed to pay the bonus on the spot, without trying to find out whether he would have taken the job without the bonus money. (He would have.)

A Gen-Xer Speaks

A year and a half ago, Jennifer Smith, a CPA with three years of experience at one of the Big Five accounting firms, switched career paths. She now works as a professional recruiter. Why the change? “It was a combination of being burned out with the life-style and being drawn to a less structured and more entrepreneurial environment,” said Smith. “I like being a problem solver and a consultant to clients, but I didn’t want the rigid environment of a CPA firm.”

Smith feels that having numerous job options and access to money create a challenging environment for young adults today. “I know a woman with three years of experience working for a software company. She makes $90,000 a year but feels her job doesn’t reflect who she is. She wants to work for a not-for-profit organization but doesn’t want to take a salary cut.”

On the other hand, Smith has a friend who recently graduated and plans to work in retail until she finds a job she loves. “My generation has lofty ideas. We’re accused of being slackers. We don’t have a weakness in our work ethic; our priorities and perspectives are different. I guess many of us feel if we can’t find what we want, we’ll create it. And that’s not a bad thing.”

ON THE JOB

The changes don’t stop once Gen-Xers are hired. To meet their needs you may have to adjust your management style. For example, younger members of the workforce want immediate feedback on their performance and lots of it. Remember, this is the generation brought up on instant gratification.

Baby boomers who have been very loyal to your firm and who are extremely valuable to you may not get along with the new employee right away. In most cases, they have had to work longer and harder to get where they wanted to go. Some even regard Gen-Xers as self-indulgent.

The two generations also have different communication styles. Gen-Xers tend to be informal and direct. They rely heavily on e-mail and think nothing of bypassing their managers and going directly to the boss for input or information. They may not have the analytical abilities and long-term perspective that their senior colleagues possess.

And they won’t be as loyal. As long as the economy remains healthy, the good ones will constantly be enticed by better offers. Generation X is having a major impact on today’s recruitment and hiring processes, and it may last a very long time. However, as the workforce matures another generation—in all its complexity—looms on the horizon.

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