Employee retention is top-of-mind for CPA firms. In fact, according to the 2015 PCPS CPA Firm Top Issues survey, retaining staff is the No. 1 concern of firms that employ 11 or more people. In fiscal year 2015, turnover rates reached 13.4% at firms with revenues of over $10 million, the AICPA and CPA.com's 2016 National Management of an Accounting Practice survey found, up slightly from 2014.
The strong economy is a key reason firms struggle with retention, said Shelly Guzzetta, CPA, manager—Firm Services at the AICPA. "Since the economy has gotten better, people have gotten bolder," she said. "They feel more comfortable and are willing to take the calculated risk of leaving." Social media is also a factor, she said, as it's made it easier for CPAs to find new job opportunities and to get candid opinions on what it's like to work at different firms.
Given the heavy costs of turnover, it's no wonder that employers of CPAs are so concerned about retention. When employees leave, their employers must incur the cost of recruiting, hiring, onboarding, and training a new employee, and they'll likely see a drop in productivity as the new hire gets up to speed. Estimates of the cost of turnover vary widely, but one reliable source, the Society for Human Resource Management, calculates that it can cost anywhere from 50% to 60% of an employee's salary to replace him or her.
The challenge firms face is that well-informed employees in high demand—such as CPAs—know that they have choices about where they work. And they're looking for more than just a paycheck and good benefits from an employer. According to retention expert Chason Hecht, employees want to work at jobs they find personally fulfilling and where they connect to the culture. To appeal to the best employees, he said, employers need to rethink the way they approach retention.
DEFINE CULTURE, PROMOTE CONNECTION
Conventional wisdom says that Millennials won't stay loyal to one employer for long. Hecht, president and founder of human resource consulting firm Retensa, sees things differently.
"There's very little evidence that Millennials lack loyalty," he said. "What they lack is a tolerance for boredom. They lack a tolerance for discontentment, disengagement, for feeling disconnected from their peers, community, and society."
What's more, he said, it's no longer just Millennials who feel this way. He believes that we're all undergoing a fundamental shift in the way we view work—and it's making employees from all generations more likely to leave work they find unsatisfying.
"If you're not getting fulfilled, if you're not challenged and engaged, if you're not doing things that are meaningful and interesting," Hecht said, "then it's at this point that you'll, like most people in modern society, reflect and consider, 'How long am I going to do this?' "
Consequently, employees who are in demand and enjoy a high degree of mobility—such as CPAs—are more likely to leave jobs where they don't feel engaged and fulfilled.
Yet, too few organizations think about retention in terms of culture and engagement, Hecht said. Instead, he said, what often happens is that organizations look for one-size-fits-all solutions to their retention problems. A company will learn about the latest trend in retention—be it unlimited vacation or nap pods in the break room—and implement it without considering whether it's what staff really wants. Though employees do value such perks, Hecht said, they'll be a stopgap solution at best if an organization's staff and its culture are ill-matched.
A DIFFERENT KIND OF RETENTION STRATEGY
Hecht advised that, instead, organizations should define their values and culture, then attract and retain staff whose passions align with their own.
Your first step, Hecht said, should be to determine what aspects of your culture set you apart as an organization—"what you provide, where you excel in supporting, engaging, and delivering to your workforce," he said. For one firm, that might mean a culture that promotes transparency; for another, it might be a sense of being innovative and cutting-edge. (To read more about how a firm's culture can inspire retention, see the sidebar "Brown Smith Wallace: Investing in the Whole Employee.")
To pin down how employees view your culture, and when and how they want to work, Hecht said, continually solicit feedback from them through a variety of means: surveys, performance management data, open-ended suggestions, town halls, and the like. The important thing is to do so continually—an annual survey is not enough, he said. (For a different approach to information gathering, see the sidebar "The Stay Interview.")
"Employees are always changing, and you can't assume tomorrow's will want what today's do," he said. "If you build that nimbleness around how you attract, develop, recruit, promote, and retain, you're constantly in tune to what your current workforce wants, and then you don't have to guess."
The next step, Hecht said, is to use the data you continually gather to plan ways to give employees what they value at different points during their tenure. "At each stage of the employee life cycle your workforce is either being engaged and appreciated, developing trust in you—or they're not," he observed.
Once you understand what it is about your culture that employees value, Hecht said, you can then create opportunities for people to engage with one another that allow for connectedness and self-expression. You can create events, social opportunities, and policies that you know will appeal to them, because they're not being implemented from the top down, he said. That way, you won't spend a lot of money to send your staff to a pro football game when they don't really care for sports, for example.
RETENTION STARTS WITH HIRING
Hecht stressed the fact that organizations that want to retain employees need to start by hiring the right ones.
Hire for cultural fit, he said. "Authenticity starts with who you hire and who's recruited, who's interviewed, and the filter you create for people who join your organization," he noted, adding that, naturally, firms in need of help will need to balance cultural fit against their other hiring needs.
Retention is about providing the best client service, but, ultimately, it's also about finding a balance between maximizing productivity and shaping an organization where your employees want to work. As Hecht pointed out, we spend about a third of our lives at work—so whether we're happy there matters.
"We win when organizations have the people that want to work there," he mused. "Can you imagine a country where everybody loves their job and how different that would be?"
Brown Smith Wallace: Investing in the whole employee
Managing partner Tony Caleca, CPA, CGMA, describes St. Louis-area firm Brown Smith Wallace as "a big family-owned business." That may be one reason the firm boasts a retention rate of 92% to 93% in its tax and audit areas. Its culture revolves around trusting employees and ensuring that they are valued.
Brown Smith Wallace, a top 100 firm that employs 292 people, strives to help its employees live rich, well-rounded lives both inside and outside the office. Staff can create their own schedules, whether that means a traditional workweek, three 12-hour days, or some other arrangement—and can even specify that they work no more than 40 hours a week during busy season.
"If they're talented and do a great job of delivering services to our clients, we'll make a schedule that works for them," Caleca said. He takes advantage of the open scheduling himself: For the past 10 years, he's left the office early on Tuesdays and Thursdays to coach competitive soccer.
The flexible scheduling works because employees know that taking time off or working nonstandard arrangements won't hurt their chances at advancement. One CPA worked four-day weeks while her children were young. "She worked an 80% schedule for a while, and she still ascended to partner," Caleca noted.
Individuals at manager level and above can even take unlimited vacation time. The firm trusts they'll put in the work, said human resources manager Lauren Sanders. "At that level, employees know what they need to get done."
Brown Smith Wallace further demonstrates trust in its staff by soliciting their feedback on important initiatives. For instance, all staff, from interns on up, were asked to help shape the firm's vision for the year 2020 by participating in a series of 60-to-90-minute SWOT analysis sessions led by Caleca.
The firm invests in its employees' development through a robust continuing education program called Brown Smith Wallace University. In addition to external training related to their area of specialty, staff can choose from 83 in-house courses in soft skills such as business etiquette or technical areas such as data analysis and advanced Excel. Employees, as a group, earn around 6,700 credit hours per year through the program, Caleca said.
The stay interview
Getting the right information from your staff is crucial to a successful retention plan—and one powerful way to do so is with a technique known as the "stay interview."
According to Dick Finnegan, CEO and founder of Florida-based consulting firm C-Suite Analytics and author of the book The Stay Interview: A Manager's Guide to Keeping the Best and Brightest, a stay interview is a structured conversation between employees and their first-line supervisors that focuses on engagement and retention. Supervisors, who have been trained in the interviewing technique, meet one-on-one with employees to ask them five questions about their job satisfaction and likelihood of leaving:
- What do you look forward to each day when you get ready to work?
- What are you learning here, and what do you want to learn?
- Why do you stay here?
- When's the last time you thought about leaving, and what prompted it?
- What can I do as your manager to make work here better for you?
Supervisors listen attentively and without judgment and then use that feedback to create individual retention plans for each employee.
That third question—"Why do you stay here?"—gets back to the question of fulfillment. Often, the first thing employees will answer is that they need the money. Finnegan encourages supervisors to then probe deeper.
"That's the magic moment," he said. "You discover why they stay. Once you know why they stay, you can build more of that into their job."
The stay interview technique can be a bit challenging to implement, Finnegan said. Employees need to trust their bosses enough to be honest with them, and bosses need to be willing to hear some hard truths about themselves and their workplaces and to make changes. But his approach is effective. One major hospital and nursing home company Finnegan worked with, for example, cut nurse turnover by 70% in one year.
One reason Finnegan's approach to retention works is that it centers on the primary reason employees leave or stay at their jobs: their relationship with their supervisors. Another advantage, he said, is that it's not a top-down solution. Instead, it's local, granular, and personal.
About the author
Courtney L. Vien is an AICPA associate editor. To comment on this article or to suggest an idea for another article, contact her at Courtney.Vien@aicpa-cima.com or 919-402-4125.
- "Flexibility as a Retention Tool," JofA, Feb. 2017
- "Measuring Employee Trust," CGMA Magazine, Dec. 1, 2016
- "4 Tips to Persuade Talented People to Stay," CGMA Magazine, Oct. 24, 2016
- "Nurturing the Human Element," JofA, July 2016
- The Engaged Employee: 10 Initiatives for Successful Firms (#PPM1402P, paperback; #PPM1402E, ebook)
- Organisational Culture (#165605, online access; #GT-EOM-PRM3, group training)
For more information or to make a purchase, go to aicpastore.com or call the Institute at 888-777-7077.
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