The terms “Great Resignation” and “Great Reshuffle” have come to define the period of a nearly unprecedented churn in the U.S. labor market since 2021. A recent article in CPA Practice Advisor notes that the accounting industry is seeing 2–3 million people retire early and this trend, coupled with a very competitive job market, has some firms struggling to find and retain staff.
The IFAC Small and Medium Practices Advisory Group recently met with Steven Fields, a Senior Vice President at Robert Half International—a firm specializing in the placement of professional accountants—to discuss some of these trends and what firms can do to attract and retain talent. They also provided their experiences from different parts of the world.
The Hiring Environment
Employees are leaving their jobs in record numbers across the board, not just in the accounting and finance sector. In March 2022 in the U.S. alone, 6.3 million people left their jobs, and there were over 11.5 million open positions (a series high), according to the U.S. Bureau of Labor Statistics.
With some companies returning to the office, many workers want to retain a level of flexibility, while some employers may be reluctant to give it.
Causes of the Great Resignation
The Great Resignation has several underlying causes among accounting firms, including:
- Additional attrition from supervisors leaving to pursue more lucrative positions and remaining staff being overworked and underpaid
- Partners retiring early due to shifting priorities during the pandemic
- The shift to go back to the office as Covid restrictions ease whereby some staff prefer the flexibility of remote work arrangements that were offered during the pandemic
- The increased workload on firms and a shift with many firms doing more advisory services for their clients, resulting in staff burnout
- Some staff making big career changes and moving out of the accountancy field altogether to pursue other opportunities
In some cases, larger firms are able to pay staff more, which results in some losses for small- and medium-sized practices (SMPs).
Retention Strategies and Best Practices
When companies choose to bring employees back to working in the office, this can result in some dramatic changes. People have become used to their routine since start of the pandemic and returning to the old ways of doing things may no longer work. Some employers have seen their employees move out of the area during the pandemic to be with family or to settle in suburbs with less crowding and a better quality of life, and they may not be planning to return to the office environment.
According to research done by Robert Half, three is the number of days a week (out of seven) many employees want to return to the office post pandemic, so firms are needing to make some changes if they want to keep those staff. Some companies are offering fully remote work, while others are offering a certain level of work from home with set days staff are expected to be in the office.
A retention checklist to be considered by firms could include some of the following strategies:
- Embrace changing employee expectations
- Consider remote model advantages
- Reassess the value of the office
- Get ahead of employee burnout
- Acknowledge that flexible work models are here to stay
- Consider compensation and perks
- Upskill and reskill, again and again
- Be ready for the next steps in workplace evolution
- Consider mentoring programs
- Focus on employee wellness
- Offer mental health resources
- Offer family leave
- Provide remote work equipment at no cost to the employee
- Offer childcare assistance
- Consider interim or contract staffing to help reduce staff burnout
- Rethink employee performance reviews
Some firms are getting creative in an attempt to attract and retain good staff. While some of the measures listed above are costly to implement, some can be very low-cost solutions. The long-term benefit is less turnover and better employee job satisfaction.
When it comes to employment trends in finance and accounting, Robert Half found that 65 percent of senior managers and finance professionals are hiring for new, not just replacement, positions, while 33 percent are only hiring for vacated roles.
In order to attract talent, 48 percent of companies are offering hiring bonuses, 46 percent are giving cash incentives, 43 percent are giving more vacation time, and 40 percent are offering title upgrades. Many companies are experiencing pay compression as they are paying new hires more than ever while the more experienced staff are renumerated disproportionately based on their level of experience. There are also still gaps in gender pay that must be addressed whereby women are being paid less than men for doing the same work.
SMP Perspectives from Around the Globe
The SMPAG members provided perspectives and experiences working at firms around the world. Below we have summarized some of these perspectives by key themes.
- Some SMPs believe they need to invest more in talent development and technology to be able to attract top talent.
- Staff are sometimes lost to larger firms due to more opportunities to use technology, especially when it comes to the younger staff.
- Some firms try to stay in contact with those that have left the firm for other opportunities.
- When firms stay on top of this, in some cases, former staff end up coming back to their firm years later.
- Keeping in touch with talented people can be a great talent strategy.
Staff Check Ins
- Some firms have started doing regular (sometimes up to weekly) check ins with their staff rather than waiting for the annual review process to provide feedback and address concerns.
- Doing frequent catch-up meetings provides a way for supervisors to address any issues before an employee contemplates leaving for other opportunities and provides a way for firms to improve their processes.
- Some firms are doing “well-being” Fridays where they do not book meetings and encourage staff to invest in themselves or they offer informal sessions with staff focused on well-being.
Varying Views on Remote Work Arrangements
- Some employees prefer to work in the office rather than at home, especially those who live in small spaces or have children at home without a quiet, dedicated office space.
- Some jurisdictions have very strict labor laws that do not allow for much flexibility, so providing this benefit can be a real challenge.
- Many staff have become accustomed to some level of work from home and may expect that to continue even as restrictions lift, so firms may need to manage expectations.
- Some regions do not have enough skilled workers in the country to fill open positions.
- Accounting professionals in some regions are being poached by other sectors like the mining industry, making it even harder to retain people.
- One member noted their normal turnover rate is around 30-40 percent at the firm, but over the last 9 months, it has reached up to 110 percent for some of their audit teams.
- Some firms have resorted to hiring short term staff and interns and paying them hourly rates to try to bridge the gaps.
- Some firms are offering incentive bonuses for staff who provide referrals.
- Some firms are outsourcing work to contractors, even in other regions, to fill the labor gaps.
- One firm noted seeing more staff take off for mental health reasons than ever before.
- The increased workload and pressures at home are causing more burnout than some firms have seen in the past.
How SMPs can Stand Out in a Tight Labor Market
- SMPs are sometimes better able to provide greater flexibility and growth opportunities than bigger firms, giving them a competitive advantage.
- One SMP is getting creative and offering firm profit sharing with staff below the partner level to try to attract and keep talent.
- Some firms are providing mentoring opportunities for staff showing great potential.
The Talent Pipeline
- There are concerns about the pipeline as there are not enough accountants graduating and entering the accounting field.
- It was noted that the accounting profession is competing with other professions like engineers and actuarial scientists.
- Some members of the SMPAG think these trends may continue for a 5–10 year cycle.
- According to an SMPAG member who is an adjunct professor at a University in the U.S., undergraduate marketing graduates have a bigger ROI (return on college investment dollars) than post graduate accounting students; this also makes the profession less attractive to the younger generation.
Staffing trends have always been a hot topic for the accountancy profession, but the pandemic, increased workload on firms, and attractiveness of other, more technology-focused positions have only made recruiting and retaining staff a bigger challenge for firms. Some SMPs may have a bit of a competitive advantage in that they can offer more flexibility and get creative with other employee incentives and wellness programs.
Below we have included a list of additional resources to help firms navigate these challenges.
- 2022 Salary Guide | Robert Half
- Employment Trends in 2022: Demand for Skilled Talent | Robert Half
- Why Employee Mental Health Is So Critical — and How Managers Can Help| Robert Half
- Staff Performance Evaluation in a Virtual Environment & the Hybrid Office
- Groundbreakers: Gen Z and the Future of Accountancy
- When it Comes to Talent Retention, Think Flexibly
- Firms Face the Great Resignation
- Companies Say They Will Pay More to Recruit and Retain Staff