Accounting firms often make a fundamental mistake when it comes to bringing on new staff, according to consultant Jennifer Katrulya: They hire when they’re swamped.
“Staffing can be one of the most painful and challenging aspects of any firm or business,” Katrulya said in a session on building a strong team at Scaling New Heights, a conference for QuickBooks ProAdvisors and Intuit Solution Providers held in Orlando, Fla., June 23-26. “The biggest mistake we see firms make is growing based on the amount of work you have, as opposed to creating a proper hierarchical structure built around positions and organization ladders.”
Katrulya, a CPA, CITP, CGMA, and founder and CEO of BMRG, a provider of client accounting services, as well as a consultant to large and growing CPA firms seeking to leverage CAS, warned attendees, “Don’t make it easy to become an employee of your firm. The habit is that people tend to hire when they’re super-stressed -- and that’s not when the best people come in the door.”
She noted from personal experience that busy firms may not set the most appropriate criteria when they’re desperate for help: “We would ask, ‘Are you available? Do you know QuickBooks? Are you breathing?”
Rather than hire on an ad hoc basis, firms create a process for hiring that starts with an organizational plan and structure. Katrulya suggested starting with a thought exercise: “If your firm grew by several times over in the coming months, what kind of organizational structure would you need to handle that? Create an org chart structure to accommodate that. Pretend you have no one in your company, and start with what the right structure would be.”
Once you define that org chart with all the necessary potential positions, as well as a clear hierarchy so that all current and future employees would know who does what and who reports to whom, then assign actual market salary rates to all of them. “Everyone in our firm knows those, and we have preset qualifications for those positions,” she said. “Everyone knows what’s involved in each position, and what they need to do to get to the next level.”
Katrulya said that her virtual firm sets higher-than-average salaries, so she can hire employees anywhere in the country, but noted that firms could also experiment with variations for employees in different geographic areas.
Once you have a set salary range for a position, Katrulya said, “You have some sense of what they’re worth, so you can then value anything extra they do -- bringing on new clients, for instance, or reselling something.”
Having an org chart established in advance with clear expectations and salaries for each position and clear advancement paths allows a firm to avoid hiring in a hurry. "Bringing in work has never been our problem," Katrulya said. "Bringing on the right staff -- and not doing it in a fire-drill fashion -- has been." Instead of rushing the hiring process when firms are busy, Katrulya suggested partnering or allying with other firms for specific non-core services, so you can share work with them when you’re swamped.
Since those who eventually become employees of her firm already know the hierarchical structure of the firm and the advancement paths available, Katrulya has them set their own annual personal and work goals. This puts the responsibility for meeting their goals on their shoulders: “The accountability has been transferred to them.”