Art of Accounting: The Gap in Sam's Growth

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We hired Sam out of school and he worked for us two and a half years and then we split up our firm. This was ages ago and Sy and I left our third partner to form our new firm on Jan. 1, 1974. However, there is a valuable lesson here and I think it is worth sharing. It changed the way we hired staff.

Sam was really very good and a nice guy and clients liked him. When our firm split up, Sy and I did not know if we would make a living and certainly could not take any staff. The partner we left also did not need as much staff and Sam was let go.

About seven years later I met Sam at a bus stop in Manhattan, chatted a short while and found out he was looking for a job. I asked him what he wanted in salary and hired him then and there. We were growing rapidly and could not hire enough of the right type of staff, and Sam fit the bill. He was at a manager level and I “knew” he was good. Well, it turns out he wasn’t so good. He was still very pleasant but not as experienced as we thought he should be. He had almost 10 years of experience but his performance was at about a four-year level. We could not understand it but eventually figured it out.

Partner Insights

While Sam chronologically worked nine and a half years, the training he got was inconsistent and had gaps. Also he worked for five firms, with the longest being the two and half years with my prior firm. Here is what happened.

During his first two and half years he was trained in everything he needed to know and do for us. He listened, followed instructions, did good work and met his time commitments. He was great. When he left us, he interviewed very well and got a job at a higher level and higher salary than his level of experience warranted. The firm that hired him, as with any firm that adds staff, was shorthanded and needed him right away to clean up past due work and reduce the work in progress inventory. They put him right to work performing cleanup work that was at a higher level than he was capable of performing.

The jobs got done, but with the partners doing more fixing up than expected. Disappointment set in and while this went on for a few months Sam was already going to some clients, which made it awkward to let him go. He was a “body” that took pressure off the partners while adding to their workload fixing up what he did. There was absolutely no training, and Sam was left to learn on his own while he was constantly pressured to move the work forward and out. Poor raises resulted and Sam left for more money, each time getting a job with his new boss’s expectations of him being at a higher level.

We hired Sam at a manager level, but his cumulative experience was at the level, on our development scale, of someone with about four to four and a half years. Not near his salary level. He did not perform well, and we and he were disappointed.

The lesson learned was that hiring someone with “experience” doesn’t work for me. Sam wasn’t our only disappointment, but we detected a pattern with other people we hired. They had the appropriate years of working, but their experience was grossly inappropriate for their salary level due to bouncing around, sometimes not by their choice. My partners and I came to the conclusion that we needed to pass on these people and concentrate on hiring out of school and doing our own training. The simple result was that we were richer by doing this than by hiring so-called “experienced” people.

This is the result of my and my partners’ many years of experience hiring and running a practice. Think about your experiences. I know that many small firms shy away from hiring out of school because they do not want to deal with the training process. I was like that, but “learned” a better way.

For more on the subject of training, you can download a free copy of my 30:30 Training Method e-book with expanded illustrations by clicking here.

Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, published by www.CPATrendlines.com and “Managing Your Tax Season, Third Edition,” published by the AICPA. Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 964-9329 or emendlowitz@withum.com.

Comments (2)
Fun article! Sometimes I feel like a Sam. I've been in two accounting firms in the past 10 years and neither one really put much time into growing me. I had to learn all on my own. Good for you that you take the time to teach your staff. I have been saying for years that I wish I had a mentor.
Posted by integrityaccounting | Tuesday, October 18 2016 at 5:54PM ET
Great article, Ed. Number of years of "experience" means little. Some people learn or are trained for a year or two and never progress.

Best to take newbies in and train them the way you want.
Posted by Vincent DiMarco | Tuesday, October 18 2016 at 11:38AM ET
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