5 reasons staff are leaving your firm

Public accounting is engaged in a talent war.

The leading voices in our profession consistently cite a pipeline issue — the number of accounting graduates and CPA candidates coming through the system is not high enough to meet demand — exacerbated by the strain brought about by COVID-19. However, this explanation is superficial; it only accounts for the symptoms and not the underlying illness.

There’s been a great deal of talk about the “great resignation,” a supposed outgrowth of our collective pandemic experience. People had time to think about whether their job was the right one for them because they were forced to stop working for some period of time, or they were forced to reevaluate their career because their job became their entire existence. Accountants naturally fall into the latter category. We were lucky enough to be indispensable advisors to clients throughout this unprecedented period in world history. We had more work than we could handle. Sure, we got it done to one extent or another, but at what cost?

Overwork has been a problem in our profession for decades. Accountants generally start their careers with a lot of energy and enthusiasm, which inevitably wanes over the years until they can no longer stand it and seek refuge in the employ of a private company that maintains reasonable working hours and time off. Sure, some make partner or director and stay in public accounting over the long haul. Some start their own practice. The masses, however, are forced out of public accounting lest they risk their mental and physical health or overstrain relationships with loved ones. So if this cycle of overwork and the resulting churn has persisted for decades, why has a talent shortage cropped up all of a sudden only now?

In my view, the answer is in plain sight: People are fed up with being treated like a machine in an assembly line. The pay no longer justifies the toil. And there are more attractive alternatives to public accounting jobs. Stated differently, the age-old accounting business model simply does not work for a growing percentage of those in their early 20s to mid-40s. How do I know this? I’ve spoken with hundreds of CPAs over the past decade about their journey in public accounting. Their grievances are not unique or situational; they are pervasive and consistent. They embody the underlying illness that the symptoms confirm. And they are the reason we built Dark Horse to be a CPA firm for CPAs. Too many firms have started with tunnel vision on the client and tried to cram accountants into a predetermined box that increasingly feels like a prison to them.

So why are your accountants leaving your firm? I guarantee you it is due to some combination of these factors:

Toxic leadership

Your firm has toxic leadership who create a toxic culture. High intelligence is a prerequisite for the profession. Unfortunately, emotional intelligence doesn’t get its proper seat at the table. People don’t want to be manipulated, and they don’t want to work around people who are miserable. I’ve seen this — and much worse — as a primary reason for CPAs to bolt from smaller firms. Related to this is a culture that values being always on and hitting certain billable hours, as if these are some sort of dystopian badge of honor. This is more of an issue at larger firms. Nonetheless, it is toxic and will eventually poison your staff.

Unrealistic workload

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A person works from home inTiskilwa, Illinois.
Your staff has an unrealistic workload that is driven by the almighty dollar. This is a result of a hyperfocus on revenue growth and the bottom line without proper investment in staffing and technology to aid staff. You had to do things this laborious way when you were a staffer, so you think your staff should too. This is the selfish mindset of a person with limited emotional capacity. Don’t perpetuate the sins of the past ... unless you enjoy staff turnover.

Compensation plan is lacking

Their compensation plan doesn’t account for the sacrifice required to get the work done. If staff members have to crank through 500 returns during tax season, and they know all they are going to get is their base salary and potentially a discretionary bonus and the often empty promise of a slower season or time off, you can understand why they might not be terribly motivated to meet the mark.

Confusion about advancement

Nobody knows how the hell to make partner. If your staff members feel the path is arbitrary and political, with a timeline that is anyone’s guess, they’re not going to stay around in the hopes of being anointed by the powers that be.

No self-determination

Your staff doesn’t have the autonomy necessary for self-determination. Some people like being given the program so they don’t have to make the difficult choices for themselves. These people often make crappy firm partners. If the pandemic hadn’t happened, you wouldn’t have let them work from home regularly because, at the end of the day, you don’t trust them. They know that, and some of them probably resent you for it.

I know that’s a tough pill to swallow, but if you really want to know why your firm has more openings than it can fill, it’s likely not because you’re growing at warp speed but rather that you haven’t built a firm that people want to work for. Solving for the above is just the beginning. Your younger employees are looking for purpose and a place that aligns with their values. If you can’t give them those things, someone else will.
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