Most firms get decent marks for providing a reasonably clear and attractive career model for their people -- folks know what the rungs on the ladder look like and what they need to do to climb it. They also offer an appealing, if often undifferentiated, value proposition to their employees that embodies what professionals receive in return for staying and contributing. Firms that get both these things right will have a reasonably good outcome in attracting, training and retaining the professionals they need to succeed.
Leading firms, however, do it differently. They link the career model and their employee value proposition to the natural progression of a professional's capabilities and aspirations. This creates a powerful link between individuals' desires and ambitions and what the organization wants from them.
A professional's growth follows a predictable path: gaining specific and increasingly advanced skills at each stage, struggling at identifiable points, and breaking through to higher levels of capability along common time frames. Some individuals certainly move faster, seem more naturally gifted, or unaccountably struggle at unexpected times, but the critical junctures and breakthroughs will be near universal for the vast majority.
In the first three years or so, most young professionals are looking for three things from a firm: training, credentials and support in passing the CPA Examination. During this time, the firm, in turn, wants them to attain CPA status, bill lots of hours and deliver high-quality work.
Aligning the interests of the firm with these new accountants means the firm needs to:
- Deliver high-quality continuing professional education;
- Encourage and reward CPA licensure; and,
- Provide reasonable compensation. This isn't a time to pay above-market rates, but it is a time to invest in building young professionals' capabilities and credentials.
At the next stage (usually years five through eight), the needs and expectations of both parties undergo an important shift. The firm wants its maturing professionals to provide effective oversight of the people reporting to them, generating leverage to ensure the profitable delivery of quality work. It is reasonable to expect those professionals to deliver on-the-job training to those below them. While they shouldn't necessarily be expected to serve as career mentors, professionals should help develop the technical skills of younger professionals.
Professionals at this point in their careers shift their priorities, as well. Because many are starting families or getting established in their communities, they yearn for flexibility and some reasonable level of work/life balance even as they settle in for the long haul in their careers. They want to develop skills beyond the technical and feel a sense of achievement about their accomplishments and commitment. Most important, they want to understand their contributions in a larger context. Consider this analogy: When you're testing the performance of the electrical system deep within the chassis of an airplane, it's easy to get lost in the details and lose sight of the fact that your work may save lives. Likewise, when you're deep in the details of the audit process, the same myopia may occur. To keep people excited about their work and career prospects, they must see more directly how their work contributes to the capital markets, to the client and to the firm's strategy. That isn't always obvious.
Leading firms meet these expectations by being adaptive and flexible. They publicly acknowledge and encourage quality work. They offer differentiated rewards, particularly for high performers who demonstrate outstanding managerial skills. Leading firms also emphasize management and supervisory skills. The Public Company Accounting Oversight Board in QC Section 20 makes it clear they feel the same way. It's a time for the firm to develop the professional's management and supervisory skills, emphasizing the "why" and the "what" of the role, beyond just checking the work of their direct reports.
Unless firm leadership instills that understanding, it's common for professionals to get pulled down into lower-level work. In engineering terms, they'll spend too much time stuck back inside the airplane, and not enough time reading wiring schematics and understanding the interconnections so they can guide the rest of the crew. The firm will suffer because these variances in the leverage model can have a profound negative impact. Having a somewhat-less-experienced person perform a task with equivalent quality is generally preferable, because the margin the firm achieves on that individual's time is higher. In addition, the senior person is then freed up to do higher-level work, and to progress in their career path.
A STEEPER CLIMB
In years nine through 15, as these professionals start to pivot toward the path to partnership, the expectations at leading firms shift again. Internally, these experienced professionals are expected to act as leaders and mentors with those who report to them; inspiring, rather than just managing. In client-facing matters, the expectation is that they will be adept handlers of client relationships and providers of expert opinion.
Those are serious responsibilities, and in return the firm must provide its people with the means to understand their role more holistically. In engineering terms, management can't expect someone to move suddenly from reading the airplane's schematics to a deep understanding of stall speeds, fluid dynamics and turbulence diffusion. Most professionals at this stage want to be a partner, but that's precisely the time when the career climb becomes steeper. This is when the firm needs to nurture less tangible characteristics such as creativity, curiosity, business acumen and problem-solving skills.
In addition, professionals at this level particularly value transparency and reciprocal commitment. They want to know where they stand within the hierarchy and the probability of being invited to join the partnership. They expect to start seeing greater economic rewards for the years they have invested in the firm. Leading firms respond to these expectations by providing clear and constructive career conversations. They generally pay above-market talent rates. And they find ways to demonstrate their commitment to the individual, whether the professional ultimately remains inside or moves outside the firm.
This alignment of the firm's needs to the individual's desires creates talent flow across the entire arc of a professional's career. Doing this has significant benefits. Improving the ability to help individuals achieve their best and highest use simultaneously maximizes both the quality and the impact of a firm's talent. This alone would make talent flow a worthy goal, but the secondary effects, intangible though they may be, are what separate a great firm from its competitors. Specifically:
- Firms with better talent flow are more attractive to young accountants, since those individuals are more likely to achieve their ambitions. The firm projects this into the pool of talent in a hundred intangible ways that go far beyond campus recruiting rhetoric, making the promises real and bringing them to life.
- Young professionals are more motivated because they understand clearly what they need to do to progress in their careers. Attention that is otherwise wrapped up in anxiety about advancement is refocused.
- Continual forward movement creates healthy peer pressure with less overt competitiveness, since the effort of "staying with the pack" is greater. Likewise, the growing sense of being among an elite group provides substantial psychological benefit to everyone in it.
- At the same time, separations become easier, since the halo effect created by a strong development culture and a sense of an elite team extends to those leaving. Few hiring managers, when seeing a premier accounting firm's name on a resume, immediately think, "I wonder if they were counseled out?" Rather they think, "Wow, they must be smart and well-trained."
- Finally, the selection process along the way improves both the availability and quality of future partners. The growth they embody increases the chances that actually making them a partner will be accretive, since they join the partnership with more momentum and orientation toward continual progress. This, in turn, fuels firm growth and expands the capacity of the system to provide an ever-greater number of opportunities for individual growth.
Managing, developing and rewarding talent may be enough to bring a firm to a competitive level within its market space, but creating a truly differential advantage is much harder. True competitive advantage requires guiding professionals through the distinct stages of their career and helping them discover their best and highest use along the way. Linking the deepest ambitions of the firm's people clearly and directly to what the firm needs from them separates the leading firms from the also-rans.
Dave Kuhlman, a partner at Axiom Consulting Partners, is the author of Leading Firms: How Great Professional Service Firms Succeed & How Your Firm Can Too.
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