[IMGCAP(1)]In my two previous columns, I wrote about CPAs who leave public accounting and go to work in private industry. Based upon the comments and emails I received, this is an involved topic and I would like to delve into it further.
I was writing about my observations, particularly of many people in their mid-50s I have known who cannot get jobs in private industry after spending a major part of their careers there (see Art of Accounting: CPAs Who Go to Work for a Client and Art of Accounting: CPAs Who Leave Public Accounting). Obviously there are many people with extremely successful careers in private industry and I was not addressing them, but I do consider them to be in the minority. Also, we are all individuals, and we each decide on how we want to work and what we are comfortable with. No one, including me, has any right to criticize them or tell them they should have done it differently.
Here are some reasons why I believe people leave public accounting firms. Many of these reasons are caused by the firms’ leadership and can be avoided or mitigated:
• Without a doubt the major reason is work/life balance. People feel they cannot have a reasonable work/life balance in public accounting and look to private industry for a better combination.
• Another major culprit is tax season hours. Many CPA firms have untenable overtime requirements, with some firms requiring staff to work as much as 65 chargeable hours during a tax season that can start in the middle of January and run through April 15. This means no personal life or activities for a quarter of the year.
• Regardless of the overtime, at many firms the payment for that work is either nonexistent or subject to a determination by the owners of what they will pay as a “bonus” as late as June 30th. At least if the payment was made in the next regular paycheck after the overtime, the employees (and their spouses or partners) would see some tangible benefits for the extra hours put in. If people leave because of this and the previous reason, that is the fault of the firm, and shame on them for not recognizing their own narrow-minded management.
• Work done by public accountants is demanding. People employed by CPA firms need to be on top of things, continually learning and growing. Many do not want to put in the effort. For the CPA firm, these are not losses, but benefits, when they leave. The only criticism I might have is that the hiring process was not as good as it needed to be.
• Some leave because they get put to work on very large clients for long periods and either they do not like the client or industry, or they feel they are stuck in a place they do not want to be. They may not get exposed to the range of businesses and industries they believe is necessary for growth. Again that’s the firm’s fault for not managing the career of their staff people.
• Lousy clients. They can be bad for a number of reasons, and this causes people to want to disassociate themselves from the firm and the profession.
• Occasionally you get an outside person and give them an inside job, or vice versa, and the staff person leaves dissatisfied. Again this is part of being a good, alert manager.
Some leave the profession, and some leave the firm they are working for looking for something more reasonable in another public firm. Those staying in public accounting stay because they really want to be in our profession and are smart enough to recognize they had a bad experience. Those who leave chalk it up to a bad experience and look for something better elsewhere.
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 firstname.lastname@example.org.