One of the most vexing challenges for CPA firms large and small is how to effectively welcome women into the ranks of partnership. Graduation statistics and workforce demographics confirm that future new hires will most likely be composed of a majority of females. Not only does this impact the number of candidates for partnership, but it also has important implications for the gender of the firm¾

Most firms pay lip service to welcoming females as managers and partners, yet structural impediments often exist that undermine this objective when it comes to partnership.

One of our clients was dismayed when a valued female partner abruptly left for another firm. We conducted an exit interview and learned that the new firm was closer to the partner's home. With school-age children, a reduced commute was most attractive. Yet no one believed that this factor alone would cause a long-term employee and partner to leave - particularly without even attempting to negotiate alternate employment terms.

The exit interview revealed that as an incoming partner at the new firm, she was able to negotiate favorable compensation terms that better fit the commitment she was willing (and able) to make to the firm at that point in her career. This factor started to paint a more understandable picture of how an otherwise happy partner decided to leave.

Our subsequent retention analysis showed the need for 17 key policy changes if there was to be a genuine commitment to a more flexible and inclusive workplace, including updating antiquated rules, such as prohibiting the removal of any client file from the office, and blanket limitations on remote access to the firm's network. The partners almost immediately made these suggested changes.

Our experience, however, has identified subtle messages to prospective female partners that run much deeper than employment policies. When a promising female partner candidate was asked if she planned to spend the rest of her career at the firm, she responded: "Not if I ever intend to have a family."

This hinted that the issue ran much deeper than office location or employee handbook policies. Our consulting work has identified that the real culprit is often the compensation system. If billable or chargeable hours are king, and no accommodation is made for periods when females (or any employee) cannot raise a family (or care for aging parents) while billing the same number of hours, then the problem will not be resolved.

The fact is that many attributes make an excellent firm partner. If the goal is to build a firm that is sustainable in the long term, billing hours may not always be as important as controlling work, acquiring work, client relations, mentoring junior staff, developing new processes and other valuable activities. Most accounting firm senior-level compensation systems remain heavily (if not exclusively) weighted on chargeable hours, and the underlying culture really supports nothing else.

TONE AT THE TOP

Many years of consulting have taught us that if you want to understand (and address) firm issues, start at the top. If the prevailing thinking is that new partners "should make the same sacrifices I did," the firm is likely to get just what it is asking for - more of the same type of partners. If the goal is to attract and retain female partners, start by looking at the compensation system. Is base partner pay enough to live on? Do incentives or bonus criteria recognize qualitative factors such as supporting the culture, mentoring junior staff, key strategic participation, senior-level client relations, results-driven measures, and senior-level firm management contributions?

Many firms maintain a top-down culture without realizing the message it sends to their team. Firm forecasts are drafted privately by the partners and handed down "from above." Everyone knows that the forecast is built on body count and chargeable hours. Very little, if any, time is spent on culture or inclusion as drivers for long-term retention. Of course, key staff retention is a key factor in why clients stay with a professional services firm.

Progressive firms search for ways to get closer to their clients' businesses, and the lesson here is to understand that it all begins at home - inside the firm. A firm is no better than the people who work in it. The challenge is that the factors that attract, motivate and retain top talent change over time.

If your partners look around the partner table and get concerned about the future of the firm, perhaps it is time to ask the hard questions about whether your policies and compensation are truly reflective of the culture you want.

Paul Finkle is chief executive of SharedHR (www.sharedhr.com), a human resources consulting and technology firm. He can be reached at pfinkle@sharedhr.com"

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