by L. Gary Boomer
Here’s some bad news about attracting staff - an issue that many practices have been feeling good about lately. According to the Bureau of Labor Statistics and many employment experts, we can expect to soon experience the same shortages in skilled labor that were prevalent in 1998 and 1999.
If you don’t believe me, inventory the number of CPAs in your firm in order to determine how many are 50 or older. Then, ask those CPAs if they have a son or daughter who is interested in accounting as a career, and whether they will be entering the work force in the next five years.
What happened in 1999 may be a minor irritation compared to what many are forecasting for the future. During this decade, retirement begins for the Baby Boom generation, which constitutes about 60 percent of the prime workforce today.
We are now in a temporary buyer’s market. It may last one or two more years. These facts, coupled with the great amount of change within the accounting profession, may cause many experienced CPAs to look toward retirement sooner rather than later.
Do you have any of those people in your firm? If the answer is “No,” you may be lucky. There are at least two scenarios that firms should prepare for:
● Many CPAs reaching retirement age may not be able to retire financially due to their reduced 401(k) balances. Some firms with unfunded retirement plans may not be able to pay the amount of retirement benefits some partners are anticipating. This may force them to want to remain employed with the firm or work on a part-time basis. (Are their accounting and IT skills up to date?)
● Older CPAs retire early, requiring the firm to backfill with less experienced personnel. (Where are these younger people going to come from, and who is going to train them?)
The investment required under either scenario is significant, and training/learning is a critical component.
Under either scenario, firms should plan on increased salary expense, increased investments in technology, additional training and fringe benefits. This sounds relatively easy, but try to execute these strategies in a firm where many of the owners are thinking about their own retirement benefits rather than the future of the firm.
According to the BLS, the fastest growing occupations are:
1. Software engineer, applications;
2. Support specialist;
3. Systems software engineer;
4. Network and systems administrator;
5. Network systems and data communications analyst;
6. Desktop publisher;
7. Database administrator;
8. Personal and home care aide;
9. Systems analyst; and,
10. Medical assistant.
The fact that accounting is not on this list should concern you and, perhaps, even alarm you to the point that you need to revisit your strategic plan by looking at what your clients’ needs will be over the next five years.
In doing so, focus on what your clients perceive that they need, not on what you perceive that your clients need. The trend of technology has been to eliminate less sophisticated jobs, while creating higher-level positions elsewhere. This certainly has happened in the accounting profession.
Many of the fastest growing occupations today were on the list under broader headings 10 years ago. Technology jobs definitely were listed in the early 1990s. The result is an unprecedented mismatch between the workforce and the demands of a growing high-tech workforce. It is predicted that the technology area will first feel the crunch around 2005, with spot shortages.
There has been much written about the impact on U.S. jobs by outsourcing to India and other countries. Most of the concern is hysteria, as India and other newly industrialized countries don’t have the capacity to prevent the U.S. labor squeeze. This is especially true in technology and accounting.
The concern should be over whether we can outsource enough of the lower-level work in order to keep up with the demand for higher-level and less-commoditized services.
Any economic forecast has critics, and the statistics from the BLS are not exempt from critics with opposing views. Many believe that the trend toward early retirement is reversing due to economics, and expect that the predicted shortage will be pushed several more years into the future.
A question you should ask if you are in firm management is: “Is our aging workforce competent and capable of handling client demands today and in the future (the next five years)?” If the answer is a definite “Yes,” you are in great shape.
If the answer is “No” or even “Maybe,” you should consider the obstacles you have to overcome and resulting strategies. Remember that all progress starts with the truth, so be honest with yourself and your firm.
Some of the more prevalent obstacles we hear about are the aging partner group, fewer young partners to buy out older partners, a lack of required skills, an older client base who are selling their businesses, little or no growth, and the inability to attract and retain quality young people who are willing to work as hard as the older partners remember doing in the early years.
From my experience, firms have similar problems. The differentiator is how they address the issues. Many partnerships tend to ignore them. Those firms with good leadership, retirement programs, state-of-the art technology, and training programs are acquiring other firms and new business. They are also able to attract and retain the best people.
CPAs have been trained as critical thinkers and can easily come up with the obstacles. The challenge is to come up with creative strategies to overcome the obstacles.
There are many strategies that firms can employ to attract and retain good staff. Unfortunately, training and learning programs, which can be particularly beneficial, are also difficult for many smaller firms to justify.
However, this doesn’t diminish the requirements. We have seen many of the smaller firms start to enter into agreements and alliances with larger firms in order to gain the support and training at a reasonable rate.
As a leader in your firm, you must provide vision, as well as develop strategies to overcome the obstacles on the horizon.
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