[IMGCAP(1)]The issue of Millennial recruitment has become very big. Publications are devoting column inches to this topic and consulting businesses have sprung up to teach you how to create a culture that will appeal to this demographic.
Experts agree that Millennials are transient, crave flexibility, value culture over money, and want to make a difference in the world. In other words, they sound like the 20-somethings of past generations. In reality they don’t sound much different than I am now at the advanced age of 41.
The issue of Millennial retention is especially acute in the accounting profession. According to a report recently published in Accounting Today, 9 percent of partners in CPA firms are under the age of 40, and more than 60 percent are over the age of 50. These demographics have led to a rise in consolidation of firms and beg the question: Who will succeed the 60 percent when it’s time for them to retire?
Before you install a Kombucha bar, organize foosball tournaments or have senior partners fire Nerf guns at your young staff, consider some of the things our profession is doing that might be restricting younger people from advancing and subsequently leading them to leave for other jobs.
THE 150-HOUR REQUIREMENT
In 2000, many states mandated that anyone sitting for the Uniform CPA Examination would need 150 college credits to do so. This led to young people spending at least one additional year in school and adding to an already substantial student loan. This means they may have some bills they’ll need to pay and may be more willing to leave even for a slight increase in compensation. Are the new CPAs coming out any better than those of us who had 120 credits? If not, what’s the point of this requirement?
GET OUT OF THE WAY
To me, it’s staggering that only 9 percent of all partners are under the age of 40. When I started my career in 1996, several partners whom I worked with were in their early 30s. Since then, it seems the accounting profession has created the role of “manager for life.” Firms say you have to generate business in order to become a partner. However, how can someone do this if they are too busy handling the day-to-day work from an existing partner?
Want a reason the 27-year-olds are leaving the profession? It’s because they see the 37-year-old CPA still grinding in the role of a manager. They understand that if they are going to make a move, it’s much easier to do so when they are younger and much harder to do as they grow older. The 37-year-old might stick it out because they are making a good amount of money to stay and have been told that they are close to becoming a partner.
There’s no good reason that people should work at a firm for 15 years before they can become a partner. Opportunities to grow must be given much sooner, or people will leave.
We do not believe non-competes are a good idea, especially for anyone below the level of partner. The trouble with these agreements is that they allow us as firms to keep people in the manager-for-life role. Where else are they going to go except for private accounting? It’s hard to move to another CPA firm without the threat of being sued. We do not make our employees sign non-competes in part because we think it keeps us on our toes as employers. Are we giving the younger staff the opportunity to advance? Are we compensating them fairly? Given that we allow them to leave without any possible repercussion, we had better be doing that stuff right.
Two of our three CPA partners are Millennials, and it is likely our next partner will be one as well. They were given opportunity, and they were able to seize it and advance to partner level. Quite frankly, they may have had to wait another 10 years before getting the same shot at their previous firms. If they had to wait that long, there’s a good chance they would have left public accounting.
Give your young staff real opportunity, and they will stick around. To quote the Talking Heads: “Same as it ever was.”
Michael A. Bark, CPA, CVA, MST, is a principal of Edge Advisors LLC in Milwaukee. Reach him at (414) 759-9629 or firstname.lastname@example.org.
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