To Mitigate Risk in Recruiting for Your Firm, Take These 3 Steps Now
IMGCAP(1)]According to a recent study from the global consulting firm Protiviti and the Economic Crime and Justice Studies Department at Utica College, companies are ill-prepared to prevent corporate fraud or conduct investigations, thereby creating a significant potential liability.
The survey found that nearly half of the respondents fail to conduct a formal fraud risk assessment on at least an annual basis and a troubling 27 percent have never implemented a formal fraud risk assessment. Only a scant 6 percent of all respondents reported a high level of confidence in their organization's vendor fraud and corruption risk oversight.
The results of this study are certainly both alarming and enlightening, but readers may be scratching their heads and asking, “How does it all relate to recruiting within accounting firms?” The answer is pretty straightforward: in today’s world, risk assessments must include people assessments because good talent is becoming increasingly difficult to recruit. Billable consultants are the major, if not only, conduit for fees within professional services firms. Whether you are short-staffed, have the wrong staff or have the right staff in the wrong positions (or similar scenarios), talent-related problems will quickly short-circuit your bottom line.
Given that the state of talent will directly result in missed opportunities, what actions can firms take now to mitigate talent risks? Here are three recommendations:
1. Allocate Adequate Budget to HR
Each day that a key position remains unfilled is another day without revenue coming in the door. Sometimes, HR functions within firms are so focused on "saving money" in their recruiting budgets they fail to realize that frugality can have the opposite effect in terms of opportunity loss. Here’s what I’ve learned from having worked inside many professional services firms: partners are generally much more interested in filling an open position with the right person than scrimping on salary to save a few dollars.
2. Monitor the State of Your Workforce
Make sure that someone in your firm has accountability for your overall workforce as well as the skills to assess your talent risks. That individual also ideally “owns” workforce and succession planning, monitors key metrics including your retention rate, rate of retirements, and compliance, as well as potential pipelines of new talent, by drilling down into the data for each service line. Additional responsibilities include monitoring your rewards structure to be sure it is competitive.
The individual in charge of workforce risk assessment at your firm can certainly be your HR leader. I’ve seen this work well in many firms when the HR leader has the skills and strategic vision to understand how to go about assessing workforce risk. Other firms designate a risk leader, who "owns" all risk within your company, including potential workforce risk. If this latter role hasn’t been designated within your firm, work with an external executive recruiter to get this pivotal role filled. Hiring people into a critical role that doesn't yet exist can be challenging since you probably do not have this skill set internally. So rely on a professional.
3. Hire the Right Recruiters
Finally, firms need to ensure that its recruiters are, in fact, capable of assessing the qualifications of the individuals they recruit. It is absolutely critical that those who lead the recruitment function have the right people in place—with the right training—to do their jobs. At any firm, the recruiters need to understand the technical requirements for all the jobs they recruit for. If you are hiring software development specialists, for example, your recruiters need to understand what specialized skills, knowledge and experience that role requires within the context of your company. Too often, rookie recruiters tasked with sourcing critical roles actually have little idea of what those jobs entail.
Experience really does count! Resumes cannot and should not be the sole validation of one’s professional experience. Otherwise anyone can do it! I’m proud to state that my primary qualification to recruit stems from working in the industry for nearly thirty years.
Addressing risk issues within recruitment is becoming increasingly critical. At professional services firms, employees are our lifeblood. The quest to hire great talent is becoming more competitive. Adding to the potential risk is new data that shows the voluntary quit rate is the highest in nine years..
If there ever was a time to evaluate and act on recruitment risk, the time is now.
J. James O’Malley, a partner at TalentRise, has developed talent acquisition solutions for more than 25 years to ensure that leadership talent aligns with changing business needs. He joined TalentRISE in 2012 to focus on clients’ executive leadership challenges by leveraging his passions for executive search, on-demand recruiting, workforce planning and analytics and executive coaching.