Art of Accounting: Myopic millennial management
A big topic among firms is how to manage millennials. Somehow we believe they are different. However, looking back through the years I do not believe the problem is how to manage the millennials; rather it is the myopic firm managers who need better management techniques.
Firms talk about how great they are to work for and how they provide tender care and treatment of their employees—yet many chew them up and spit them out. Much of what is being done is systemic, and as a profession we are losing bright, eager talented people because of myopic managers who just do not get it. Here is a template of what many do and why it needs to change:
At many firms, hours required to be worked when commuting time is included preclude any reasonable family time. An example is a budget of 50 hours a week not during “busy season,” plus two hours a day commuting and an hour for lunch, making a 13-hour workday. This is expected, dictated and mandated, and such firms wonder about their large turnover.
Some firms require the 50 hours to be chargeable, lengthening the day even more, or encouraging lying on timesheets.
Certain specialties are easier to fill the time than others. For example, audit people park themselves at a client for an entire day at a time. Tax people lose time in switching from one client’s work to another, plus dealing with interruptions for “quick” questions. While an audit person can easily clock 10 hours in an 11-hour day, most tax people have trouble coming up with eight or nine hours in the same 11-hour day. Yet, tax people are held to the same annual standards as audit people.
Question: If tax people are given a lower annual hour base, does that make them less important or less valuable than auditors? It would seem so. Much of tax work is compliance work, but planning and related research are essential for maintaining and perhaps strengthening the client relationship. Some firms set tax department hourly rates higher than comparable experienced people in the audit side so the annual revenue is roughly equivalent for both groups. An example is an annual auditor time budget of 1,800 hours at a $200 hourly rate providing $360,000 gross time charges, while a similar experienced level tax person budgeted at 1,600 hours would have a $225 hourly rate. Alternatively, if the audit billing has a realization of 80 percent, the $360,000 gross will yield $288,000, while the tax person at the same billable rate but with a 90 percent realization will yield the same $288,000, with “realization” being a measure of effectiveness, efficiency and client satisfaction, as well as profitability.
Many large firms with separate tax and audit staffs no longer call it “tax season,” but use “busy season.” Family members and the public understand tax season, while busy season causes a hiccup until digested.
The compressed work during tax season requires more hours per day and an extra weekend day to get the work done. This creates untenable conditions, causing many to leave public accounting. Management just doesn’t get it. An example of how things have changed from when I started is that I had to work three extra hours two nights a week and five hours on Saturday. This was manageable and did not create prison-like confinement. Today’s mandatory hours do not leave any reasonable time for personal activities.
Proposition: Anyone working in public accounting who likes to ski will have to choose between the profession or their favored choice of recreation. Figure out what they will choose.
Firms that set annual chargeable hour targets also ask staff to spend time volunteering, joining professional society committees, or performing outreach activities at schools, colleges and career fairs. When they do, it gets done on their own time since the chargeable hour budget is not adjusted. Those who do the extra activities “on their own time” get further penalized when the firm’s myopic management grades the performance with a metric that includes the ratio of chargeable time to total time. For example, those who volunteer have a larger denominator, making this ratio unfavorable when compared to those who do not engage in the extra activities.
While I am looking at annual chargeable hour targets, firms that close early for holidays, give extra days off for wellbeing courses or charitable participation, or have staff take extra CPE (which is good for the firm and staff person) have all of this done on the staff’s “personal” time since the annual hours are not adjusted.
Staff want personal space. We had it, and they should have it and need it. Yet, much of what is done thwarts this, and when the staff realize this, they leave. Sayonara, baby!
There is a lot more, but I believe the above presents some arguments for a more expansive and reasonable staff management policy. There are many articles on dealing with millennials “because they are different.” I suggest that perhaps it is not them who are different, but the management. Perhaps the millennials are no different than the staff from earlier years, but it is the managers who have changed by becoming more controlling, self-centered, less understanding and more myopic.
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, and “Managing Your Tax Season, Third Edition.” 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.