With an estimated 75 percent of CPAs expected to retire over the next 15 years, according to the AICPA, CPA firms are under pressure to recruit and retain a sufficient number of young accountants to keep the business going.
“As we think about recruiting and retaining different generations, we expect the Millennials and the Gen X’ers to be a large part of filling the gap of the retirement of the Boomers,” said Chris Rush, division vice president of strategy at ADP Small Business Services.
While every generation expects to receive competitive salary and benefits, there are some differences in priorities among the different generations, Rush has found.
“As you think about the Baby Boomers, they’re a little more traditional,” he told me. “There’s a heavy focus on competitive wages and benefits, and opportunities for advancement and compensation. It’s a little bit different as you look at the Millennials, where you start to see other intangible benefits become more important—things like work/life balance, flexible schedules, and a more casual business dress code, as well as ongoing training and development. That’s something that’s consistent amongst both the Millennials and the Gen X’ers.”
Generation X is poised somewhere between the surrounding generations’ priorities. “If you think about the Gen X’ers particularly, again there’s got to be a little bit more work/life balance,” said Rush. “I kind of think of the Gen X’ers as fitting between the Millennials and the Boomers. Whereas the Boomers are more traditional, with more of the traditional comp and wages and benefits, and the Millennials preferring a flexible work/life balance, the X’ers are more in between. They also want competitive comp, but they also want some work/life balance, a little bit more hands-off management so they can drive their own schedules, and technology is also very important to them.”
While it’s hard to generalize among such broad sets of individuals, CPAs need to take into account the various incentives for attracting and keeping talent at their firms as part of their succession plan, assuming they even have one.
“We all talk about the number of CPAs that are retiring, yet only 20 percent of them have a succession plan in place,” said Rush. “I think it’s going to be very important over the next 15-year time period to do it. Succession planning is about thinking about your long-term future leaders of your firm.”
Depending on the size of a firm, that could mean the future leaders of the firm as well as middle management. Rush believes CPAs should first think about when their anticipated retirement date will be, and then start making a succession plan, preferably 10 years ahead of that date.
“If you haven’t started, now is the time to actually be thinking about that,” he said. “And as you think about that, you should be thinking about the long-term trajectory of your firm around what kind of talent you want in key positions in terms of technology, in terms of their familiarity with social media, and those kinds of things. You want to be cultivating that talent.”
Firm leaders also need to plan how they’re going to transfer the necessary knowledge to their successors. “You want to make sure you’re thinking about what your retirement date is, have your plan in place 10 years before that, and then you can start thinking about how you’re going to do that knowledge transfer, how you’re going to set in place those kinds of changes that are going to cultivate the kind of talent you want in your firm when you are retired,” said Rush. “Then about three to five years out, you want to actually start executing on that plan.”
Firm leaders should also consider if they want to sell off lines of business to simplify their succession planning, Rush noted. ADP offers educational materials for accountants at www.adp.com/accountant, along with its ADP Hiring system to help small businesses and accountants find and recruit talent.