Accounting firms are looking to bring in younger employees to fill their ranks as older Baby Boomer partners start to retire, but they have to offer the right enticements if their succession planning is going to work.
”With busy season behind them, now is a good time for accounting firms to have the opportunity to focus more on planning in this area,” said Kim Gottschalk, senior regional vice president of the staffing company Accounting Principals. “What we’re suggesting to leaders is to make sure they’re conducting evaluations with their internal staff on a regular basis and monitoring turnover closely, making sure they’re retaining the people that are their future leaders or future successors for whatever role they may be considering into the future. Forward thinking in the succession arena is really critical, considering the numbers that we’re looking at from the Census Bureau.”
A 2014 report by the U.S. Census Bureau pointed out that the Baby Boom generation started to turn 65 in 2011. By 2029, when all Baby Boomers will be 65 and over, more than 20 percent of the total population U.S. is forecast to be over 65 years of age.
Accounting firms are already dealing with a war for talent, seeing stiff competition for young employees with the necessary skills and aptitude. To find that talent, many firms are turning to mergers and acquisitions to staff up and prepare for the future. Gottschalk has some advice for them.
“Leaders have to clearly define what their recruiting and retention strategies are and be clear on how they stand out in terms of a competitive benefit package, both from a quantitative and a qualitative level,” she said. “There are so many companies that are looking at things like their culture, like their work environment, and what they offer candidates when they are physically in the office. Of course, we know that people want things like work/life balance, and we have to look at the studies and what the different generations want and need in terms of benefits. Leadership needs to lock arms at the highest levels and understand what they have to offer to people to either retain them or attract them in the future, and that requires communication and clear planning.”
While salary is an important enticement, the work environment and the potential for future leadership development can be major attractions for recruiting and retaining talent as part of a succession plan, Gottschalk suggested.
“Sometimes as you’re looking to attract candidates, it can be very important to talk with them during the interview process or during their evaluation to say, ‘Here is how we are developing you. Here is how our organization is going to develop you.’ I have those types of conversations with my team all the time. Those types of developmental conversations can go a lot of different ways. It doesn’t always have to be pure leadership. It could be simply that they would be a future trainer or a future mentor, some of those non-tangible things that are so valuable, but we need to say it out loud.”
Getting on the partnership track is important to many CPA firm employees, and Gottschalk advises firms to make such agreements transparent. “Transparency on all levels with regard to whatever subject is very important,” she said. “That’s what you do to gain your employees’ trust, so whether the message is good, bad or indifferent, communication is key between employer and employee.”
She is a firm believer in communication between accounting firm staff and partners who are concerned about succession planning.
“Communication is really important because many of the best candidates want to know what the future of the role is,” she said. “They’re concerned with the job they’re taking now, but they’re concerned with the path it’s going to go down tomorrow. We’re constantly talking to the hiring authorities to find out what the future of a role is, what it will look like in the future, and what the candidate has to offer in that role because what we don’t want to do is just match technical ability to the job needs. We want to match a candidate’s actual career aspirations to what the company is looking forward to and if those things match up. We are constantly talking about succession with these companies.”
CPA firms in particular need to be aware when they are recruiting job candidates that there is a difference between performance and potential. “What we’re talking to them a lot about is it’s important to note what the candidate’s potential is vs. what their performance is,” said Gottschalk. “You definitely need to look at that metric and define, OK, here are the clear accomplishments and here’s what we believe seeing and interacting with this person what they can do for the company going forward.”