This is the goal of almost every firm in the country. So understand you have much more competition for younger talent than you have for new clients. Nearly every firm, regardless of size, struggles with this question. And, often when a firm is fortunate enough to land that star talent, they eventually lose them. This scenario does not have to happen in your firm.
If you want to pursue that star talent, you will need a strong, progressive culture to generate interest in your firm. The following points are very important to the acquisition and retention of younger, competent talent:
- You can’t attract talent with empty offers. Promises that “someday all this will be yours” does not get the job done and is often considered an empty basket. If you find someone that is talented, you must be prepared to provide them specific (and written) guidelines as to how they achieve the following levels: manager, income partner, non-equity partner and finally, full partner. Within your firm, you may not have all these levels or titles but the point is you must provide more than an empty offer. Some may require equity day one, especially if they bring with them a strong client base.
- Quality of life issues are important. Times are different and so is the attitude of today’s workforce. Many firms say they are “quality of life” conscious but really are not. When a firm focuses on measuring ability or leadership by hours billed instead of productivity, new business generated – or other key components of practice leadership, it’s sending a mixed message. Be consistent, be fair and be clear or you will lose the talent you have. Many firms are having additional success in attracting talent by having flexible hours, opportunities to work remotely and other flexible approaches.
- Reward the Rainmaker. In today’s environment the bulk of new client acquisition comes mainly from two sources (1) a client taken from another firm and (2) additional and new services offered for current clients. The fact that these two sources are predominant in the acquisition of new clients makes the rainmaker even more valuable. Good rainmakers are worth their weight in gold. Do not be stingy in rewarding the rainmaker.
- You need staff to do the work. Not every staff member is of leadership quality. But you also need competent and dedicated technicians to do the work. Firms that discount the staff member because he/she does not bring in business are missing this point. If a staff member is talented and has a solid career ahead of them, do your best to acquire or retain this talent as well. Partner-level talent does deserve special recognition but it is important to recognize and reward all those that contribute to the success of the firm. Also many firms need partners in areas where their ability to generate new clients is less important (such as the quality control partner) yet their roles are no less important to the success of the firm than that of the rainmaker.
Many firms face the dilemma of how to reward staff who have been productive, loyal and dedicated, yet may not be the rainmaker. If you do not have competent and motivated technicians, client attrition will always be a concern. We are not necessarily suggesting you reward your solid technicians with the same opportunity as a rainmaker. That needs to be determined on an individual basis. A successful and highly profitable firm needs to acquire and retain talent at all levels. Financial reward is often a component of a reward plan but so should be other offers such as participation in the firm at an “income partner” or “non-equity partner” level.
- There is a difference between ownership and leadership. This is a problem with many CPA firms as the owner(s) have not authored and/or executed a strategic mentoring or training program to elevate the competency level of their staff to be future leaders. Many of the most successful firms in developing partners from within have training and mentoring programs to accomplish this goal; they invest in people. Many firms do not have a progressive recruiting program. Many firms do not possess a template defining levels of achievement for younger staff or for those possessing management aspirations. Consequently, the younger talent is left guessing or does not genuinely understand what is expected to achieve certain levels within a firm. Staff left guessing will most often guess that there is not an opportunity at your firm and will take steps to find one elsewhere.
- Recruiting should be an ongoing activity. Even the smallest firm needs to be actively recruiting. You may not have the financial or other resources to compete with the top firms in your area, but recruiting can take many forms and does not necessarily translate into making major financial offers to potential hires. There are alternatives such as recruiting for internships or offering to speak to accounting classes or groups at your local college or university. Your future and your value will depend, in large part, on your ability to attract both new clients and talented and loyal staff.
- Baby-Boomer crisis looms large. This is not a secret. Our profession, like America itself, is aging rapidly. Without taking the steps suggested above, your practice – regardless of the number of partners you have – will become what is commonly referred to as a “wasting asset”. That is not a good thing. You and your partners have worked too hard, too long and made too many sacrifices to watch your value slip away. The acquisition of talented professional staff is one of the key considerations of firms considering a merger. (For more on mergers see the merger information in this section.)
For more information:
- How to Manage Internal Succession by Joel Sinkin and Terrence Putney, Journal of Accountancy, c2014
- Planning and Paying for Partner Retirement by Joel Sinkin and Terrence Putney, Journal of Accountancy, c2012