Don’t let top talent walk out the door! 

By Chip Knighton 

Employees leaving jobs is an established fact of life for partners and human resources professionals of all stripes, and the accounting profession is no exception. The average American worker changes jobs 12 times during his or her career, according to the U.S. Bureau of Labor Statistics, and younger employees are even more prone to job-hop in an effort to find the best fit.  

That movement comes at a cost. The Society for Human Resource Management estimates that the average employer must spend the equivalent of six to nine months’ salary to find, hire and train a replacement for a departed employee, and that percentage goes up for higher-level positions. It’s even more acute for CPA firms — Robert Half’s 2018 Salary Guide for Accounting and Finance Professionals notes a “severe shortage of skilled candidates” in public accounting while noting that in corporate finance, 45 percent of CFOs surveyed are somewhat or very concerned about retaining their current staff.  

“The biggest issue that most of our clients face is the talent shortage and how hard it is to find good accounting and finance talent,” said VSCPA member Camden Hall, CPA, division director at Glen Allen recruitment firm Parker + Lynch. “The unemployment rate in Virginia is less than 4 percent, and when you break that down for accounting and finance, less than 2 percent. It’s hard to find good talent. It’s competitive to get good talent.” 

VSCPA member Gary Thomson, CPA, told Virginia Business magazine that most CPA firms have an average turnover of 10 to 20 percent of accountants each year. That’s a significant amount of overhead when you consider the cost of the hiring process for a replacement, onboarding the new hire and lost productivity as he or she gets up to speed. 

VSCPA member Wayne Berson, CPA, CEO at McLean-based BDO USA, calls retention “the engine that operates everything for us.”  

“It all comes back to having the right people,” he said. “I would say that where we are as a firm really dictates the future in terms of the people. Every time you’re replacing your people, it’s costing you a fortune of money. That’s become more and more evident. If you keep someone in place, your firm will be more profitable.” 

Not all employees are created equal, though. Firms will go to greater lengths to retain those who they view as partner material, including raises, better working arrangements and even the proverbial “resigmotion” for highly valued employees who get job offers from elsewhere.  

Keeping those employees is of paramount importance, but those efforts can lead to dissatisfaction with other employees. VSCPA member Beth Berk, CPA, a recruiter based in Bethesda, Md., says communication is a major key to keeping both partner-track staff and employees who might not be that highly valued, but still well worth keeping around. 

“The firms that have more honest dialogue with staff and truly discuss how they move ahead can retain them at the level the professional feels they should be retained at — those companies win,” she said. “But there are some employees who feel like they got a raw deal, and maybe they did and maybe they didn’t, but the message they’re sending is that they don’t care if these people leave.” 

She added: “Some CPAs could do the same job for 15 years and be perfectly fine with it. Others might need change or to be promoted. But you can’t treat everybody the same way because people have different ambitions.” 

Thomson, the Mid-Atlantic regional managing partner at Dixon Hughes Goodman (DHG) in Richmond, noted that employees leave at higher rates during the first few years of employment and at the seven- to nine-year mark, when they often assess whether they want to try to become partner or potentially leave for positions in corporate finance. The first point can be a crucial moment in a CPA’s career, and one key factor is whether or not the employee feels constrained in his or her role. 

To combat those employees leaving, some firms are allowing newer employees to generalize. This practice offers the benefits of keeping some employees around and allowing them to find the proper fit within the firm. Yount, Hyde & Barbour (YHB), a Winchester-based regional firm with offices across Virginia, places new hires into what it calls the “associate pool,” where they work with multiple service areas, partners and offices.  

Some YHB employees even continue to do that several years into their career. Dan Berlin, CPA, an associate in the firm’s Richmond office, does tax work during busy season, retirement plan audits through the summer and nonprofit audits and Form 990 returns the rest of the year and credits that flexibility for his level of engagement with the firm. 

“Once you get into a specific department, if you want to migrate over and do something else, we have a process for that and we’ll support you,” he said. “We have a structure for that. We can move you to a different department, or if you’re someone like me, who wants to do more than one thing, you can do that.” 

DHG, based in Charlotte, N.C., has taken another route in making employees feel wanted — the Recognition Awards for Valued Employees program, in which employees recognize each other, up and down the org chart, for outstanding work. Employees accumulate points based on recognition they receive, which they can redeem for merchandise, gift cards and other prizes. 

“It was about praise, and you had to be specific,” said former DHG employee Amanda Phelps, CPA, now employed with the city of Virginia Beach. “I would praise the partners as an associate, and they would be really happy with it. 

“I found that upward and downward recognition really helped. You could turn in your points for gift cards, but people really responded well to that extra ‘good job.’ People in public accounting don’t always focus on that.” 

Of course, just as employers keep a close eye on the bottom line, financial rewards still carry a great amount of weight. DHG recognizes that with its Bonus Ownership Opportunity for Seniors Talent program, aimed at retaining senior associates and consultants. That program gives employees the option on receiving bonuses based on length of tenure, with the bonus increasing the longer it’s deferred. 

Most of the retention programs above boil down to one thing: Letting employees know they’re valued. At DHG, that means peer-to-peer recognition; at YHB, it’s professional freedom within the organization. BDO, meanwhile, saw its retention rate increase the more it flattened its org chart and gave employees a forum for their opinion and ideas. 

“People want to know that they’re at a firm where you’re able to voice an opinion. People want to know that their opinion really counts for something,” Berson said. “So often, I think what happens is that firms pay lip service to it. That’s really not how we operate. We really, genuinely ask people to give us ideas to contribute.” 

BDO has numerous task forces devoted to meeting the needs of different employees, be it diversity and inclusion, early-career needs or a women’s group. What’s more, the firm pivoted one of its existing partners into the role of chief people officer, inspired by a similar move from Google. Her initial job description was “Making people happy.” 

“She’s on my executive team, a key partner in the firm,” Berson said. “One of our core values is ‘People first.’ I thought that if we were saying it’s a core value of the firm, we need to put our money where our mouth is.” 

BDO actively listens to its employees when it comes to the programs that will keep them around. That’s in the macro, at the company- or branch-wide, programmatic level. But listening on an individual level can be just as important. 

“Companies don’t necessarily pay attention, or their managers may or may not pay enough attention, to single out those who want to be promoted versus those who don’t,” Berk said. “And if they miss the boat on that one person, that’s the person who leaves. It’s possible that the managers are so busy getting the work done that they don’t have enough time to truly focus on the professional development of their staff. Companies claim to care about professional development, but some are better at it than others.” 

That extends to open communication about career paths and employee performance — both positive and negative. And it requires partners and directors to listen to lower-level employees regarding their needs at their spot on the org chart. 

“There has to be an open way to communicate and help somebody really develop and understand where they need improvement,” Berk said. “Maybe it comes up in their annual review, but if they’re not really being honest with somebody or really, truly expressing what they really want to say, they may be sending the wrong message to a person. So there’s a disconnect between the employee’s perceptions and the manager.” 

“Perspective and career challenges are often different from men and women who are already leaders in the firm,” Berson said. “Those who are already leaders are involved in the strategy of the firm, but when you look at early-career opportunities for men and women, it’s important to get their feedback.” 

To sum up, employee retention often boils down to making employees feel wanted, no matter their career ambitions. Digging even deeper, that practice needs to be a real part of organizational culture, and it has to be intentional. Carefully planning organizational growth helps keep everyone at the firm on the same page and working toward the same goals. 

“It has to be coupled with real firm growth as a business, more clients,” Berlin said. “If you don’t have firm growth, you’ll keep employees and they won’t get promoted, and then they’ll leave.”