This edition of Generational Viewpoints features two professionals from Barnes Dennig, a 160-person firm with locations in Ohio, Kentucky and Indiana. We asked baby boomer director Kathy Ahearn, born in 1958, and millennial tax manager Nick Pennekamp, born in 1993, to share their perspectives on the following question:
“There are many aspects of the public accounting business model that are under pressure to change. Which business model change do you feel most firms should prioritize first and why?”
Ahearn’s baby boomer viewpoint
When I started my career, we had the Big Eight of large public accounting firms. We tracked our time by client, invoiced based on hours worked, and were continually looking for qualified staff. As I get nearer to the end of my career, we now have the Final Four of large public accounting firms and we still track time worked by client, invoice our clients based on hours worked, and still deal with continued pressure to find qualified staff that we hope will stay the course to become partner. The world of business has changed, but in many ways, our business model is still rooted in “the way it has always been done.”
At Barnes Dennig, we continue to look for a better way to manage and improve our business model. All of us want to make the firm as financially successful as possible and to provide our staff with a great place to work. One of the ways to make that happen is to change our method we use to invoice clients for the services we provide. Yes, we need to track employee time from a practice management aspect, but this should not be the sole determinant of how we price our services and invoice our clients.
Over the past several years, many of our core compliance services have begun to be thought of as commodities. We have all been on the receiving end of the client call informing us they are switching accounting firms for lower fees. The time is ripe to change our view of what our services are worth and how we bill for them. We should be focusing on the value that we provide for our services, rather than the cost to us to provide those services. By elevating our concept of pricing and billing, we will focus more on providing our clients with a package of services that will meet their needs and provide them with additional solutions to help them succeed. We will also challenge our younger staff to think outside the box, demonstrating that they are a valuable part of the client service process, and not simply a charge-hour number. Only then will our clients truly appreciate our value. This will inspire our staff to provide more value-added services that our clients will both want and be willing to pay for. As a result, staff will feel that they can take the time needed to really understand client issues and help provide them with practical solutions that deepen client relationships.
Change is never easy, always a little scary, and sometimes painful. However, once you commit to change and do the work needed to make it happen, you usually are grateful that the change happened.
Pennekamp’s millennial viewpoint
I posed this question to an online accounting forum, whose contributors span the globe and are largely made up of millennial users. I did this not because I needed inspiration on the topic, but rather to validate my own ideas. I was validated in finding an overwhelming majority of contributors shared my perspective. The biggest change firms across the country should prioritize is addressing the culture, which is causing staffing and mental health issues.
In terms of numbers alone, staffing seems to be going in the wrong direction. We’re seeing a decline in graduates focused on accounting and an increase of staff fleeing to nonpublic accounting jobs or completely different industries. Staff are feeling overworked and underappreciated. Promises of unlimited PTO aren’t enough to compensate for a lack of work-life balance anymore. Every year, more industries outside of public accounting are offering unlimited PTO and more flexibility. Overtime hours are frequently extending past the traditional busy season windows. Often staff need to put in extra work to take a week of much- deserved vacation, and when they do, they return to more work. Unfortunately, this additional stress related to staffing issues falls back on the staff that remain.
From my point of view, we always feel like we’re on the job. As great as technology is, it’s a double-edged sword because it’s impossible to get away from it. Nobody feels that more than us. As a generation who grew up with unlimited access to technology and integration, it’s hard for us to compartmentalize aspects of our lives. We don’t leave work at work and work never leaves us. From my experience, millennials, especially in the public accounting industry, are ultracompetitive. Even though we try to log off at 5 p.m. or take time off, we are constantly checking and responding to emails because we want to impress someone or everyone. To an extent, we do understand this could be of our own doing, but nothing will change until the culture of being 100% accessible changes.
Firms need to rethink their business model when it comes to attracting and retaining talent. We need to set guardrails around accessibility and move away from the feeling of 24/7 access; we need to increase staffing so vacations can be taken fully; we need to take a hard look at the billable hour paradigm which drives time at work instead of efficient work; and we need to find alternative ways of making team members feel appreciated. Adapting a business model to address these things will create a better public accounting industry going forward.
This column is facilitated and edited by Sarah Land, the millennial marketing and program coordinator, and Jennifer Wilson, the baby boomer co-founder and partner, of ConvergenceCoaching LLC (www.convergencecoaching.com), a leadership and management consulting and coaching firm that helps leaders achieve success.
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