There's a war going on. Are you winning or losing?
One of the most talked about pain points in the accounting profession today is the talent shortage. If you're in the accounting profession, I don't need to tell you how short-staffed this entire industry is. There's an out-and-out war for talent!
The pain of the talent shortage hits multiple parts of a firm's traditional business model and has a ripple effect that can permeate the organization. Here's the ugly reality:
- Revenue growth suffers. Firms are turning away work because capacity is stretched to the limit.
- Client experience suffers. Relationship partners and engagement staff have no time to effectively communicate and engage with clients.
- Client service excellence and work product quality suffers. With engagement teams on overload, working incredibly long hours, it's not surprising that mistakes will happen.
- Burnout (churn and burn) is on the rise. When there's not enough staff, those left in the organization are burdened with unsustainable workloads. As a result, many valued employees jump ship and leave public accounting.
- Career advancement suffers. Firms today have partners doing the work of the engagement team because there aren't enough staff or managers. Those who are highly motivated to achieve promotions are frustrated because they aren't leveraged well, to allow them to gain the experience needed to demonstrate they are ready for promotion to senior manager, director, or partner.
- Partners suffer. Partners are now expected to back-fill and balance all these challenges while still bringing in new business and servicing the existing clients. This impacts partner productivity and wellbeing.
These are not brand-new problems, but they've been exacerbated insidiously and dramatically post-pandemic with this extreme talent shortage. And it's not getting better any time soon.
The Bureau of Labor Statistics projects that the demand for accountants is forecast to grow 7% from 2020 to 2030. At the same time, it's impossible to hire enough young accountants to take the place of the large and increasing population of baby boomer accountants who are retiring and taking early retirement at an unprecedented rate.
Firm managing partners employ the common tactics used to fight the war for talent, such as compensation increases, more aggressive and innovative recruiting teams, more or unlimited PTO, better benefits packages, and flexibility to work remotely. But it's not enough.
So, what's the secret weapon that can have a lasting impact on a firm's ability to attract and retain top talent? One of the top three factors for choosing to leave or join an accounting firm (along with compensation and lifestyle) is opportunities for career advancement. A firm can demonstrate that it invests in its people and fosters career advancement through industry specialization. This is the magic bullet.
It may sound simple — but it's not!
Most firms already recognize the importance of specialized practices. This can range from individual partners who are industry subject matter experts, small pockets of expertise or informal industry practice groups, through large-scale industry programs with multiple formal industry practice groups. But this is not sufficient. Firms must recognize that industry specialization as a selling point to attract and retain top talent.
Industry specialties have always been a differentiator and competitive edge. But now they're a key secret weapon to attracting and retaining top talent and offering opportunities for career advancement and a clear path to partnership.
1. Start by taking a close look at your current industry program to leverage its strengths and find opportunities to improve.
- Consider your chosen industry specialties. Whether it's one industry or several or more, it's important to scale the number, size, and scope of these industry practices to the size and capacity of your firm. It's better to do fewer industry practices well, rather than attempting too many and only achieving mediocrity with all. As the economy evolves there are emerging new industries where you can be a front runner, taking the lead with a first mover advantage. New industries like cannabis and cryptocurrency are exciting opportunities for the next generation of accountants.
- Assess your current industry practice leaders and consider their ability to attract, empower and coach young accountants who will join their industry practice team. While your industry leader could be a great rainmaker, they may not be a great leader of people. Career-minded young professionals attach themselves to the coattails of the leaders and leadership teams that demonstrate their commitment and ability to enable the success of their team members.
- Enhance your industry program. Use incentives, accountability, awards and recognition, tools to enable industry knowledge and experience, collaboration, and measures of success. These tactics can reinforce productive behaviors that result in career advancement for your professionals.
2. Raise awareness, both inside the firm and in the marketplace, about your investment in a strong industry program that supports career advancement.
- Communication strategy. Both internal and external marketing campaigns should be aimed at raising awareness of your successful industry program. This will enhance your firm's reputation and help attract and retain the professionals that care about advancing their careers.
- Play up your success stories. Highlight your rising stars who are on the journey to becoming industry thought leaders. These high achievers can be your best ambassadors. Testimonials, case studies, and industry eminence building programs all showcase your firm's commitment to empowering professionals to advance their careers.
- Be true to your values and commitments. Put the stake in the ground and reward your professionals who invest their time and talents to become deep in an industry with appropriate promotions and financial payoffs that clearly attribute the reward to their efforts and achievement regarding industry focus.
3. This is a long-term commitment. Change doesn't happen overnight but requires persistence, focus and commitment — both from firm leadership and from your talented professionals.
- Tone at the top. Firm leadership must provide initial and continuous support and endorsement of this commitment to develop industry luminaries at your firm. These leadership messages should be internal and external so the firm's world and the world of your clients and future employees knows that leadership stands behind a long-term investment in its people.
- Leadership throughout the organization needs to be consistent. For the importance of industry specializations to resound inside the firm and with its reputation in the war for talent, all leaders across geographies and service lines need to march to the beat of the same drummer.
Be proud of your investment in industry specialization to help you win the war for talent!
HR teams and recruiters must highlight this highly valued asset of your firm as a recruitment tool: your firm's commitment to investing in career advancement through industry specialization. If your firm's industry program is deeply embedded in the firm's values and mission, recruiters should be proud to tout this attribute consistently and continuously, as a differentiator and valued asset to attract and retain talent.
You can win this war!
