The accounting profession may have been built on numbers and spreadsheets, but today it's also a people business. Client relationships, employee morale and firm culture are as important to your success as the software that runs your programs.
Think about it: There is a stark contrast between the people side of the business and the way most firms charge for their services. Nobody became an accountant to track their time in 10-minute increments or spend time filling out timesheets. Yet, at a time when employee motivation and client retention are of the upmost importance, firms employ an outdated pricing model almost designed to frustrate employees and clients alike. It makes no sense at all!
Here are six ways you can build a better firm culture while attracting and retaining top-level employees. It comes down to changing a single fundamental of your business — your pricing model.
1. Free employees from the tyranny of the clock. Your staff aren't factory workers, so why treat them as if they were? These highly trained, smart professional people are tasked with solving complex client problems and providing expert guidance, not obsessing over timesheets while fighting to meet arbitrary billing goals. If you switch their focus from the number of hours they bill per week to the knowledge and expertise they bring to the game, their work will become more meaningful to them. Clients will feel the change.
Imagine how much more satisfying it is to know you're making a difference in a client's business instead of racing against a clock that never stops.
2. Empower employees to focus on results. No one outside of your office really cares how long it took to finish a project. They care about the quality of the work and how it benefits them. Your employees should have the same mindset. They should understand the scope of a project and what the client really needs. They should know how the project they are working on fits into the grand scheme of a client's financial puzzle. Then they should apply everything they've learned to arrive at a suitable solution that will make clients happy.
You can add up time all you want, but the final score is what really counts. Value pricing understands this and shifts employee incentives from the amount of time they work to the quality and value of the work they do. In so doing, it aligns employee incentives with what's good for the client.
3. Improve work-life balance. Burnout is a real problem and the billable hour is one of its biggest drivers. Most accountants have sat down at some point in their professional lives and wondered how to balance their family life with a profession that measures success by the amount of time they spend in their office. The pressure to constantly log more hours can lead to long days, late nights, and a lot of unnecessary stress.
Value pricing is one of the keys to creating a healthier, more balanced work environment — one where employees feel more fulfilled while still generating profits for the company. An odd thing happens when results become the focus: Employees can manage their time more effectively and find ways to work more efficiently. There's less overtime, fewer late nights, more family time and a far healthier balance between work and personal life.
Happy employees are productive employees. The benefits of switching to a value pricing model will ripple through the firm, improving retention rates while encouraging higher-quality work.
4. Create a more positive office culture. Slaves to the billable hour spend a lot of time watching the clock and worrying about wasting time on anything beyond the spread sheet in front of them. It's a recipe for drudgery. An office culture where collaboration, innovation and engagement fade.
Think about what happens when the focus shifts to client results. Focusing on results encourages everything the billable hour discourages: Collaboration. Innovation. Attention to detail. Predictably, employees will work together to deliver better outcomes for clients, knowing their contributions are valued.
Value pricing also makes it easier to recognize and reward employees for things that really matter — problem-solving, client satisfaction and innovation. This creates a culture where quality is prioritized over quantity. And that's the kind of culture where people want to stick around.
5. Attract and retain top talent. Every generation has its unique perspectives, and you can't expect millennial employees to respond to the same incentives as Gen Zers. However, there are some commonalities between all generations. No matter their age, most people want to be recognized for their accomplishments and their unique capabilities, rather than their sameness. A strong firm culture acknowledges these facts and looks for ways to uniquely help employees build more fulfilling careers while improving the overall quality of service your firm provides.
A firm that values unique employee expertise and provides better growth opportunities is bound to both attract and retain top talent. Better talent leads to better quality service which, in turn, leads to greater client satisfaction. It's a positive circle that starts with value pricing and ends up helping you build a culture of continuous improvement. A win-win situation for employees looking for more professional fulfillment and clients looking for increasingly better results.
6. Encourage professional growth. It stands to reason that if the incentive is to deliver expert services and solve client problems, employees will spend more time on professional development because it holds the keys to their success. Again, value pricing aligns employee performance with client needs.
Beyond sharpening their expertise, this results-based focus will also encourage employees to think about their day-to-day activities in a different way. The focus will shift from grinding out hours to delivering superior results. Stronger client relationships will follow.
A happier, healthier workplace starts with pricing
Value pricing is not a cure-all for every problem facing today's accounting firms. The work will still be challenging, even more so in many instances. There will still be some long hours required to deliver timely. And there will still be those overly demanding clients who try to get more than the agreed-up scope. But there is probably no bigger step a firm can take toward meeting the challenges facing modern accounting firms than implementing a value pricing model.
At the end of the day, pricing is about people as much as it's about profits. Moving away from the billable hour and embracing value pricing aligns firm success with client success. In so doing, it creates a more positive, fulfilling work environment. A culture of collaboration and growth will flourish while employees will enjoy improved work/life balance.
In the end, value pricing isn't just a better way to do business. It's a better way to work.
