Developing your staff for the future

by Timothy I. Michel, CPA

OSCPA’s Practice Management features a new “Turbulent Times Survival Series” by Tim Michel, a former managing partner of Rea & Associates and a current consultant to CPA firms. This series provides hands-on best practices and guidance for public accounting firms facing the current economic crisis.

As the heavy workload of tax season eases, CPA firms wonder just how deeply the current economic downturn is going to affect them. Many of the services provided in the next few months center around business consulting, planning, and transactional activities, such as acquisitions, sales of businesses and expansions. 

Companies, much like consumers, are evaluating their spending and cash flow options and will likely defer discretionary spending into the future when they feel more comfortable with the economy. Therefore, it is likely that many CPA firms will pare back their staffing and reduce or eliminate hiring. But where will this leave them in the future when the economy improves?

The long-term view

CPA firms may want to keep a long-term view when determining their staffing needs. Firms invest a lot of time, energy and money in their recruiting efforts. Once hired, significant investment is incurred in developing and training staff. Firms are willing to make these investments because they know a talented staff is imperative in growing a profitable practice. Therefore, it is worth sacrificing current profits to retain good people who will help the firm grow well into the future.

An opportunity to upgrade

This economic downturn offers firms the opportunity to upgrade their overall staff.  It’s likely that many good, seasoned candidates will become available as companies pare back on their workforce. Firms should actively seek to fill “holes” in their staffing caused by turnover or lack of hiring in the past. In addition, firms may be able to strengthen their expertise in certain service areas or industry segments.

Managing risk

Times have been good for the CPA profession in recent years. Firms have had plenty of work. However, this led to a difficult and competitive labor market. Consequently, firms have retained staff that they may not have otherwise kept and justified it by saying that they were being kept busy, even though they were not advancing as they should.  Of course, staff that are underperforming will be first to go when firms reduce staffing levels.

Firms need to handle workforce reductions with care and sensitivity. It may be advisable to involve legal council to ensure the proper process and procedures are followed, in accordance with all applicable laws. Appropriate documentation should be maintained and firms need to be aware of laws protecting certain employees under age discrimination and employment acts. There are several outplacement services that will help the displaced employee work through the transition to another employer. Many companies offer this as part of a severance package.

Alternatives to layoffs

To keep a solid, well-performing workforce intact, firms do have some alternatives to layoffs. These include hiring freezes, foregoing pay raises, and reducing all pay rates by a certain percentage across the board. Employees are in tune with what is happening with the economy and will generally agree to trade a slight reduction in pay for job security.

Looking to the future

Successful firms spend considerable time in developing a culture that attracts and retains good employees. They know that this is a service business which requires them to have the best and the brightest people. They also know that good employees have choices of where to work and therefore have taken the time to understand that today’s workforce values:

• Challenging work that allows them to grow
• Being involved in decision making
• Responsibility and making a difference
• Job titles and an understanding of what it takes to advance
• Work-life balance
• Flexibility
• An understanding of what it takes to be a partner
• Involvement in firm and client issues
• Keeping busy
• Performance feedback
• Training, coaching and mentoring
• Knowing what is going on in the firm
• Recognition and reward
• Having fun

Successful firms have responded by providing:

• Orientation programs that help the new hire acclimate quickly
• Buddy systems to provide new employee support
• Timely and comprehensive performance feedback
• Mentoring for career guidance and success
• Training – technical, soft skills and leadership
• Coaching
• A culture that is employee-friendly
• Constant communication of firm vision

What can be done today

• Keeping the team informed. Especially in these uncertain times, it is imperative that firm leadership communicate honestly and often with the team. People are on edge and will appreciate knowing what the state of the firm is and how “we” are going to get through this together.
  
  
• Advancement opportunities. Leadership should also communicate what it takes to advance in the firm. Strangely, it is often one of the best kept secrets. Firms should also develop various career paths so employees see they have alternatives. Of special interest is what it takes to become a partner and what life is like being a partner. 
  
  
•  Get the partners involved. Firms should tell their up-and-comers the expectations as well as the rewards of becoming a partner. There are too many staff misconceptions to let this go to chance. An open discussion between firm leaders and partner candidates can go a long way in promoting life-long commitments to the firm. 
  
  
• Challenge your staff. Keeping staff motivated and engaged requires a conscious effort by the partner group. Constantly giving your staff new and challenging work stretches their minds and keeps their interest. Taking into consideration workloads and deadlines, every member of the team, especially partners, should delegate work to the level where it can be handled competently, but is also challenging.
  
  
• Step up the training program. Make use of these slower months to train your team. One area that firms should not cut back on is training.  Good firms realize that to have tomorrow’s leaders in place for growth and succession; they need to provide leadership development and training in the soft skills. Firms are helping staff improve skills in speaking, listening, writing, delegating, supervising, dealing with difficult people, developing business and managing projects among others.
  
  
• Be flexible. Each generation has its own unique peculiarities which can cause issues within an organization. Although the generations may be different, they all want the firm to succeed. Firm leaders would be wise to attend seminars and read books on generational trends so they better understand their workforce. Work-life balance ranks highly with today’s staff. 
  
  
• “Have fun, enjoy the journey.” This is one of the value statements at my prior firm. CPAs put in some grueling days. They spend more waking hours at work with their colleagues than they do with their families. Successful firms have found a way to bring fun and laughter into the workplace.

Yes, the economy is down and firms are looking for ways to survive. But it will improve and firms that treat their people right in hard times stand to have a better chance of seeing their staff return the loyalty in good times. Partners may need to sacrifice some current income to keep a quality staff, but it will pay off in multiples in the future. Firms that have a knowledgeable and talented staff will continue to grow and prosper in any economic environment.

Copyright ©2009 by Michel Consulting Group, LLC

About the author: Timothy I. Michel, CPA is a consultant to CPA firms and a former managing partner of a Top 100 CPA firm. He helps CPA firm owners create value in their practice by drawing on his own experiences to assist them in identifying and overcoming obstacles and focusing on opportunities to increase growth and profitability. For more information, visit the Web site at www.michelconsultinggroup.com or contact Tim directly at tim@michelconsultinggroup.com.

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