May 28, 2022

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Accounting firms face the Great Resignation

Accounting firms have thus far been able to successfully weather most aspects of the COVID-19 pandemic. However, a new challenge awaits on the other side: The Great Resignation. This mass exodus — felt both inside and outside of the accounting sphere — has seen professionals at all stages in their careers unexpectedly quit, moving on to greener pastures (or to totally different fields altogether), leaving firm managers scrambling.

To be sure, turnover at accounting firms has been an ongoing issue over the last decade, which may lead some professionals to think the Great Resignation is either nothing new or a fad that’s being overblown. But according to Microsoft’s 2021 Work Trend Index, released earlier this year, some 41% of the global workforce is likely to consider leaving their current employer within the next year, and 49% plan to make a major career change. As experts in the accounting profession point out, this new exodus of professionals represents something else entirely.

“Accounting firm turnover has been high for a number of years, with upwards of 20% of accounting talent lost per year for most firms, but the Great Resignation feels different and worse,” said Jeff Phillips, co-founder of recruitment platform Accountingfly, as well as CEO of accounting and business consulting provider Padgett Business Services. “What I see most often is someone leaving their firm for a remote job, often with another firm. In fact, we’ve never seen this high of a demand for remote jobs among candidates.”

“Turnover is up, and it seems the larger the firm, the more significant the attrition,” added Jennifer Wilson, co-founder and partner at leadership and consulting firm ConvergenceCoaching. “Right now, it seems like turnover is happening with those that the firm leaders didn’t expect to leave. So, firms are seeing rising stars, future partners and even new partners leave that firm leaders thought were invested and safe.”

“Reasons for leaving range from the traditional ‘going to industry for more work-life balance’ to taking a break due to burnout and jumping to a competitive firm for a big jump in pay or the promise that they can stay working remote,” Wilson added.

It’s a trend affecting firms of every size — from the Big Four to top regional firms.

“In general, our firm has seen an uptick in voluntary turnover since the start of the pandemic,” said Darren Burton, chief people officer at Big Four firm KPMG. “If we consider March 2020 as the start of the pandemic, the firm’s voluntary turnover for the 18 months after that time was up by about 10% when compared to the 18 months prior to it.”

“Like most organizations, we are experiencing a very competitive labor market as people continue to face challenges and disruption caused by the pandemic and may be more open to considering new opportunities,” Burton continued. “As a result, we’re very focused on addressing people’s needs and are looking at every level that’s available to help ensure that we’re supporting employees in this challenging environment.”

“In most years, [we have] experienced a low turnover rate,” said Molly Willinger, human resources manager for Arizona-based firm BeachFleischman, a 2021 Accounting Today Best Firm to Work For.

“However, we have seen an increased turnover during The Great Resignation,” she said. “Although our firm offers a remote-work program allowing employees the flexibility to choose how and where they want to work, we have found that remote working isn’t for everyone. For instance, one of our employees relocated to a different state, but he did not want to work remotely. So, he accepted a position with a firm in his new location to work in the office.”

It’s also important to note that while the Great Resignation is a direct result of the pandemic, it is also the result of many professional issues that existed long before it. The pandemic brought with it a significant period of reflection, and this pause gave professionals a chance to consider what they really want — and if their current position or firm has really delivered for them leading up to and through the pandemic.

“Professionals are using this time in history to explore their career path and try new opportunities they may have considered (or not) in the past,” said Sandra Wiley, president of CPA consultancy Boomer Consulting. “I think it goes beyond just a career path; they are looking for the experience and culture they want — hours, flexibility, learning new things, etc. One firm I spoke with said they are seeing employees leave in record numbers and going to completely new professions and new positions that are not even close to the accounting profession.”

Different times, different sources

To counter the turnover of the Great Resignation, firms need to continue to be as agile as they have been during these unprecedented times, and consider attracting candidates from nontraditional resources. The on-the-fly changes in hiring experienced in 2020 were thought to be a one-off at the time, but it’s become clear that these shifts in attitude and methods are going to be staying with firms for the foreseeable future. Still, industry experts fear that firms may not be moving fast enough.

“I think for individual firms, using the job boards is basically useless at this point,” said Phillips. “It’s definitely time to get creative. If firms choose to open the job to remote candidates, they will get more applicants.”

“Ubiquity is in play in any firm I talk to,” added Wiley. “They are looking all the time, in every avenue possible, to find talent as they trickle in. The traditional college events, recruiters and referrals are still in play, but they have slowed dramatically. The new trend is outsourcing. Finding nontraditional resources is a key in identifying the talent you need. Outsourcing includes in-country and out-of-country resources, and can include part-time, gig or full-time workers depending on the needs of the firm.”

The expansion to hiring remote candidates, again thought to be a more temporary option during the most difficult points of the pandemic, may just reflect a sea change in the profession’s future — with some positive outcomes to boot.

“We have seen an increase with candidates located all over the United States applying for remote positions with our firm,” said BeachFleischman’s Willinger. “We have changed our recruiting strategies to reach the wider labor pool and expand our firm’s digital presence. We also pursue other recruiting methods remotely, such as virtual career fairs. … We have had to remain proactive in leveraging our technology to improve processes and create efficiencies when staffing levels are a concern.”

“From a campus recruiting perspective, [we have] expanded … sources through use of virtual recruiting platforms and techniques, and as a result are seeing an increase in the number of universities represented by entry-level hiring classes,” said Kathy Schaum, executive director of university talent acquisition at Big Four firm KPMG.

“Moving to the virtual recruiting model has [also] had a positive impact on our diversity, equity and inclusion efforts, as it has greatly expanded our ability to reach more underrepresented talent,” she added. “For example, we’ve expanded the number of [historically Black colleges and universities] and Hispanic-serving institutions we actively recruit from. … We have increased the number of HBCUs by more than 40% this year.”

Expanded hiring sources also bring an expanded definition of who qualifies as a successful candidate. As firms cast a wider geographic net in their search for talent, newfound competition will reflect on potential hires — both who they are and where they are.

“Firms are taking a hard look at what qualifications are needed to complete the various tasks in the firm,” Wiley said. “Do you have to be a CPA to succeed in a position? Financial planners, wealth managers, data analysts, paraprofessionals, bookkeepers … are more important in firms now than at any time in our past. Recruiting for these positions is in higher demand.”

“Firms are trading employees more than normal, so firm-to-firm transitions feel like they are up,” said Wilson. “And remote workers are popping up in firms across the country, so the competition for talent in Des Moines, Iowa, isn’t just from Iowa firms any longer.”

Half the battle

Whatever source proves fruitful in supplying the right talent for a firm, it ultimately reflects only half the battle in this post-COVID hiring landscape. As the Great Resignation has shown that professionals can and will leave for better pay, work-life balance, or other benefits, firm leaders need to reimagine and bolster their retention efforts like never before.

“I have always believed accounting is an incredible career path and should be followed,” said Phillips. “If firms practice modern flexible work arrangements, embrace remote work, and provide great places to work while paying a competitive market salary, people will stay. The problem is, these things are not happening more often than not, which leads to turnover.”

“The important thing for firms to dive into is what is the employee experience that you are going to offer all your team members,” said Wiley. “How employees feel from the moment of recruitment until they are onboarded and integrated into the team is what will ultimately attract, retain and motivate them. Firms must put more emphasis on that part of the firm.”

The Great Resignation can also be utilized as a time to proactively address longstanding issues within an individual firm or the profession as a whole.

“Since the start of the pandemic, we’ve employed a continuous listening approach to stay connected with people and better understand the challenges they’re facing,” said KPMG’s Burton. “We know from feedback that challenges around work-life integration and difficulties establishing boundaries and disconnecting from work are leading to increased stress and risk of burnout, so we’ve been putting a lot of effort into addressing these important areas.”

“With the soaring job market, we look for creative opportunities to attract new staff,” said Willinger. “Our firm prioritizes employee well-being, work-life balance, and flexible working arrangements to attract and retain new staff members. Additionally, we have gotten creative with how and where we recruit to fill vacant roles. We recently started exploring options such as outsourcing and hiring temporary workers.”

“I was facilitating an association roundtable session, and a CPA firm partner said something like this: ‘We can spend all the time and money we want on recognition and retention rewards for our people, but they aren’t going to stay long-term until we solve the capacity problem and quit working them so hard. They need to see we’ll make the business model changes to right-size the work to the staff or the staff to the work — that is the only thing that will give them hope that they can stay,’” recalled Wilson. “I couldn’t agree more.”

(See our experts’ tips on recruiting and retention.)

A time for change

The last year-plus has been a challenge for firm leaders and the profession as a whole. Professional adjustments have led to a new normal, and in the spirit of this, firm leaders need to continue to stay adaptable and proactive in their future search for and retention of talent. The future success of their firms, and perhaps even the profession, is at risk.

“Change is hard,” emphasized Wiley. “Firms must lead through the change. Stop waiting for things to get back to normal and start leading the firm to a whole new business model that will sustain and protect the firm.”

“As a professional services firm, we’ve always known that people are our most important asset, and this has only become more evident in the current environment,” said Burton. “As we look to take advantage of the many opportunities in front of us to keep growing the firm and strengthening client relationships, it’s critical that we have a workforce that’s fully engaged, energized and motivated to do their best work.”

“Worn out, traditionalist firm leaders who are very busy complaining about all that is wrong with the profession, the business model, legislation and more,” said Wilson, “I regularly ask them: If you aren’t inspired and lit up about your firm and its future, how can you expect your people to be?” AT