Thursday, July 31st, 2014

Talent Spotting – Is Your CPA Firm Stuck In The Past?

“We need an experienced tax senior/manager.” I hear it over and over as I move about the country consulting with firms and speaking at various association/society events.

When I ask a them if they are hiring, most practitioners, firm administrators and HR managers working at accounting firms tell me “Yes, but we can’t find the people we need.” It seems everyone is looking for a tax or audit senior or manager, someone with 3 to 5 years of experience and deep knowledge of their specialty area.

I hear the same story when it comes to succession. Many current, aging partners say they aren’t able to transition their clients to “up & comers” because the firm doesn’t have anyone who 1) who shows the skills and expertise to be a partner and/or 2) has the desire to become a partner.

IMG_4016Times have changed, Claudio Fernández-Aráoz, author of the HBR article, “The Big Idea: 21st-Century Talent Spotting,” believes we are now in the fourth era of talent spotting. With 30 years of experience in evaluating and tracking executives and studying the factors of their performance, he considers potential the most important predictor of success at all levels.

The first era, lasted for thousands of years – – humans made choices about one another on the basis of physical attributes. If you want to build a pyramid, you picked someone big and strong.

The second era, which occurred during the baby boomers lives, emphasized intelligence, experience and past performance. Verbal, analytical type skills were the basis for assessing talent.

In the 1980s, the third era evolved and still rules. The way to spot talent is driven by the competency model. We even began considering emotional intelligence as an important competency.

The fourth era is dawning. Here’s a paragraph from the article that, to me, speaks to many of our challenges inside CPA firms:

Now we’re at the dawn of a fourth era, in which the focus must shift to potential. In a volatile, uncertain, complex, and ambiguous environment (VUCA is the military-acronym-turned-corporate-buzzword), competency-based appraisals and appointments are increasingly insufficient. What makes someone successful in a particular role today might not tomorrow if the competitive environment shifts, the company’s strategy changes, or he or she must collaborate with or manage a different group of colleagues. So the question is not whether your company’s employees and leaders have the right skills; it’s whether they have the potential to learn new ones.

The work environment for CPAs is changing. The way we communicate has changed. Social media, focus on specialty services, flexible work cultures and more have proved to be challenging for many accountants. It’s all about the last sentence in the paragraph, above: So the question is not whether your company’s employees and leaders have the right skills; it’s whether they have the potential to learn new ones.”

One powerful aspect is the fact that companies are not properly developing their pipelines of future leaders. It’s not just in accounting. In PWC’s 2014 survey of cEOs in 68 countries, 63% of respondents said they were concerned about the future availability of key skills at all levels.

What I find interesting is that many successful, high-earning, CPA partners are looking for talent that attained a high GPA in college, have outstanding technical skills and are personable, outgoing and able to bring in business…. when they admit that they, themselves, could not be described the same way.

Take the time to read this important article. Use it as a discussion tool for your partner group. This topic is retreat-level in importance.

 

  • "Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of our success."
  • Jeff Bezos, Amazon CEO

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