Rita Keller, an award-winning and widely respected voice to CPA firm management, is uniquely positioned to help CPAs and their teams face rapid and significant change.
“Strength and growth come only through continuous effort and struggle.” — Napoleon Hill
The following is a press release from the AICPA.
Impact of Unfilled Jobs: Staff Restructurings, Delayed Projects and Deferred Expansions
AICPA & CIMA Survey Polled U.S. Executives on Recruitment and Retention Struggles
NEW YORK (March 30, 2022) – Almost one in four U.S. business executives said the ongoing impact of unfilled jobs had forced them to restructure staff to protect core operations or limited the pursuit of new projects or bids, according to an AICPA & CIMA survey.
A dearth of skilled job candidates had been a top concern for businesses for years before the pandemic and quickly reemerged as the recovery progressed. Business leaders list “availability of skilled personnel” as a challenge second only to inflation in the latest AICPA Economic Outlook Survey, which polls CEOs, CFOs and other senior-level CPAs and management accountants in the finance function. Top-line results of the quarterly survey were released earlier this month.
Some 82% of business executives said their organizations were having at least some difficulty with recruitment and retention, with 17% characterizing it as extreme difficulty. The latter is actually an improvement from the fourth quarter last year, when it stood at 25%.
Some 31% of survey takers said mid-level staff openings have been the most difficult to fill, while 28% said the problem is across the board. One in four identified entry level positions as the most challenging category to recruit.
While 40% of business executives said unfilled jobs have not had a significant impact on operations, a majority said the problem had manifested itself in several ways within their organizations. The most common outcomes (survey takers could choose more than one):
Restructured staff to protect core operations (24%)
Limited new projects or bids (23%)
Delayed service expansions (16%)
Slowed customer/client acquisition (9%)
Reduced hours of operations or work shifts (7%)
Closed some work locations (3%)
“We know from our survey that 57% of business executives report they have too few employees,” said Ash Noah, CPA, CGMA, vice president and managing director of CGMA learning, education and development for the Association of International Certified Professional Accountants, representing the AICPA and CIMA. “Pandemic-related trends such as the Great Resignation have complicated an already difficult hiring situation, and that can exacerbate burnout and disaffection among remaining staff if the situation isn’t managed carefully.”
To combat the tight labor market, companies have adopted a number of recruitment and retention strategies, principally higher wages and more flexible work arrangements, although the former has been driven in part by inflationary pressures. Signing bonuses are also increasing as a tactic to attract new talent.
Methodology
The first-quarter AICPA Business and Industry Economic Outlook Survey was conducted from Feb. 2-23, 2022, and included 461 qualified responses from CPAs who hold leadership positions, such as chief financial officer or controller, in their companies. The overall margin of error is less than 3 percentage points. A copy of the report can be found on aicpa.org.
Don’t feel entitled to anything you didn’t sweat and struggle for.
“There is no security on this earth; there is only opportunity.” – Douglas MacArthur
In January, I listened to a webinar presented by Roman Kepczyk about the findings of a recent technology survey conducted on behalf of The CPA Firm Management Association. It is the fourth comprehensive Information Technology survey tailored specifically to member firms with the goal of identifying the applications, products, and processes utilized by peers.
The survey was conducted in December 2021 to determine what information technology firms would be utilizing in 2022 and compared to the results from previous surveys where appropriate. This survey further highlighted the unique nature of CPAFMA member firms which tend to be medium and larger-sized firms.
If you are a member, you can get the complete results via the CPAFMA website. It’s worth becoming a member just to get benefits like this survey.
Here are just a few bullet points I jotted down during the web presentation. When it comes to CPA firm technology knowledge, I always listen to and trust Roman.
162 firms participated. 43% were multi-office firms.
Only 19% host their own.
63% us RightNetworks or another integrator.
Firms are providing dual, over-sized monitors rather than three or four smaller ones.
Most pay a stepend to staff for mobile phone costs ranging from $30 to $50 per month.
60% do centralized scanning.
33% use individual scanners.
68% use cloud versions of practice management software.
There is much, much more in the full survey results. I hope this gives you a brief snap-shot of what I heard during the webinar and encourages you to read the entire findings.
“There is no way I can justify my salary level but I am learning to live with it.” – Drew Carey
Many firms have acknowledged that they are willing to overpay when pursuing new, hard to find, talent. Where will it end? When will it end? Who knows?
I have two concerns. First, will new, unproven, maybe less skilled employees be making more than proven, long-time team members? How that plays out can cause severe headaches for management.
My other concern is, in response to the situation mentioned above, firm leaders will increase salaries for ALL team members. This could result in significant increases for less-than-stellar performing employees.
I still think that pay for performance applies. Not everyone needs to be treated the same. Top performers should make top wages and get extra perks.
In the CPA world, firm owners worry about what “the other” team members will think and how will they react. They will be complaining loudly.
Don’t ignore the complainers. Talk to them immediately and honestly. Explain to them that Jessica All-Star makes more and receives more because she is a top performer. Then, explain to them exactly how they can become a top performer and thus, make more money. Set goals and challenge them.
You have probably read where KPMG is allocating $160M in salary increases for their 35,000 employees. Their CEO said:
“This increase in salaries embodies our commitment to quickly recognize the value our people create for our clients and firm in times of change,” said Knopp in a statement. “Moreover, it reflects our appreciation for their resilience and consistent dedication to serving our clients and the capital markets with quality.”
Your team members have probably read about this, too.
The more they applaud, the bigger our salary will be.
One comment caught my eye and made me think of all the complaints I hear from my clients and other practitioners, it follows:
“According to the findings of a recent Wolters Kluwer survey of more than 800 professionals from tax and accounting firms, preparers are adapting to a new kind of normal that includes rapid legislative changes, a longer filing season, difficulties in working with the IRS, and the lack of timely information from clients.”
To me, most of these are not “a new kind of normal.” Firms have been facing most of these challenges for years.
If you want to attract and retain talented accountants, this year, focus on solving one of these (to the best of your ability). Train your clients so that the lack of timely information from them is not as big an issue as it has been in the past. Set expectations for them and follow through. Outplace clients who are not willing to meet your expectations. Changing this one “new normal” will help you attract and retain talented professionals.
Want to easily determine which clients should go? Ask each team member to submit the names of five clients who should not be clients. Their answers will probably not surprise you.
By trying to be everything to everybody, you could soon find yourself being a nobody.
“These men ask for just the same thing, fairness, and fairness only. This, so far as in my power, they, and all others, shall have.” – Abraham Lincoln
I always get questions about salaries for the CPA profession. Firms want to know what other firms are paying by level – Staff, Senior, Manager, etc. I even did a limited survey myself but was disappointed by the response.
Yesterday, I read a post by goingconcern addressing CPA salaries in eight cities: Baltimore, Cincinnati, Detroit, Indianapolis, Louisville, Milwaukee, Oklahoma City, and St Louis. The author used various sources.
There are three salary percentiles.
25th percentile: New to the type of role, still acquiring relevant skills.
50th percentile: Average experience, has most of the necessary skills.
75th percentile: Above-average experience, has all needed skills.
For example, here is the listing for an entry-level tax accountant in Cincinnati:
25th percentile: $41,000 -> $39,975
50th percentile: $50,250 -> $48,994
75th percentile: $59,500 -> $58,013
Read the post here. I think you will find it very helpful.
If we expect others to rely on our fairness and justice we must show that we rely on their fairness and justice.
“There are no shortcuts to any place worth going.” – Beverly Sills
As with every Fall, I anticipate the arrival of my copy of the Rosenberg Survey. I learn so much from this valuable resource and it is a very helpful tool as I do my advisory work with local and regional firms.
For example: Why should firms located in cities with over 2 million in population have partner billing rates that range from $474 down to $277?
Firms with lower rates are less aggressive than those with higher rates.
Firms with higher rates believe they are worth every penny of their rates.
Firms with higher rates are often providing more advisory level work and less compliance services.
You can order your copy of The Rosenberg Survey here.
Far and away the best prize that life has to offer is the chance to work hard at work worth doing.
“Great firms continually reinvent themselves.” – Marc Rosenberg
The 2021 Rosenberg Survey is NOW available!
Each year The Rosenberg Survey does an analysis to see which metrics have the strongest correlation to profitability, as measured by income per partner. It never fails, the Top 4 are all related to leverage and rates! As we work with firms who are struggling with profitability, we start by looking at their various leverage ratios followed by comparing their billing rates to like-sized firms in like-sized markets. CLICK HERE to Order the Survey!
The Rosenberg Survey, a comprehensive benchmarking study for CPA firms, is now available! Our Survey is nearly 200 pages, full of dozens of metrics, ratios and analyses of accounting firm financial performance. Order your book today and receive valuable data to help guide your firm. The fee for the Survey is $500. For questions, please contact us at (314) 209-0922 or email chylan@rosenbergsurvey.com.
Facts are stubborn, but statistics are more pliable.
“I’m forever testing myself. As a person and as an actor, I have no sense of competition.” – Michael Caine
Once the Fall due dates have passed, I imagine many of your valuable team members will be focusing more seriously on passing the prestigious CPA Exam.
I often get inquiries about the kind of employee benefits accounting firms should provide relating to the CPA Exam. My advice is always to be generous.
I became aware of a site that provides lots of great (free) information for those focusing on The Exam. I found it very helpful. It features the CPA Exam Requirements by individual states.
A message from CPAExam.com:
We offer free resources on our website which are available to those who are planning to take the CPA Exam. Aside from the free resources on the cpaexam.com website, they can also download the free ebook “28 Things You Need To Know About The Ethics Exam” here https://www.cpaexam.com/cpa-ethics-exam/
Our mission is to provide educational resources which are readily available with rich yet concise information and tips on how to pass the CPA Exam via digital and innovative learning, paving the way for their professional success and for them to lead meaningful lives.
As always, I strongly urge recent accounting graduates to focus on passing The Exam immediately after graduation. Some new hires I have known have already passed The Exam before they reported for their first job at an accounting firm. The sooner you take it the better chance you have at passing quickly. Once you have the CPA credential, you have a definite advantage in building a successful career in the business world.
Another reminder for the firm – be generous and supportive of your candidates.
Everything you want is out there waiting for you to ask. Everything you want also wants you. But you have to take action to get it.
“Being a great place to work is the difference between being a good company and a great company.” – Brian Kristofek
Here are some interesting findings from a recent survey by flexjobs. The last segment about the importance of company culture should be something CPA firms should consider.
44% Know at Least One Person Who Has Quit or Plans to Quit Because of Employers Revoking Remote Work
New FlexJobs survey highlights the high-value employees place on remote work, mental health support, and company culture
Boulder, CO, September 13, 2021 – According to FlexJobs’ survey of over 4,600 respondents, 44 percent know at least one person that has quit or is planning to quit because their employers are requiring them to return to the office. 29 percent are actively looking for a new job because they want to work remotely, while 17 percent have quit a job because it did not offer remote work options.
“It’s a job seeker’s market right now, and workers are more empowered than ever to leave job situations that aren’t ideal, or leave companies that aren’t allowing them to work the way they want to,” said Sara Sutton, Founder and CEO of FlexJobs. “As our latest survey highlights, workers are placing an extremely high value on the option to work remotely, and they’re committed to finding companies that are embracing remote work as a long-term workplace model and have a healthy company culture to support it,” Sutton concluded.
Remote Work Matters:
44% know at least one person that has quit or is planning to quit because their employers are requiring them to return to the office
29% are currently looking for a new job because they want to work remotely
17% have quit a job because it did not have remote work options
21% would give up some vacation time, and nearly a quarter (24%) would take a 10-20% cut in pay in order to work remotely as much as they want
Post-pandemic, 58% prefer a fully remote job, and 39% want a hybrid arrangement that combines both office and remote work; only 3% report wanting to return to the office full-time
However, 42% report that post-pandemic, their employers will require them to be in the physical office; 27% will have hybrid work arrangements; 17% will be fully remote; the remaining 14% were unsure of their company’s plans
Other key insights from the survey:
Mental Health Matters:
70% say a permanent remote job would have a huge improvement or positive impact on their mental health
81% of respondents said having better work-life balance is the #1 factor for wanting a job with a flexible work option
Other reasons for wanting a flexible job include commute stress (50%), family (47%), and exposure to illnesses (43%)
Lack of healthy work-life boundaries would cause 57% to not apply, not accept, or to quit a job
Nearly one in five (18%) said not offering mental health support was a big mistake their company made during the pandemic
Company Culture Matters:
Toxic culture would cause 73% of respondents to not apply, not accept, or to quit a job. Other reasons include:
Micromanaging boss (58%), lack of healthy work-life boundaries (57%), and not allowing remote work (55%) or flexible options (50%); the top reason was a low salary (79%)
Poor communication from leadership was the biggest mistake made by employers during the pandemic (30%). Other top-reported mistakes included:
Not fully understanding the stress of work-life conflicts during the quarantine (25%)
Unrealistic expectations about productivity during quarantine (22%)
“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” – John Quincy Adams
Once again it is time to remind you of the leadership development programs offered by Convergence Coaching. Too many firms have ignored the need for structured leadership development programs and thus limit their choices when considering firm succession.
Convergence’s flagship program:
Transformational Leadership Program™(TLP) – Kicking off with a remote web seminar on November 1, participants pay $6,500 for the year. This one-year “finishing school” for high-potential managers, senior managers, directors, new partners and key administrators includes a combination of one-on-one coaching, two 2-day workshops (in-person or can pivot to remote if needed), 2-hour web-based roundtables, online self-study and a special in-firm project. Participants join a cohort of up to 26 other leaders from firms around the country, learning both from facilitators and each other in this year-long program.
There are also other programs for up-and-comers in your firm:
Leadership Development Program for Seniors and Supervisors (Kicking off October 25)
Client Advisor Program (Will soon be scheduling 2022 dates)
Rainmaker Development Program (Will be scheduling 2022 dates)
Here’s a graphical view of the programs available:
A leader takes people where they want to go. A great leader takes people where they don't necessarily want to go, but ought to be.
