Turbulent Times Survival – Developing Your Staff for the Future

 

As the heavy work load of tax season fades into the distance, CPA firms are wondering 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 individual consumers, are evaluating their spending and cash flow options and will likely decide to defer discretionary spending into the future when they feel more comfortable with the economy. Therefore, it is likely that many CPA firms will be looking to 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, additional 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 that 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 is 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 industry 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, these are the people that will be first to go when firms reduce their 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. The staff wants to be a part of the solution. Fear is a powerful motivator and now is a perfect opportunity for management to get the entire organization engaged in seeking opportunities to better serve clients and bring in new ones. No one has closer contact with clients than the staff. Therefore, it only makes sense that the staff understands what questions to ask and what signs to look for in dealing with the client base. This requires a lot of communication and guidance from firm leaders, both in group settings and one-on-one.

 

Advancement opportunities: Leadership should also communicate what it takes to advance in the firm. Strangely, it is often one of the best kept secrets. At my former firm, we developed a list of 16 Core Competencies that staff needed to master to advance in the organization. New hires were made aware of them early on and the competencies became the basis for our performance feedback tool. 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 what is expected of a partner and what the rewards are. There are too many misconceptions by staff to let this go to chance. A healthy open discussion between firm leadership and partner candidates can go a long way in promoting life-long commitments to the firm. In the meantime, partners must lead by example by living the firm’s values and following firm policies and procedures. Further, they need to take time to nurture and develop staff. Interestingly, staff can help the partners become better at managing and coaching. We conducted upward evaluations several times at my firm and the results were sometimes astonishing. Partners don’t realize the impact they have on staff and I saw several partners make tremendous changes as a result of what they learned through the upward evaluation. The time spent by partners coaching and training staff will pay off well in developing the firms future leaders which is so important in resolving the firm’s succession issues.

 

Challenge your staff: Keeping the staff motivated and engaged requires a conscious effort by the partner group. The tendency is to feed them raw material and expect them to crank out widgets. But partners should put themselves in the staff’s place and remember what it was like in earlier days. Employees want to know that what they are doing is important. They like to know how it relates to the big picture. They want to learn new things. 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. This not only forces the staff to learn and grow, but requires the delegator to seek more challenging work or develop new work for the firm. Partners who follow this rule will find they have adequate time to be doing partner activities, such as business development, coaching and training staff, building relationships, or creating new services.

 

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. This goes beyond technical subject matter. 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 their people be better at speaking, listening and writing, delegating, supervising, dealing with difficult people, business development, managing projects and many other leadership skills.

 

Be flexible: Each generation has its own unique peculiarities and this often causes issues within an organization. Although they 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. Therefore, firms need to find a way to provide flexibility in how people work. My firm had numerous part-time arrangements with employees at all levels, with each one being unique. Firms might also involve their staff in discussions on how work is to be completed, the look and feel of the office environment and other firm issues so as to provide an employee friendly experience. As a side benefit, this will serve as a differentiator in your recruiting efforts.

 

“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. It is part of their culture. Firm leadership should assess how much fun their team is having and what affect it has on team morale, recruiting and retention, and client relationships. At my former firm, we developed our own version of “Deal Or No Deal” during tax season that served as a diversion to the task at hand and kept people engaged. In addition, many of our offices had their own ways of keeping it fun which also served to bring the team members together, often in a more social setting. During the summer months we held various team retreats that served to combine continuing education with social activities. These served as evidence that the firm intended to live by its value statements.

 

In Conclusion

 

Yes, the economy is down and firms are looking for ways to survive it. But it will improve and those firms that treat their people right in hard times stand to have a better chance of seeing their employees return the loyalty in good times. Partners may need to sacrifice some current income in order to keep a quality staff, but it will pay off in multiples in the future. Those 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 website at www.michelconsultinggroup.com or contact Tim directly at tim@michelconsultinggroup.com.