The Evolving Employee DNA

By: Tom Barry, Managing Partner, Green Hasson Janks

Tom Barry

DNA is the genetic code of organisms. The dictionary defines it as “the fundamental and distinctive characteristics or qualities of someone or something.”

What does this have to do with accounting? Is this article about science? Not exactly. It is about the science – and art – of identifying and understanding an accounting firm’s evolving “DNA,” or culture, as the foundation for a successful organization and thriving employees. We are exploring how the future of the industry is requiring us to examine how we hire, develop and nurture our talent.

The Future of Accounting

An accounting firm’s DNA had typically been based on a historical legacy, carried over from an era where the profession looked far different than today – and certainly not reflecting where the profession is headed. Accountants were essentially historians, who were paid to look back at books and records and identify issues and errors. Fast forward, the role of accountant has evolved to that of a trusted advisor, one who can accurately provide clients with insights to illuminate good decisions. But with the advancements of technology, big data and the pace of technology commerce, accountants need to be trusted futurists. As my predecessor, Leon Janks, stated well:

“It’s now our job as advisors to sort through this data, analyze and determine the best practices to help our clients reach their potential and grow their business. Businesses exist in a very dynamic environment and management needs to be agile in order to make changes and anticipate the future.”

There are three main factors related to the evolution of accounting firms: technology, generational differences and diversity of thought.

Accounting Firms and Technology DNA

The accounting profession is 7,000 years old. The AICPA was founded in 1887. We can rest assured that change and evolution of the profession has occurred more times that we can imagine. So how is today different? In a word: technology. Technology is considered to be an evolutionary process in that it evolves exponentially, known as Moore’s Law. Each generation of technology speeds up the subsequent generations’ advancements, which causes accelerating change. It does not just feel like the rate technology changes is accelerating, it actually is. Therefore the DNA of tomorrow requires accountants to be well versed in their “toolbox”: the computer, and the impact of technology.

The Generational Impact on DNA

Now that a majority of a firm’s employees are in different generations from its leaders, old rules do not apply. Your business, your clients and your talent continue to evolve, so staying ahead means keeping vigilant on evolving trends, client needs and talent needs. One trend to watch is generational differences. Younger workers want a reason to come to work. They want to feel that they matter, that their work matters and that they are contributing to something bigger than themselves.

In 2017, millennials (born 1981-1996) made up 38% of the nation’s workforce, more than any other generation.[1] Going forward, millennials will dominate the accounting industry, comprising 75% of employees by 2025.[2] Generation Z (born 1996-present) will continue the evolution. We hear some older generations complain about the needs of younger workers, but their needs are now the business’s needs, and leadership has an opportunity to create an environment in which employees understand their generational differences and work together effectively.

The DNA of the Diversity of Thought

Our industry’s client experience is evolving from compliance to an advisory mindset. This is a change that involves aligning ourselves with the client’s needs and helping them reach the right solutions. Making this change takes a new skill set, and recruiting the right talent becomes even more important.

Creating teams that bring diversity of thought increases the opportunity to deepen the client experience and cross-pollinate internal learning across different backgrounds and levels of business acumen.

We are in a war for talent, and the need for people with a consultative mentality makes it even more difficult. We can look at this as an opportunity rather than a challenge, however. Defining your firm’s DNA includes defining what type of employee you need and want.

Having a diverse team is key for creating a consultative approach and developing the ability to ask the right questions. When employees asks questions that come from understanding the client’s culture, strengths, challenges, best practices and industry sector, they are more effective as consultants and advisors and provide a more meaningful client experience.

At Green Hasson Janks, we seek people who are genuinely curious and ask insightful questions. Our candidates are collaborative and like working as part of a team. They are problem-solvers. Candidates who match our DNA are not always easy to find through traditional means, and a broader perspective makes sense.

One reason for the smaller candidate pool is that the unemployment rate for accountants and auditors was 2.0% in the second quarter of 2018, much lower than the 4.0% national unemployment rate, according to the latest quarterly report from the U.S. Bureau of Labor Statistics (BLS).[3]

To find alternative talent pools that match a firm’s DNA, some are looking to individuals with disabilities, older workers, veterans, freelancers, apprenticeship programs, former employees or customers. Bringing in new types of employees adds diversity of thought and also can add new cultural or regional perspectives that can speed innovation.

Making talent acquisition changes based on your firm’s DNA also adds more roads to tomorrow’s success. For example, it has the potential for adding creativity and innovation to your business and the client experience. It has been proven that more diverse teams increase innovation and business outcomes. Innovative approaches and solutions may emerge through idea generation, teaming and collaboration. A wider range of people and thought may also lead to new product and service offerings that differentiate your firm and the client experience.

Where We Go From Here

To attract, develop and retain employees that are the right fit, a firm must be able to articulate its culture. Most can define somewhat random keywords (e.g., friendly, businesslike, conservative, liberal, technical, and specialized, etc.) but may not have an overarching definition that touches all aspects of the business. Agreeing on a definition is core to redefining a firm’s DNA. A culture is unique to every firm, and one size does not fit all.

We went through a yearlong process at Green Hasson Janks to define our culture in a way that reflected our values and could take us well into the future. We embraced the principles of Simon Sinek, who asks organizations to define “What is our Why?” The Why is our DNA. Each firm is different, with values that roll into their own unique Why. When those values are applied to behavior, the result is culture. Each individual also has their own Why, which is a filter through which they make choices, at work and at home, that lead to fulfillment.

With this in mind, we have been able to create a much more specific profile of the person that fits our DNA, our Why, our culture. A strong definition of the person we want in our organization streamlines the hiring process and aids in retaining and developing our talent as their careers unfold. That reduces HR cost and supports the employee’s happiness in working at our firm.

Employee DNA will continue to change, and accounting firm culture will continue to adapt and change to meet new worker and client needs. Firms that frequently define and redefine their DNA have an advantage.

Tom Barry is a CPA and Managing Partner at Green Hasson Janks, a Los Angeles accounting and consulting firm that specializes in nonprofit, food and beverage, health and wellness, and entertainment and media companies. Barry’s role is a combination of entrepreneur, partner, consultant, mentor and business advisor. He provides audit and accounting, tax and general business consulting services to clients in a variety of industries including waste management and recycling, manufacturing, distribution and the restaurant industry. He can be reached at tbarry@greenhassonjanks.com.

 

[1] https://www.accountingweb.com/practice/growth/millennials-now-make-up-largest-workforce-generation-in-us

[2] https://karbonhq.com/accountant-resources/articles/8-traits-of-millennials-that-will-benefit-your-accounting-firm

[3] https://www.roberthalf.com/blog/job-market/a-look-at-the-quarterly-accountant-unemployment-rate