Hiring and retaining staff is a constant concern for CPA firms. In fact, according to remote.com “Employee turnover rates have experienced an average increase of 8.7% since 2019, and projections suggest further escalations in 2023, with anticipated turnover rates of 35.6% in the UK and 46.8% in the US.”
Based on this data it is becoming increasingly difficult for employers to keep talented professionals on board. Newly available statistics from the U.S. Bureau of Labor Statistics confirms the significant increase in job resignations, with an impending turnover "tsunami" predicted to impact American businesses.
This blog explores the factors contributing to this phenomenon, its potential implications for the accounting profession, and provides strategies for effectively hiring and retaining staff in CPA firms.
As per the survey on Job Openings and Labor Turnover conducted by the U.S. Bureau of Labor Statistics in 2022, approximately 50.5 million individuals decided to leave their jobs, surpassing the previous year's figure of 47.8 million. The Society for Human Resource Management warns of an impending turnover crisis, with more than half of North American employees actively considering job changes this year. While the specific impact on the accounting profession is yet to be determined, anecdotal evidence suggests that turnover rates remain high, particularly in white-collar professions.
1. The Resignation Backlog: Many employees delayed leaving their jobs during the pandemic, leading to a backlog of pent-up desire for change. With the easing of restrictions and improved economic conditions, individuals feel more secure in seeking new opportunities.
2. Burnout: The prolonged and heightened stress experienced during the pandemic has taken a toll on employees across various industries, including accountants. Burnout, resulting from increased workloads, longer hours, and blurred boundaries between work and personal life, has contributed to the decision to leave current positions.
3. Epiphanies: The pandemic has prompted individuals to reevaluate their lives, career paths, and personal goals. Many have had epiphanies, realizing that their current jobs no longer align with their aspirations or values, leading them to actively explore alternative options.
4. Remote Work: The shift to remote work arrangements has provided employees with the opportunity to reassess their work-life balance and explore job opportunities outside their geographic constraints. The flexibility and convenience provided by remote work have made job transitions more feasible for many professionals.
CPA firms are not immune to the challenges of hiring and retaining staff. The increasing turnover rates pose significant risks, including loss of talent, decreased productivity, and negative impacts on client relationships. Firms must address these challenges proactively to ensure sustainable growth and success.
It’s important to note that employee turnover is not solely driven by dissatisfaction. While sectors like leisure and hospitality witness employees leaving for higher wages, other industries, such as accounting, have different motivations for departure. In accounting roles, the reasons to look for a new employer is not linked to pricing or compensation but revolves around employee satisfaction, viability, and interest. Though it may seem daunting, accounting firms can also look at implementing these 6 tips to attract and retain talent to address retention concerns.
1. Embrace flexibility: As the pandemic has altered work patterns and habits, remaining flexible as offices reopen is highly valued by employees. Finding a successful blend of collaborative and flexible work environments is essential for firms, considering the workplace is forever changed.
2. Offer balance: Burnout is a contributing factor to elevated turnover rates, as indicated by the Society for Human Resource Management (SHRM). CPAs, who prioritize helping others, may seek jobs that provide better work-life balance. Initiating policies like unlimited paid time off (PTO) can be positive for retention. According to Kimberly Shells, an analyst from Gartner, approximately 65% of individuals surveyed, expressed that they are currently reconsidering the significance of work in their lives. Shells mentioned that their families, hobbies, and communities now hold relatively greater importance compared to the past. Shells also stated that Gartner predicts a 20% turnover rate in the foreseeable future.
3. Ensure future opportunities: While flexibility is essential, employees still desire growth
and career progression opportunities. Firms should blend flexibility and growth prospects to cater to employee needs. The accounting industry's technological advancements necessitate equipping the workforce with the latest tools and training.
4. Reflect core values: Investments in diversity and inclusion can differentiate firms in attracting and retaining talent. Cultivating a workplace culture where employees find value and meaning in their work is crucial for retention. Strong leadership plays a vital role in establishing such a culture.
5. Treat exiting employees well: Firms should consider improving the exit process for employees who resign. Some firms offer departing employees a leave of absence, allowing them to return within a specific timeframe if they choose to do so. Recognizing departing employees' contributions through celebrations can enhance an organization's reputation.