In every industry there are areas where talent is scarce, where organizations can’t recruit. It’s the very nature of business. The thing is, there is a solution for each industry, but it is often a multi-faceted and difficult one. What’s interesting, however, is that the very problem is often quite specific and unique to an industry. Any solutions therefore need to be tailored.
Rather than looking at the generalities of solving talent scarcities (which is fast becoming a worn-out cliché in my opinion), this article focuses on an industry facing these very issues. It’s an industry we at Abacus Recruitment have worked extensively within for many years: The accounting profession.
Let’s start by looking at three broad groups of people within this profession:
(1) Those who do the work.
(2) Those on track to become partners — they do the work and also start to bring in new work.
(3) Partners who sell, manage the clients and supervise the work.
All three groups are critical to how accounting is structured, but is in the first two groups that the profession is struggling to recruit good people. This then contributes to a lack of potential new partners, resulting in many smaller firms being concerned about their succession plans.
Generally speaking, the people who deliver the bulk of the work in any given firm are the more junior people, and we’re currently suffering from a major shortage of talent in this area. This is a strategic problem for firms as they rely on delegating work, which then provides them with the leverage to generate profits.
But why the scarcity of junior people, you ask? Firstly, it’s becoming tough to find and recruit good juniors in this industry. While firms are successful in attracting good employees, those people often leave before reaching manager or partner level, so the skill, experience and potential is lost.
Let’s look at the reasons for these two related problems. Firstly, the traditional (albeit ‘old’) model of a partnership role is failing to appeal to many young people. That is, the stereotypical workaholics with disproportionate work-life balance (something all Gen X and Y now demand) that dominated the industry and largely still does. When I was a young accountant at Price Waterhouse, we were told to work hard, bill our clients hard and work for essentially a pittance. If we kept our noses clean for long enough, we would be rewarded with riches: a partnership. And the rewards were rich, particularly for the partners in the big firms.
For those of you who have been to seminars analyzing what Generation Y (aged under 30) want, you know it is not this. The rewards need to come faster, and they expect, even demand, a more balanced life.
So the old career model is failing to appeal in this faster-paced world. The firms that are successful in recruiting are creating flexibility and balance and a variety of different career paths so that good people won’t be forced out. One obvious example is to allow mothers to work part time but still give them the responsibility and challenge that they (quite rightly) crave. Designing jobs that young people want is therefore the first part of any solution.
The second part is about recognizing a reality in the industry: that collectively the technical skills we now have are sufficient. What the industry lacks now is enough people in the hot-seat for potential partner-status: i.e. those who possess an equal balance of technical skills and inter-personal skills required to do the networking required as a firm’s partner. Both skills and attributes are equally important to the success of any accounting partner and the firm.
Why does this lead to staff turnover?
Two reasons. Firstly, strong technical skills are in demand outside the profession. For the group that doesn’t have sales skills, they reach a level in the profession where they hit a salary ceiling. Simply put, he who brings in the business gets highly paid in any professional service. In industry or commerce, technical skills are always in high demand and there is no need to sell, so senior accounting roles are available to them.
Secondly, the employer can abet (usually unconsciously) in staff members’ decision to leave by not paying them enough or promoting them. The profession’s model of seniority is largely based on bringing in the business and becoming a manager and then a partner.
Recognizing that this is an industry-wide issue is step one. But what are the solutions?
The first is for firms to take stock and give some much-needed thought to who in their practice is most likely to make partner. Once selected, invest time and money in them. Design a role that suits the firm AND the person.
Next, invest in training these young people in relationship building, interpersonal and account management skills. Many of the larger firms have done this for years, but it hasn’t typically been a well-resourced process within the smaller firms. Even for the larger outfits, it’s about recognizing the need to commit more resources to ‘client skills’ so the so-called softer skills are too often ignored.
The second step is to increase the diversity and talents of those being hired. It is too easy to settle for someone who can do the job now because they have the technical skills. After all, you have client deadlines to meet and budgets to attain.
However, will they have what you need in five years? Will you be giving them what they need to stay? If not, you need to fish more broadly — for employees with different backgrounds and skills, and in particular the people skills needed for partnership.
How you do that is difficult because there is such demand for these scarce people. It is also hard to move them from one firm to another as they are risk averse, and some have a belief that accounting firms are all the same. To an outsider with imperfect knowledge, it often seems that way.
The solution does not lie with recruitment agencies that engage in ‘body shopping’, i.e. find an in-demand applicant who wants a job in the profession, and the agency sends their resume to four, six or even ten firms! Over 90% of recruitment firms in accounting recruitment work in this manner.
It stuns me that anybody would think that this is a good way to recruit people or that firms would get unbiased advice to help them hire great people. The only person who benefits from this system is the body shopper, the recruiter.
Secondly, a long-term approach to recruiting is to treat it as a campaign, not a one-off transaction. Have a plan and stick to it!
But thirdly, and most importantly, how can one firm (even a large one) cut through the market and reach the people they want to attract? If you can’t talk to your prospective employees, then you can’t explain why a career with your firm is different, and better, than a career anywhere else.
The solution is to engage in co-petition (as opposed to competition) with your competitors. This rests on the premise that you work with your competitors to challenge and address the staffing issues you face rather than continue to feed the hand that bites you (the majority of recruiters).
Having recognized the issues facing accounting firms large and small, we at Abacus are creating a network of accountancy firms all tasked with the same goal, to attract the right mix of employees both now and ongoing. By joining the network, these firms share the huge costs of advertising over a number of firms who are all seeking slightly different people.
We then put in place a selection process using recruiters who formerly worked in the profession to thoroughly screen the applicants. Their role is to ensure that they are joining the right firm for the right reasons.
It works. Firms that take this approach don’t see scarcity. Just abundance.
Keep reading below to find the conclusion of Toby's 18 years in recruitment has brought him to create the Ultimate Recruitment Kit.
Toby is an active speaker on the international conference circuit. He speaks on Recruitment and Selection; The Changing World of Employment – How to Recruit; and The Great Staff Scarcity Myth.
In early 2007 he created The Ultimate Recruitment Kit for companies – the ultimate creative recruitment guide. His mission: To give all companies, no matter how few employees they have, the information and expert help they need to do their own recruitment and selection and find great new staff. If you like what you have read so far, you can get more information and resources at
www.YourRecruitmentCoach.com
If you are in Australia and are interested in Recruitment Services and help with particular recruitment and selection problems, you can go to Abacus Recruitment Solutions at
www.abacusrecruit.com.au
