In my current role as consultant both to former and current clients, I have worked with several public accounting firms and staff regarding their internal policies, including succession planning. My answers to the following questions are in response to my observations and discussions with these relevant individuals.
In the past year (2019) have you noticed any trends in practice at your firm/organization? For example, changing workloads; challenges in recruitment and retention, training, or promotion; outsourcing of accounting services; staff shortages; or tapping into retirees?
Workloads have not diminished, and contrary to what people think, partners are working just as hard as staff. You see more partners getting into some of the more nitty-gritty work in assisting staff to get the job done. I think there was much more training at the firm level in earlier years than there is now. Training now consists of mostly technical accounting issues, including audit and tax; training on management and other related issues appears to be less than in previous years,
Some staff stay for a long time because they’re satisfied with salary, work levels, work environment, and the relationship they have with other staff and with partners, as well as seeing a more professional track to more senior positions. But this happens less and less; people are seeking other opportunities for themselves. Some people go into private accounting and possibly come back to public, as I did, or seek other public firms where they perceive a better work environment.
In terms of retention, I have seen firms trying to enhance their environment as it relates to staff motivation. This is firm-based, not necessarily throughout the profession. Some people want instant gratification, but they have to show that they’ve reached a certain potential before they get promoted. Maybe a particular firm is not promoting them fast enough because of the need for increases in salaries and other benefits. The same happens with managers, because everyone wants to be on the partner track.
In addition to technical training, firms want staff to think out of the box and come back to the firm with input on potential inefficiencies at the client, and communicate this to more senior staff. This is a different type of training, but it’s a business training that you should receive on a recurring basis.
I think firm recruiting is difficult. At the staff level, you don’t see enough talent coming out of the schools. Firms should really find out what the younger staff are thinking when they come out of school.
According to the 2019 Rosenberg Survey, there is a huge divide between the age of partners and professional staff. Have you seen the same? Do you think this has an impact on retention?
Firms are very concerned about who they make partner. Every firm has its own level of review of each person, and they do attempt to put managers on track based on the talent of each manager. If that doesn’t come to pass, for whatever reason, that manager might leave. So it’s a question of training people, which I said before, to the level where they should attain partnership.
What does partnership mean? You’ve climbed up the ranks based primarily on technical efficiencies. Partners generally focus on business issues as well. I think you’ve got to bring that down to the manager level as well, because as the partners get older, who is going to fill that void? If you don’t train people sufficiently at every level—if you don’t get the staff people to a senior level, senior to manager, manager to partner—we see in some cases a considerable gap between the staff and the partners.
Today we see firms are asking partners to retire at earlier ages; these people have gained so much expertise, why throw them out the door when we see younger partners not filling that void? But it appears the profession has not trained enough people to get to that partnership level.
I think some of the older partners who are ready to retire are looking back at their firms and saying, “I’m going to let these young guys take over the firm with confidence to pay out my retirement.” Shame on them, since in some cases they haven’t trained younger partners as well as they should have. Succession planning is a big issue. I am told this is one issue that contributes to mergers in the profession.
The 2019 Rosenberg Survey found that the percentage of women partners continues to grow very slowly, especially at large firms. What have you experienced? What explains the challenges the profession faces in achieving greater gender parity?
In previous years, there were very few women partners—I think that’s changed dramatically. You also see more clients with CEOs and COOs who are women. Firms have noticed that if you’re working with clients who are women, it encourages you to hire more women and bring them up the ladder.
In previous years, there were very few women partners—I think that’s changed dramatically.
According to the survey, revenue per partner and equity per partner are increasing. Leverage (the ratio of professional and administrative staff to partners) seems to impact this. Can you comment on this—do you see burnout and extra work increasing among non-partners? Are you witnessing greater unhappiness or staff turnover?
I think this is a firm-specific situation. As noted above, workloads have not improved; in fact, they have gotten more burdensome according to my sources. This appears to contribute to staff turnover.
In some cases, the significant ratio of partner to staff increases revenue and equity per partner. In addition, the partnership has to successfully manage all aspects of a firm’s structure to create maximum efficiency. We see this as a necessity since fees appear to be very tight.
Can you weigh in on what you’ve seen in 2019 in terms of new practice areas, new regulation, legislation headaches, and new emerging technologies and practice growth areas?
The not-for-profit sector has experienced more changes in regulations and legislation. The for-profit sector has also seen significant changes in accounting regulation, as well as new practice and related guidelines. This is requiring more staff and partner training. We have seen new practice areas in non-accounting-based consulting. These include management and related issues, specific expertise by client service areas, and creating new staff initiatives with such expertise. These services help increase a firm’s service capability. This also includes new technology, which has helped firms improve services to clients and created more internal efficiencies.
What concerns do you have about the professional marketplace? Do you think there has been a dilution of the value of the CPA license?
We know that all professionals require a CPA license to succeed. Organizations know that they’re looking for the best talent with the required criteria. The public understands this, therefore the CPA license maintains its value in the marketplace.
How would you counsel high school or college students about careers in accounting?
The profession has been shown to be lucrative from a financial point of view. You get a very broad aspect of what the business world is like. There continues to be a lot of opportunity.
Do you find your work satisfying? Valuable? Meaningful?
It’s been very satisfying. Here I am, at the tail end of my career. I’ve made several strategic moves when I needed to broaden my experiences. For me professionally, it has been and continues to be very satisfying, because I get to see all areas of the profession, both on the private side and the public side.
Historically, CPAs were responsible for protecting the public, ensuring the integrity of financial statements for all stakeholders. Do you think this is still the CPA’s role? Is this still a critically important objective?
I see the profession in total has created a positive image. I think maybe we need a little bit more PR about what our role is, not just for our clients, but for the public as well. That responsibility in the marketplace is easy to explain, because we understand stakeholders’ needs, which I see firms take seriously.