The War Over Talent
If you had the choice between the “right” compensation system and the “right” people, which would you choose? We’d take the right people any day. Here’s why.
December 15, 2011
Many would argue the war for talent is more intense than ever. Some would argue we are just now learning how to fight the war. According to the Bi-Annual PCPS MAP Top Five Issues Survey, finding and retaining top-quality staff is the most pressing obstacle for most firms. Ask any managing owner in any size CPA firm about his or her firm’s greatest business challenge. He or she will likely tell you the number one issue facing the firm is a shortage of staff. And it’s not just placing bodies at desks, but getting people who closely match the firm’s culture (or desired culture) at those desks.
In 1998, readers were asked by The McKinsey Quarterly to answer the following two questions regarding their hiring and retention:
How would you answer these two questions? How would your owners answer them? Would their responses be consistent? How would each employee in your firm respond to the questions and how consistent would their answers be with one another’s as well as your owners’ answers?
When it comes to recruitment and retention, some firms focus effort on recruitment, while others focus effort on retention. Sadly, some focus on neither. But it’s never really an either/or proposition. Firms, of course, need to focus on both! And individuals who are involved in recruitment and retention activities must be rewarded appropriately. In our consulting practices, we strive to help firms focus on retention by helping them develop programs in four areas:
Creating a Total Compensation Philosophy
The key elements of a total compensation philosophy include the following issues:
Becoming a Great Place to Work
In many areas of the United States and Canada, public accounting firms are joining the lists of the “Best Places to Work.” Those firms that make the list incorporate the following into their work environments:
Developing Programs for Growth Opportunities
It goes without saying that each firm needs to develop a program that satisfies the needs of its owners and staff. Investing in the development of hard and soft skills of its people is crucial for a firm’s long-term success:
Clarifying and Working Toward a Compelling Future
Mission, vision and values are living elements that energize people in the firm and motivate them to do their best day-in and day-out:
Each of the above areas is key when it comes to recruitment and retention. Why? One of the reasons firms often do not retain people is they fail to deliver what was promised during the recruitment process. For example, recruits are often told during the recruitment process that employees are valued above clients — because, after all, without satisfied and loyal employees there would be no clients — only to find out the firm allows clients to mistreat its employees. Recruits are promised they will receive lots of client contact and challenging client assignments only to discover owners who hold client relationships and client work close to the vest.
To motivate firm members to engage in the proper behaviors, activities, and initiatives, firms must design their compensation systems accordingly. The owner who allows clients to mistreat the firm’s employees and rarely provides employees the opportunity for client involvement should be given such feedback, and his or her compensation should be affected in light of other performance criteria. Likewise, the owner who involves team members regularly in client interaction and addresses inappropriate behavior on the part of a client toward employees should also be compensated accordingly.
One of the best tools to help you determine the ultimate systems and programs you should put into place is Marcus Buckingham’s and Curt Coffman’s book First, Break all the Rules: What the World’s Greatest Managers Do Differently, in which they suggest the answer to the following questions should be positive. If not, employers should give consideration to the systems and programs that will nurture a “yes” response.
To retain employees, you must first recruit them — a topic of growing proportion these days as the war for talent rages on. Again, sadly, professional services firms are not doing the best job they can in this arena.
Why? Because firms are generally not asking their leaders to get intimately involved in these activities, and even when they do, the firms are not compensating those leaders who do get involved and who do make a difference.
This article has been excerpted from Compensation As a Strategic Asset: The New Paradigm. You can find more information about the publication on CPA2Biz.
August Aquila has been recognized as one of the “Top 100 Most Influential People in the Accounting Profession” and works with firms the US, Canada and abroad. He specializes in compensation plan design, succession planning and mergers for CPA firms. Coral Rice, a senior consultant in FranklinCovey’s 4 Disciplines of Execution Practice, is noted for her solutions to the accounting profession. Her no-nonsense, yet practical and fun style make her a frequently-requested consultant.