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‘Old-fashioned’ firms urged to re-evaluate retention strategy

Accounting firms that only look to pay as a retention strategy are likely to lose key staff going forward, according to a chief executive.

Business Emma Ryan 20 October 2021
— 2 minute read

Speaking to Accountants Daily, Succession Plus founder and CEO Craig West said accountants have been increasingly stressed throughout the pandemic, inviting many firms to consider how they support their people and whether previous measures were enough.

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“Accountants are stressed. Any business that is reliant on government support requires additional accounting support. I call this COVIDpliance to represent all the extra work accountants are doing to make sure their clients receive the benefits they are not only entitled to but need to survive,” Mr West said.

“For example, the original government grant application needed to be accompanied by an accountant’s letter confirming the drop in turnover threshold had been met. In addition, new budgets and cashflows must be provided when things change, and banks and funders need reassurance too. This is all work that falls on accountants’ shoulders.”

This stress, combined with other factors, has led to many exiting the profession over the past two years, Mr West explained.

“At the same time, a key source of staffing – expats on working holiday visas – has disappeared during the pandemic, tightening the labour market. This is all taking a toll on staff, who are working hard and are also stressed. The labour market for professional services is tight. We’re seeing cases where substantial wage increases are being offered to retain and attract staff needed to complete the additional compliance work,” he said.

“At our own firm, we have been actively recruiting for both a tax expert and a valuation analyst for over six months and twice now the candidates have elected to stay where they are based on a substantial pay increase – in one case $25,000 with a stay bonus of $25,000.”

Mr West said some firms are responding to the challenges by rolling out a series of incentives. For example, he’s seen some firms introduce a me day whereby employees get one paid day off per month. Other incentives he flagged are firms adding a flexible work-from-home policy independent of and post-lockdown, short-term incentive bonuses like restaurants and travel vouchers, generous salary boosts and share ownership plans put in place to allow employees to own a share of the firm they work for.

“Strategies such as pay increases and stay bonuses have a real cost to profitability and in the current economic climate cannot necessarily be passed on to clients as a fee increase,” Mr West noted.

“Firms are finding they need to be far more creative with how they reward staff. Fortunately, total employee benefits packages that include many of the items listed above can often work far better than a salary increase or bonus alone.”

Mr West said alternative ways to motivate and retain staff are rising in both awareness and popularity.

“Employee share ownership plans are increasingly being sought by business owners who want to gain immediate term productivity and engagement benefits while providing longer-term stability for their business. Employee ownership can be suitable for both private and public companies, large and small,” he said.

“It’s important to explore what your employees actually want. For many, income is not the predominant driving factor, they are often looking for career progression, mentoring, professional development and a flexible and enjoyable environment to work in.

“In addition, many employees are reassessing their work life balance as a result of COVID-19, and this means firms must re-examine the old-fashioned view that everyone needs to be in the office 9-5, Monday to Friday. I know many practice owners who still believe this is the only way to work. But it doesn’t need to be this way.”

‘Old-fashioned’ firms urged to re-evaluate retention strategy
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Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media and editor of the company's legal publication, Lawyers Weekly.

Emma has worked for Momentum Media since 2015 and has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.

A journalist by training, Emma has spent her career connecting with key industry stakeholders across a variety of platforms, including online, podcast and radio. She graduated from Charles Sturt University with a Bachelor of Communications (Journalism).

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