THE PROFESSION’S reputation as the ‘university of business’, and the opportunities it provides for training and career progression, have always attracted talented and ambitious individuals. But in recent years, it has been under immense pressure due to squeezed profit margins and increased competition. This has had a knock-on effect on staff recruitment and retention. In a profession so firmly rooted in the knowledge economy, this is a major cause for concern.
Competition to recruit and retain the best people is only intensifying. Accountancy firms and other professional services businesses – including the Big Four, mid-sized firms and the increasing number of smaller boutique firms – are not only competing for the most high-profile clients and biggest revenues, but for the very best when it comes to their people.
To compound this, the pressure for higher margins and new revenue streams has led many firms to look beyond traditional roles and responsibilities to offer more consultancy services – something that the Big Four have done for some time, but which is now becoming increasingly common among smaller firms too. To get along in this new environment, accountants must be technically competent in basic auditing and account management as a bare minimum, but must also be well versed in a wide range of general business and managerial skills to enable them to offer the strategic advice required.
In many ways the profession is doing very well when it comes to attracting talent, particularly at graduate level. All the major firms invest in a huge graduate recruitment drive each year and 10% of all graduates settle in roles within the accountancy bracket. But what are firms doing to retain these graduates – and indeed other members of staff on whom they rely to provide high-level consultancy advice?
In a profession dominated by limited liability partnerships career progression and the climb to partner will always be a priority, but in the fight to snap up and retain the best people, firms must also focus on how they’re incentivising staff beyond promotion and basic salary – something that will become increasingly important as people stay in work for longer, creating fewer opportunities for younger accountants to progress.
We know that the interest in ‘total reward’ has grown, which isn’t too surprising as many firms have been reluctant or simply unable to commit to wage rises in recent years, and bonuses are generally getting smaller. Economic uncertainty has led to employees placing far more importance on employee benefits that provide long-term financial security. These include products like medical insurance or Income Protection, which pays a regular monthly income to staff if they are off sick for more than 6 months. This might sound an unlikely scenario, but 300,000 people in the UK go on long-term sick leave each year and only 1 in 10 people have a back-up plan to prepare for this eventuality. Income Protection is also one of the few benefits to provide a payback for businesses if they need to claim – through not having to pay Occupational Sick Pay and through indirect cost savings associated with replacing staff, recruitment and absence management.
The key point is that it’s not about spending more, but about spending smartly. But even when firms offer the right mix of benefits that work hard for both the business and employees, HR departments have a job to do if they are to communicate the overall package effectively. Research from Cass Business School, commissioned by Unum, has shown that failing to tell staff about the benefits on offer is costing professional services firms £396.6mn every year, through increased staff turnover and sickness absence. Put simply, if a business fails to communicate what is available and what this means in real terms to employees, they are essentially throwing money down the drain.
For firms, the need to offer competitive benefits and communicate them effectively to employees is clear. As the workforce ages, and the road to partner becomes longer, firms will need other ways to attract and incentivise the best people. In a sector that depends so much on its people, this has never been more important.
Steve Harry is chief financial officer at FTSE 100 income protection insurer Unum
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