| This column for CCH was spiked for being too controversial. Even though the Editor agreed with the argument. In every industry there are areas where talent is scarce, where organisations can’t recruit. There is a solution for each industry, but it is often a multi-faceted and seemingly difficult one. Most importantly, the problem is unique to that industry and so the solution needs to be tailored. This article, rather than looking at the generalities of solving talent scarcities (fast becoming clichés), focuses on one industry with a major problem, the Accounting Profession. Let’s start with a very global view of the Accounting Profession, where there are three broad groups of people: - Those that do the work
- Those on track to become Partners – they do the work and also start to bring in new work
- Partners who sell, manage the clients and supervise the work
All three groups are critical to how the Profession is currently structured. It is in the first two groups that the Profession is struggling. This then contributes to a lack of potential new Partners, resulting in many smaller firms being concerned about their succession plans. The people who do the bulk of the work in a firm are the more junior people and there is a major shortage of talent in this area. This is a strategic problem for firms, as they rely on delegating work to give them leverage and generate profits. Why the scarcity amongst junior people? Firstly, it is tough to recruit them. Secondly, when they can recruit, the staff often do not stay to Manager or Partner level. Let’s look at the reasons for these two related problems. Firstly, the old model of Partnership does not appeal to a lot of young people. That is, the workaholic, minimal work life balance, which predominated in 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 analysing 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 doesn’t appeal in this faster paced world. The firms who are having success in recruiting first needed to shift their model, to move away from the ‘there’s nothing in it for me’ approach. They needed to create some flexibility, some balance and create a variety of different career paths so that good people wouldn’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 crave. Designing jobs that young people want is therefore the first part of any solution. The second part is recognising a reality in the industry: that over half of young accountants in the Profession are from Asian or other migrant backgrounds. This has come about largely because migrants have been overwhelmingly attracted to serious, technical professions such as accounting – it can be seen on every campus in Australia. The result is that they make up the largest body of young accountants. They also have great qualifications and technical skills as typically they have studied hard – a generalisation, but true. Migrants all over the world have always needed to work harder. However, the down side is they sometimes haven’t developed their communication skills to quite the same level, and a proportion have relatively poor language skills. Which are skills needed to be good at sales. Why does this lead to staff turnover? Two reasons. Firstly, their strong technical skills are in demand outside the Profession. For the group who don’t have sales skills, they reach a level in the Profession where they hit a salary ceiling. Put simply, he who brings in the business gets highly paid in any professional service. In industry or commerce, their skills are in high demand and there is no need to sell, so senior accounting roles are available to them. Secondly, it is the employer making the decision. Usually not consciously, but by not paying them enough, not promoting them. The Profession’s model of seniority is largely based on bringing in the business and becoming a Manager and then a Partner. When this issue of some of the younger people not fitting the traditional industry Partner model is overlaid with the normal Gen Y problem – we have a problem Houston! Recognising and admitting that this is an industry wide issue is step one. But what are the solutions? The first is for firms to give serious thought to who amongst their team is most likely to make Partner and want to invest in themselves to achieve that goal. Next invest in training these young people in relationship building skills, interpersonal skills and account management. Many of the larger firms have done this for years, but not the smaller firms. Even for the larger firms, it is recognising that they will need to commit more resources to ‘client skills’, the so called softer skills that are too often ignored. So, the first and most important step is to work with and improve the people you’ve got. 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, who has the technical skills. After all, you have client deadlines to meet, budgets to attain. However, will they have what you need in 5 years time? Will you be giving them what they need to stay? If not, you need to fish more broadly – for people 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. Regular readers of this column will know that the solution does not lie with agencies who do ‘body shopping’. That is, 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 this way. Now it stuns me that anybody would think that this is a good way to recruit people. That firms would get unbiased, unconflicted advice that would help them hire great people. There is a chapter in my book on this - the only person that benefits from this system is the body shopper. Secondly, you need to take a long term approach to recruiting. 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 in the market place for people and reach the people they want. If you can’t talk to them, you can’t explain why careers with your firm are different and all the great things you offer. The solution is to co-operate with 3 or 4 other firms, and we are working with firms to help them do that. To share the huge costs of advertising over a number of firms who are all seeking slightly different people. It works. Combined with the other suggestions in this article, firms that take this approach don’t see any scarcity. Just abundance. | 