At a recent UK audit and assurance conference, 77% of attendees agreed that retaining talent was the biggest practical challenge facing audit and accounting firms today.
The panellists discussed a range of issues impacting their firms – from the top 5 to small independent firms. And this boiled down to two key topics:
- How to attract people to start a career in audit
- How to retain people in audit once they are qualified
In the UK, the ICAEW are experiencing increased numbers of students studying the ACA qualification, which is contrarian to territories such as the US – where the talent pipeline is drying up. So, for the UK at least, it seems accountancy remains an attractive career pathway at a grass roots level.
The bigger issue is retention of staff once they start their career. And this question is the more interesting one to me. It got me thinking about my own career in audit.
I qualified with a Big 4 firm. And like many of my colleagues, I viewed achieving the accounting qualification as the keys to my career freedom. My intention was to stay in audit until I qualified, and then I would do something more interesting!
But when I qualified, I didn’t leave. In fact, I spent a total of 10 years in audit. So, what was it that made me stay that long? And what can medium and small audit firms do to retain talented staff at risk of leaving once qualified? Here are 10 areas to consider.
Let’s start with the most obvious. Is your remuneration strategy compelling qualified staff to stay or leave? Are you keeping up with inflation and the cost of living?
Beyond base pay, do you have meaningful bonus schemes, which recognise the team’s contribution to the firm’s success? Is there a meaningful difference in remuneration between high and low performers? I.e., are bonuses biased to reward the most talented team members? Or is the remuneration only tolerable to get to the pay-off – making Partner.
The wage gap between practice and industry has narrowed significantly in the past 18months, meaning the greenness of the grass has faded a little. But there is no room for complacency on this.
Losing great staff is costly. Recruiting and onboarding new staff members is expensive. Make sure your remuneration is rewarding and retaining your best team members.
One person at the conference I attended shared “we often know very early in a person’s career if they are Partner material. We should tell them and prioritise their development”.
Firms should consider how to get the best from the modern workforce. There is a trend towards a portfolio style ofcareer, as individuals want to try new areas. How can you provide varietyacross assurance, tax and consulting services to provide a more rounded career experience.
Recognition goes a long way in building loyalty and motivation. Do your best people know how you feel about them? Are you pushing your high-flyers forward and making them feel special? Is feedback and performance appraisal seen as more of a burden than a constructive and rewarding process.
Auditing has a stereotype. And the reality is that large parts of an audit are not interesting. But a lot of this boils down to the way the audit is performed.
One of most interesting elements to auditing is that there is no right answer. Two different audit teams could follow entirely different approaches to audit the same client. And both be right.
Imagine one team who roll forward all the audit work from last year and repopulate a long list of checklists. Compare that to another team who spend more time talking to the finance team, exploring data visualisations, and presenting their findings to the client’s executive team. Very different experiences for the audit team. Not necessarily any difference in the profitability of the audit. Which process would give you enjoyable work and make you want to stay or leave?
A firm’s methodology is the key component to how the audit is performed. Is your methodology and audit process challenging your team to think, develop their skills, and add value? Or is it mind-numbing…
Dated technology is frustrating. No one enjoys wasting time performing a task which technology could automate. Would you rather to dig out your maps and spend 20 minutes handwriting your directions for the drive tomorrow, or use Google Maps as you jump in the car?
Technology is so prominent in our personal lives that dated technologies have no-where to hide in the workplace. If you are clinging to inefficient desktop software which you know isn’t great, your team will hate you for it. Change isn’t easy, but would you want to work somewhere refusing to keep up with trends in the profession, which makes your life miserable? Or would you prefer to be exploring how technology could make your work more rewarding.
Technology can’t automate every boring, lower value audit task. Using centralised teams, whether on or offshore, offers the opportunity to take away from auditors the tasks of a prior era.
Traditionally, overtime was the solution to an imbalance between the level of work compared to the available resource. But such a strategy is now doomed to only compound the issue, as overworked staff simply leave. Firms need to think about work scheduling and resourcing far more carefully to avoid qualified staff heading to the exit door.
An audit leader and friend of mine in Australia, once explained his strategy on this really well. “I’ve taken off the audit team everything I believe they shouldn’t be doing. For everything automatable today, I have invested in technology. Everything else I move to a shared service centre, which I will reduce over time as technology advances, and I can increase our automation”.
There are two extremes for centralisation – tasks which are repetitive and require limited thought. And highly complex areas which audit teams work on very rarely.
Examples of centralisation which worked well in my audit career were outsourcing producing financial statements, financial statement disclosure checklists, external confirmations, scoping of group audits, and client reports design work. Are you exploring how to leverage strategic centralisation?
If you are following a traditional graduate hiring process, the only work experience your qualified staff may have is with your firm. The grass is always likely to sound greener.
Secondments can take all forms – internal secondments toother departments in your firm, client secondments, or international exchanges. All offer an opportunity for your qualified auditors to see life outside of audit.
Or you could achieve synergies between these challenges. Take a talented auditor - free them from client work and get them innovating your methodology and implementing new technologies. This can feel scary, as surely you want your best people working with your best clients, not performing “non-chargeable” work. But is it not smarter to get your best people improving your audit service for ALL clients, not just the ones they are directly working on?
My own secondment in methodology and technology innovation allowed me to have a far bigger impact in my audit role. I took what I learnt and applied it on my portfolio of clients to improve their services. My innovation secondment was the reason I didn’t leave audit far sooner. And it helped me to develop the skills I needed to achieve my longer-term career goals, founding Inflo. We’ve seen many auditors fast-track their careers by leading the implementation of Inflo for their firm.
I used to find this a real cliché. When you’re working every hour possible in the middle of busy season, having a personal life can feel quite impossible.
One panellist shared she agrees annual time contracts with her staff, so they can smooth out their hours over a 12-month period. This creates a give-and-take relationship, and flexibility.
But what are you doing culturally to ensure your team aren’t viewing work as a constraint on their personal life? Do you try to manage busier times? Do you pay overtime or give time back in quieter periods? Does your culture promote and value balance for your team?
We’ve all had audit clients who everyone dreads being booked on. The aggressive CFO. The finance team who treats the audit team badly. The audit room which is next to a blast furnace with no air conditioning (personal experience…).
Do your team a favour – sack the client. It’s difficult to rationalise any level of profit from a client that strikes dread across your team. Your team will love you for prioritising them over profit.
Your team want to be proud of where they work. They want to associate with an employer with values that are important to them.
What are you known for? How do you market yourselves? Does your website look modern and fresh, or dull and dated? What does that project? How are you approaching topics such as sustainability? Have values, communicate them, and live by them. Staff respect honesty, owning up to when you get it wrong and being transparent.
Give thought to how others view you externally, and whether your team are proud to be a part of your firm.
Firms should embrace opportunities to develop and lead in emerging issues, to remain relevant to both the workforce and clients. The modern world wants more than reliable financial information.
Audit firms have a huge part to play in areas such as sustainability, as ESG reporting advances. This represents an opportunity to shift the firm’s focus towards ahigh-growth area and align assurance work to a topic with greater relevance and purpose, drivers which commonly resonate with younger staff.
Is your firm evolving your service offering to respond to the shifts in client demand and staff motivation? Are you horizon-scanning to identify and capitalise on new opportunities?
There is no right answer to the challenges accounting firms are facing. But thinking this is a problem for the profession to resolve is misguided. It’s on every firm to make themselves as attractive of an employer as possible. That’s how we can all make working in audit more attractive.
To recap, look at these 10 areas:
1) Attractive remuneration
2) Challenge and push talent
3) Make auditing more interesting
4) Invest in technology
5) Centralisation and offshore work
6) Promote secondments
7) Balance work with life
8) Sack awful clients
9) Review your brand and profile
10) Embrace new opportunities
To hear more about retaining talent and wowing clients join us at Cognition 10-12 January 2023. Join a community of peers for six hours of high-value content over 2 days. Hear the latest trends from leaders in audit innovation. And learn new tips and tricks to improve your December year-end audits.
Whether you’re an experienced user of the Inflo platform, or you haven’t yet made the change, you’ll benefit from the wisdom of Inflo’s experienced audit team.