In this kind of jobs market, the retention of finance and accounting teams should be a high priority for your firm. The employment of accountants, auditors, and other experienced finance talent is predicted to grow by 7% through 2030. Bloomberg reports “accountants are leaving jobs in record numbers…joining the broad swath of workers re-evaluating what they want from their careers.” This places businesses both large and small at risk of reporting errors that could threaten compliance and their reputations.
It takes extra effort to create the strategies for accounting and finance talent management that will overcome the candidate-driven environment where these skilled workers are so highly in demand. This blog will explore the effects of high turnover in the finance and accounting field and what your company can do right now to create retention programs that work while shoring up your new talent pipeline.
What Are the Effects of a High Turnover Rate?
Even a stoic, reliable field like finance and accounting can feel the effects of the “great resignation.” The number of graduates in the accounting field dropped by 7% since 2012, although the demand for these professionals continues to rise by the same number. In 2021 and so far in 2022, hiring simply can’t keep pace with the volume of resignations or the number of new people coming into the field.
The effects of turnover in this environment can’t be discounted; losing finance talent in this market is a heavy blow for the entire company. From increased recruitment costs hitting the bottom line to a negative impact on remaining staff, the turnover of finance and accounting talent hits a company hard.
Increased Recruitment Costs
Across the industry, companies are feeling the high costs of accounting and finance talent management, from recruiting new talent to retaining their existing teams. For example:
• Accounting consultancy Ernst & Young reports it spent more than $2 billion since 2020 to increase hiring incentives and raise the pay of their existing staff.
• PwC LLP brought on 2,000 new hires to its audit and tax division in January 2022 alone.
• Deloitte LLP and KPMG plan to invest heavily in technology that centralizes and streamlines tasks, to help their existing teams work smarter.
The regulators at the Public Company Accounting Oversight Board warned in December 2021 that the turnover of existing finance staff is an “emerging audit risk.” But what does this turnover do to the teams that are left behind when finance talent leaves the building?
Decreased Company Morale
It doesn’t matter if the staff turnover is in engineering, accounting and finance, or any other professional field, the remaining employees almost always end up taking on more work to cover the gap. This leads to an understaffed, overworked workforce in a vicious cycle that in turn may lead to more turnover. It’s demoralizing to witness the slow trickle of talent out of your organization, so that even the most reliable accountants may begin to wonder if the grass really is greener on the other side.
The pressures of being short-staffed in a precision-controlled accounting environment could lead to cut corners. Simple errors increase when the pressure is higher while productivity declines in direct correlation to declining morale. Audits could slow down even while errors increase. Bloomberg puts it this way, “Companies need qualified staff and sufficient time to get the accounting right and to ensure that internal controls work as intended” This declining productivity affects both internal and external clients, creating ripples that could become a tsunami if these problems aren’t resolved.
Retaining Top Accounting Talent Begins During the Hiring Process
Accounting and finance talent management should begin well before a candidate ever becomes an employee. Creating the kind of opportunities that attract new talent to your business can be particularly challenging if the word of your high turnover rate gets out to the public. Your goal, however, is to build your employer brand in a way that attracts top talent to the organization—fast. How is this done?
• Start with a clear, realistic, and accurate job description.
• Source and hire the top talent you can afford.
• Build your brand with an easy, intelligent job application process.
• Engage your team in the interview and hiring process.
• Take time to carefully nurture the candidate relationship.
• Increase your pay and benefits.
• Nearly 40% of candidates say the job application process lacks communication and clarity.
• Almost all—98%—of candidates say they want benefits and salary information in the job ad. salary is the number one reason employees are leaving their jobs in droves.
• But it also shows that a lack of career advancement opportunities keeps employees thwarted in their efforts to better themselves.
Investing in a positive onboarding experience is very important, but only 12% of employees say companies are getting it right. Clearly, employers are missing opportunities to engage candidates and employees. Not only are employee retention strategies in accounting and finance a major challenge this year, so is the initial process that introduces a new candidate to your company. What can you do to fix what’s broken?
Outsource Recruitment Efforts
Employee retention strategies in accounting and finance start with better partnerships. Outsourcing your recruiting frees up your HR team to focus solely on the things you know your employees want; better benefits, flexible work, career development. Working with an accounting and finance staffing agency facilitates access to a network of top performing accountants. It may be just the leg up to bring in the volume of candidates you need. There are added benefits when your HR team can run a parallel engagement track for current employees.
Pair New Hires with a Mentor
Pairing a new employee with a mentor is the bare minimum necessary to engage both the current and the fledgling worker in the success of the organization. Did you know nearly 9 of 10 workers both have a mentor and say they are happy in their jobs? Coincidence? Of course not. CNBC says “Mentorship has an outsize impact on a worker’s career across several measures.” Mentorship allows the mentor and mentee to engage in ways that improve productivity for the new worker. But these relationships are also beneficial for the existing employee seeking career advancement.
Encourage Employee Engagement
Employee engagement has long been studied and the numbers are grim; Pew Research says only about 30% of your workforce is engaged. What are employers doing wrong?
Engagement is the level of dedication and connection to a job that a person feels. Engaged employees are motivated to do their best and care about the company and the job. Engagement is often linked to employee morale and overall team productivity; the more engaged an employee is the more they’ll be working hard to reach their goals. Engaged employees are also good brand ambassadors, attracting new talent to your team. But how do accounting and finance teams increase the level of engagement in their workforce?
• Create a mission and values with your team that everyone can strive toward.
• Increase the number of company events and activities to build stronger teams.
• Offer advancement opportunities to provide stimulating, rewarding work.
• Create a transparent, frequent feedback loop with frequent rewards and perks.
• Honor and support work/life balance to help employees avoid burnout.
• Acknowledge big and small accomplishments publicly.
However, engaging your workforce begins with an incentive program. After all, we know employees resign for better pay—particularly in this market. Developing an employee incentive program for accountants may seem far off the beaten path for most traditional firms. However, we believe this effort is so important it’s worth considering.
Implement Employee Incentive Program for Accountants
Many companies create employee incentive programs to motivate their teams. Why can’t accounting firms use these models to help retain their staff? Following models that work at other organizations, an employee incentive program should include:
• Clear goals with key performance indicators (KPIs) by individual and team.
• Each goal should be linked to multiple reward levels.
• Each win should be celebrated.
Employee retention strategies in accounting and finance require higher pay and better benefits as part of their incentive program. CPA Practice Advisor reports “Pay raises are making a comeback.” They say that only 3% of companies across the U.S. say they are not planning to increase pay this year. Companies are willing to also dole out more for top performers, with bonuses averaging 16% last year or management and professional employees. To remain competitive and attract top talent, pay close attention to these numbers.
Reap the Benefits of Retaining Your Top Finance Talent
Establishing employee retention strategies in accounting and finance companies has several benefits, including:
• Reduced hiring costs for replacement workers.
• Improved employee morale.
• The ability to retain historical knowledge longer within your organization.
• Higher efficiencies in training and recruiting.
• Increased team productivity.
• Improved customer experience.
• Better corporate culture.
• More engaged workforce.
• Increased revenue.
• Higher employee engagement and satisfaction.
Building a better organization starts with better employee retention strategies. When coupled with a strong recruiting workflow, it makes for an unbeatably strong company environment that directly impacts your bottom line. Employee turnover is a huge problem today—but the reality it—is doesn’t have to be.
For Help with Accounting and Finance Talent Management Contact the Panther Group
The Panther Group are your professional recruitment specialists specializing in finance and accounting recruiting solutions for your business. We are established national accountancy recruitment consultants with a track record of success with businesses just like yours. Call on our team today to find out how we can provide the finance industry’s best talent to help you succeed.