Industry News

Industry News

Industry News Firm Culture May Conflict With the Profession's Long-Term Goals

By Daniel Hood

Accounting firms may need to ask themselves some hard questions about their cultures if they hope to attract and retain the staff they need in the future, according to a new report from the Illinois CPA Society.

The report, “The Culture Conflicts: Are Longstanding Business Practices Damaging the Accounting and Finance Profession,” suggests that the strenuous efforts firms are making to be more attractive workplaces are possibly being undermined by some unexamined elements of their culture – in particular, a focus on the billable hour and an untenable approach to workloads.

“When we talk to firms, we continue to hear about retention of staff and the need for staff being a major issue that they deal with on a regular basis,” ICPAS chief executive Todd Shapiro told Accounting Today. “We started talking about it: ‘Why do we continue to have this problem?’ What piqued our interest was that we see all of these practices that are meant to retain staff – PTO, dress for your day policies, work anytime/anywhere, and so on – they’re all meant to retain staff, and yet we still see so much turnover occurring.”

The simple fact is that, while staff were once willing to work long hours in return for high pay (with the corollary expectation of a significant amount of employee burnout), that tradeoff is growing less and less acceptable.

“What we’re hearing from younger and older staff is that they want off the treadmill,” Shapiro explained. “They don’t want to work until 11 at night – and it’s not just about busy season, because busy season runs 13 months of the year.”

The profession seems to have reached a point where money is failing as an incentive to overwork, as are perks such as office amenities, such as foosball tables and the like. “All these things we do to make working longer more pleasant” are ignoring a fundamental question, Shapiro said. “Is the business model in conflict with the goal of retaining staff?”

The Question of The Future

This is particularly important because retention is only going to become more important, Shapiro warned.

In the short term, technology can help ease staffing pressure by automating work and creating efficiencies, but in the long run, it will actually make retention even more important, as robotics and artificial intelligence eliminate entry-level jobs.

Shapiro recalled speaking with the chief operating officer of a large firm who explained that hiring fewer entry-level staff made it all the more critical for the firm to retain those it did hire, because it won’t be able to do without or replace their expertise. The solution? “The COO said, ‘Pay them more.’ But will money be the thing that makes them stay?”

More and more, the answer seems to be that it often won’t – but the solution of lowering workloads runs up against the culture of the profession.

Shapiro shared a story from a Big Four partner: “‘We had a partner who had decided they couldn’t do all the travel and all the hours - they needed balance. The firm said you can do that, but you’re going to have a reduction in your compensation of x.’ So it came down to money.”

Given the importance of the billable hour to accounting firms and in the profession’s culture, this is hardly a surprise.

“The focus is on the billable hour,” Shapiro said, “which is only a problem if you want to have a higher retention and higher attraction of staff. It affects all different facets – if you have to work on a Saturday or Sunday, if you’re on call 24/7, and so on. ‘Work anytime and anywhere’ means you can work all the time, everywhere.”

Between them, the billable hour and technology have blurred the line between personal and work, he continued: “One never starts and one never stops – you’re always doing both.”

If firms really want to get ahead on retention, they’ll need to examine the cultures that underlie all this – the often unspoken assumptions about what staff needs to do.

“Culture is all the normative behaviors that are expected and accepted in an organization,” Shapiro said. “It’s not defined so much as that’s just what it is. It’s how it’s always been – the longer hours someone works, the fewer staff we need.”

The ability of foosball tables and higher pay to make that palatable may only last for so long, and then firms will need ask themselves some important questions.

“We’re not saying, ‘Something’s wrong’ or that the culture is wrong,” Shapiro noted. “It’s about asking the question, ‘Is this what you want?’ If it is, then accept it and embrace it. There’s no right or wrong culture – it all comes down to what people want. But also look five years in the future as retention becomes more and more important - do we have the culture that takes care of that? Is paying staff more going to be the answer?”

“We just think people should ask the questions and embrace the answer,” Shapiro concluded.

The report, which also includes a focus on how cultural issues may be impeding the role of women in the profession, is available online.

Source: Accounting Today, May 10, 2018 (https://www.accountingtoday.com/news/icpas-report-suggests-accounting-firm-culture-needs-a-re-examination)