4 ways accounting firms can appeal to new professionals
Today’s new accounting and tax professionals have entered the profession in a completely different world than their predecessors. The COVID-19 pandemic, the war in Ukraine, and economic earthquakes of the last few years have impacted not only their priorities but how they want to work.
In the coming years, as younger professionals increasingly enter the job market, they will likely see further transformation of both the role and importance of the tax and accounting industry.
Just within the last few years alone, individuals have been enduring significant mental strain. In addition to the tragic loss of lives due to the pandemic, people have dealt with feelings of isolation amid lockdowns and financial uncertainties as many businesses struggled to stay afloat.
In fact, a study conducted by The Harris Poll on behalf of the American Psychological Association (APA) found that 61% of U.S. adults surveyed agreed that the pandemic has made them rethink how they were living their lives. And around half (49%) said that the pandemic has made planning for their future feel impossible.
Younger adults were more likely to feel day-to-day decisions and major life decisions are more stressful now compared with before the coronavirus pandemic and younger generations also reported generally high stress levels, according to the APA findings.
As if this wasn’t enough, the war in Ukraine continues to weaken the global economy, as inflation and a brutal housing market further fuel stress levels.
So, how are new professionals in the accounting industry coping? What is keeping them awake at night and what are they looking for in an employer in today’s challenging environment?
Seeking answers, Thomson Reuters surveyed more than 100 practitioners who are currently employed as accountants. Nearly all (99%) of the respondents are CPAs, licensed as of 2017.
Overall, the findings revealed employees who are focused on security and flexibility, which directly reflects the instability experienced within the last few years, and a recognition that things can and should be done differently.
When boiling down the findings, four key employer attributes rose to the surface: financial stability, work-life balance, long-term stability, and flexibility. This white paper will explore each of these attributes and how firms can better compete in a tough job market.
As you read through the findings, think about changes, whether big or small, that your firm can make to better attract talent today and tomorrow as the profession continues to face change.
4 key employer attributes
Among the stressors, it’s the economic worries that are most likely to keep new professionals awake at night. In fact, Thomson Reuters research found that financial stability is the main career goal among today’s new practitioners (94%), while 93% said a competitive salary is what matters most in an employer.
Firms looking to successfully attract and retain new professionals must ensure they are keeping pace with salary expectations. This, of course, can be a challenge for some firms, especially smaller practices with tighter budgets.
For those firms struggling to compete in today’s competitive job market, it is important to ensure no money is being left on the table. In other words, it may be time to increase prices, rethink the firm’s pricing model — value-based vs. hourly billing, etc. — or expand client services to include more higher-margin, higher-value offerings.
Keep in mind that clients will be more willing to pay a premium for services if they understand the value being provided. Know your firm’s value and communicate your firm’s value. Ensure staff are getting paid for the value they provide. This will ultimately lead to greater profitability for the firm and more money for associates.
Among survey respondents in metro areas, the majority said they were making $80,000 to $99,000. In micro areas — areas with 10,000 to 50,000 people — new graduates reported making between $50,000 and $69,000.
Thomson Reuters research also found that, among new practitioners in metro areas with two to three years’ experience, most are making more than $80,000. Among new practitioners with four to five years of experience, a majority (36%) are making more than $100,000 in metro areas, but only $40,000 to $59,000 in micro areas, and $60,000 to $69,000 in rural areas — although data for rural areas was extremely limited.
Underscoring this finding, research by Robert Half, human resource consulting firm, found that 43% of finance and accounting employees surveyed said they were actively searching for a new role or planned to by the end of the year. One of the top reasons why: to earn a higher salary.
The desire for more financial stability is easy to understand when you consider the economic headwinds and uncertainties that have left many reeling. Just as people began learning how to deal with COVID-19, events such as inflation, the war in Ukraine, and a decline in housing affordability reared their ugly heads.
As noted in a recent report by global consultancy Bain & Company, “Younger workers have also been exposed to broader turbulence over the past decade, including greater political polarization, geopolitical tensions, and concerns about climate change, not to mention a pandemic. The lives of younger generations are characterized by a far higher degree of ambiguity and uncertainty — and they simply haven’t been educated on how to cope with it.”
The Bain & Company report went on to state, “The odds of achieving absolute upward mobility — earning more than one’s parents — are the lowest they have been in the U.S. for any generation since World War II. For the Silent Generation, about 90% of workers could expect to earn more than their parents, with the figure even higher for all but the wealthiest families. For Generation X, this figure had fallen to about 50%, with the biggest decline in the middle class. The emerging data for Generation Y suggests the picture is worsening. This trend is consistent across the West, with absolute upward mobility at levels equal to or below the lowest on record, which stretches back to the beginning of the 20th century.”
Today’s new professionals want to work for a firm where leaders demonstrate that they care about their employees and encourage a greater work-life balance. In fact, when considering what matters most to new practitioners in an employer, 85% of respondents said it is prioritizing work-life balance, according to Thomson Reuters research.
Employees have long expressed a desire for a greater work-life balance. The pandemic, however, further fueled the issue and really prompted people to rethink their goals and aspirations. Accounting professionals are no exception.
Given this, it is especially important that today’s firms leverage solutions that drive automation, enhance efficiencies, and improve collaboration among both staff and clients. This enables staff to work smarter and faster while providing them the ability to achieve the work-life balance they desire.
According to the research, new practitioners said they currently average 46.1 hours per week working, highest among business leaders (48.6%) and employees at non-accounting firms (48.1%).
Respondents said they would like to average 40.6 hours per week working, a reduction of about 12%. Practitioners at accounting firms with under 30 accountants were the most likely to say they want to work less than 40 hours per week (62%).
New professionals want to work for a firm that can provide long-term job stability and is invested in helping them grow professionally and achieve their career goals. In fact, according to Thomson Reuters research, 75% of new practitioners said long-term job stability is a top career goal.
This is good news for firms. However, it is important that firms have the resources and tools in place to empower associates and foster a culture of professional growth and development.
Thomson Reuters findings further underscored earlier ACCA research that found the top two reasons young professionals — across all sectors — remained with an employer were:
- Career progression opportunities (59%)
- The opportunity to learn and develop skills (58%)
Take, for example, tax research. Firms can spend less time on tax research — while empowering new professionals to efficiently find their own answers and free up senior staff — by implementing a robust tax research tool. This means leveraging a solution that offers intuitive and predictive search capabilities, suggests relevant expert insights and analysis, and is powered by the latest in artificial intelligence, cognitive computing, and machine-learning technologies.
While such tools can certainly play a role in staff development and efficiency, it is also important that firms rethink their approach to learning by utilizing firm-wide curriculums and embracing blended learning formats — in-house training, conferences, webinars, and online self-study — for greater flexibility.
The reality is that firms that overlook the importance of a learning strategy risk losing those practitioners who demand growth opportunities. Plus, if competency or effective communication is lacking in a firm’s professionals, firms also risk losing clients to the competition.
As noted by HSI, a provider of compliance and professional development training, consider the following outline when creating an employee training and development program:
- Recognize goals
- Identify competencies
- Perform a gap analysis
- Interview employees
- Offer formal training
- Add coaching and mentoring
- Allow self-directed learning
Flexible hours and location
For many of today’s new professionals, flexible hours and location rise to the top in terms of importance — 75% and 62%, respectively — according to Thomson Reuters research. This comes as little surprise given their strong desire for a greater work-life balance and the rise of more remote or hybrid work environments due to the pandemic.
The findings revealed the following:
- Two out of three new practitioners said they were currently working in a hybrid (50%) or remote (16%) work environment
- Nearly three out of four said they would prefer to work remotely two to three days a week (40%) or four to five days a week (32%)
The survey also revealed that most new practitioners were not interested in relocating for another job opportunity. Only 30% of new practitioners said they were even somewhat willing to move more than 50 miles away and even fewer (23%) were willing to relocate to another state.
Newer licensees (31%) were slightly more likely than older licenses (17%) to say they’d be at least somewhat willing to move out of state for another job opportunity. Enthusiasm was also slightly higher among employees at larger accounting firms (32%) and non-accounting firms (28%).
Clearly, relocating for another job opportunity is not ideal for the majority of practitioners. As more firms have shifted to remote or hybrid work environments, the ability to tear down geographic borders with cloud-based technology solutions that enable anywhere access has become even more evident.
Now, nearly three years since the outbreak of COVID-19, many firms would be wise to reflect on the challenges and successes they’ve encountered and — if they haven’t done so already — fine tune their technology, workflow processes, and operating model, etc., to effectively compete.
Separate research suggests that firms face the risk of losing talent if they are not open to greater remote work flexibility. As noted earlier, 2022 research by Robert Half found that 43% of finance and accounting employees surveyed said they are actively searching for a new role or plan to by the end of the year. A desire for remote work flexibility ranked as among the top reasons why, in addition to a higher salary as mentioned earlier.
There’s no doubt that new accounting and tax professionals have entered the profession in a completely different world than their predecessors. This has impacted not only their priorities but how they want to work.
In order to remain competitive in a challenging job market, firms must find ways to appeal to today’s new professionals who are increasingly focused on security and flexibility. More specifically, they are seeking financial stability, work-life balance, long-term stability, and flexible hours and location.
Firms that overlook the importance of these attributes risk losing top talent to rivals who are heeding the call. Where does your firm rank?