Thursday 24 September 2015
It's all about the people - people!
Thursday 24 September 2015
Ten leading accountancy principals discuss the challenges their practices are facing
Q: What happens when you put ten accounting firm principals in a room and ask them to pinpoint their key challenges?
A: The conversation keeps coming back to people and culture.
You'd think the conversation at Macquarie's 2015 Accounting Growth Network roundtable series would be all about technology. After all, digital advances have completely shaken up the way accounting firms engage with their clients and run their practices.
Cloud-based systems, offshoring and data mining all mean staff have more time to talk to clients and really get to understand their needs – which in turn opens up new opportunities to serve those clients.
Recognising that these opportunities come from 'knowing the client', the smart firms are turning to 'big data' and analytics to get a much sharper and deeper understanding of their customers.
This high-tech, digital revolution is driving a new approach, where client-facing staff can be proactive in identifying opportunities for clients and have insightful, service-driven conversations. The result is better client satisfaction and higher margins: win-win.
But when you ask accounting principals what their biggest challenges are, technology is not their highest priority and rarely gets a mention.
It doesn't matter whether firms are focused on improving client engagement, driving growth or differentiating themselves in the market, their biggest challenge is 'people'.
It seems investing in the right technology is the easy bit. What's hard is finding – and keeping – the right people, especially if you own a small or regional business. Apparently, senior accountants in particular are rare.
So, how do you acquire and retain quality staff?
The starting point, according to our roundtable group, is to fundamentally change your staffing mix – right down to the graduate level. The next generation of accounting staff need different capability sets.
Recognising this, more firms are taking on graduates from adjacent competencies such as IT and law and then training them in basic accounting skills to fill advisory roles. In interviews, they're looking for graduates with entrepreneurial qualities – not just technical skills.
Keep a watchful eye on diversity
That's the advice from our panel. Smart accounting firm principals are aware of the likelihood, and danger, of recruiting people who 'look like you', such as hiring staff of a similar demographic. Many of them are deliberately hiring to both improve diversity of thought and reflect the cultural identity of their client base in their workforce. These leaders stress the importance of staff being able to relate to clients.
"Clients of certain cultural backgrounds often tell me what they think I want to hear instead of what I need to know. Having a senior member of staff who shares a similar background completely changed the conversation for the better," explains a senior partner.
What's hard is finding - and keeping - the right people, especially if you own a small or regional businesses
Our principals are also big fans of psychometric testing, which they say adds rigour to both hiring and merger decisions, helping to understand internal skill sets and gaps. Apparently, this type of profiling is remarkably accurate.
As one principal says, "You can pull out a test in a few years and the predicted behaviours match up." Firms are using tailored versions for client-facing and back office staff, looking for red flags that may cause cultural issues.
Many accountants are also going above and beyond 'on the job' training. Investing in professional sales training and coaching for the leadership team is becoming more common. Our panel agrees that emotional intelligence (also referred to as emotional quotient or EQ) is just as important as the intelligence quotient (IQ) - at all levels, not just the top.
It's not just about the money
Most of our principals acknowledge that engagement is just as important as remuneration. You need to make sure staff feel like they belong - that the firm really cares about their needs. For example, one regional firm is retaining quality people by offering returning mothers flexible work hours that fit in with child care.
Spending time on defining an employee value proposition is vital. Experiences, opportunities, values and culture can be just as motivating as a good salary, incentives and benefits. All these things come together in a succinct, clear employee value proposition.
Firms are also using new ways to build a sense of purpose - of working together as a team. 'Lunch and learn' sessions are popular. These 'pop-up' learning moments both increase skills and boost social interaction between different functions. Encouraging staff to spend time in relaxed communal areas also helps social interaction.
But the money helps
Finally, to make people more effective - and happier - you need to think differently about remuneration. Not everyone has sales and marketing skills. Instead, let people play to their strengths. Give technocrats KPIs around sharing their knowledge with generalists; make sure marketers have KPIs tied to winning new business.
Ultimately, it doesn't matter how much you invest in technology. If your people aren't trained, skilled, motivated or engaged, you won’t see the growth or business outcomes you were expecting.