Talent retention: Creating supportive cultures and telling accounting's story

By Tiffany Crosby, CPA, CGMA, MBA

The far-reaching impact of the accounting profession’s talent shortage has elevated talent attraction and retention to the key priority list. Public accounting firms are declining new work or firing clients to manage workloads, reporting timeliness is slackening, and work-life balance issues are worsening as employees in corporate and public accounting work to manage the increasing demands of the job.

According to an AICPA 2021 Trends report, the number of students graduating with bachelor’s or master’s degrees in accounting decreased during the 2019-2020 academic year by 2.8% and 8.4%, respectively. Additionally, the number of new candidates seeking to take the exams to become a CPA decreased by 12.2% between 2019 and 2021, while the number of candidates anywhere within the CPA examination process declined by 12.9%. Concurrently, overall turnover rates in large accounting firms with revenues greater than $75 million increased to 19.3% in 2022 from 16.8% in 2019 per Inside Public Accounting’s 2022 Human Resources Report. During the same period, turnover in small public accounting firms with revenue less than $5 million increased to 15.2% from 12.2%. Excessive turnover has been an ongoing issue in the accounting profession, exacerbated by the post-COVID-19 talent crisis, declining enrollment in undergraduate and graduate accounting programs, and fewer candidates pursuing licensing as a CPA. As the pipeline continues to shrink and turnover increases, the accounting profession’s need to create sticky cultures that retain talent has never been greater. So, recognizing the need begs the question, what does an employer-of-choice model for the accounting profession look like?

Self-determination and empowerment theories provide a great glimpse into sticky cultures. In essence, employees want a sense of competence, autonomy, relationship, meaning and impact. Employees need work that has a clear purpose, is challenging but achievable, and aids personal growth. Fortunately, leaders do not have to work hard to meet these criteria. The accounting profession operates in a trusted business advisor position, helping leaders across all industries navigate the complexities of the business environment, making sense out of mountains of financial and non-financial data, and producing reports that serve as a bedrock of trust in a capital market system. Meaning and impact are there, provided we tell the story well. The other aspects of stickiness are also easily accessible with intentionality. Take competence for example. Competence is all about having the skills and resources necessary to perform responsibilities with excellence. Seldom do people aspire to be poor performers. However, individuals may struggle with understanding what’s required of them or may lack the requisite skills and need targeted learning and development to bridge the gap. Crafting performance development plans as a standard operating practice versus a punitive measure for underperformers establishes an expectation of continual learning and ongoing growth and acts as a value signal. Not only does the company value organizational growth, but they also value the individual’s growth and are willing to allocate organizational resources accordingly.

As painful and demanding as the COVID-19 pandemic has been, the increase in employee autonomy has been an unanticipated upside. Autonomy responds to the human need to have choice. Although many components of an accountant’s work are predefined by the role, flexibility in where and how the work is accomplished still meets the need for autonomy. The processes and technologies implemented during the pandemic’s fully or primarily remote work phase greatly increased autonomy. Workplace autonomy does have its limits though, with one key limiter being the aspect of culture. Employees need to feel connected and have a sense of belonging. As returning to the office occurs, leaders must determine how much workplace flexibility is possible and desirable for balancing individuals’ need for autonomy and relatedness. Though not the focus of this article, the organizational need for collaboration and agility also influences that decision. Leaders need to be able to tell the story of hybrid work as a series of ANDs: supporting flexibility and relationship, autonomy and collaboration, individual and team development, and individual and organizational productivity. Accounting and finance teams and firms that live out this story and can tell the story well have an advantage in the talent war.

Leadership style and team dynamics significantly influence whether employees are intrinsically motivated and engaged in the workplace. Non-supportive, impersonal, or overly stressful work environments negatively affect employees’ engagement in work-related tasks, motivation, and productivity. Employees are more likely to feel impactful and more motivated to engage when operating in supportive environments where individualized consideration is given, and employees can directly affect outcomes through their discretionary efforts. Establishing stable relationships with a hybrid team can be particularly hard and requires additional effort by team leaders to maintain frequent communications and create meaningful connections with team members at an individual and group level. Leaders can nurture a sense of relatedness by establishing social groups and scheduling open chats for the team to gather and share experiences. Additionally, leaders can connect team members to the bigger picture to provide a sense of purpose or context for the work and the value delivered to the internal or external client and to the public. Team members should be encouraged to develop themselves, take on new and interesting tasks, and be recognized and rewarded accordingly. As you can see, there is no silver bullet to addressing the retention issue. Instead, the issue comes down to an ongoing, intentional focus on creating a supportive culture and telling accounting’s story of meaning, growth, and impact repeatedly.

Tiffany Crosby, CPA, CGMA, MBA is the chief learning officer for The Ohio Society of CPAs. She can be reached at tcrosby@ohiocpa.com. Reprinted with permission from Ohio Society of CPAs.