Practice Management Committees Discuss Staffing Needs

By Anthony J. Mancuso, CPA

Large, medium, and small public accounting firms face the same staffing issues--finding, hiring, and retaining professional staff. These common concerns were apparent from discussions at a joint meeting of the Large-Sized and Medium-Sized Firm Practice Management committees on October 22, and a meeting of the Small-Sized Firm Practice Management Committee on October 26.

The latest edition of the AICPA's Management of an Accounting Practice Committee poll identified hiring and retaining quality staff as the number one practice management issue for CPA firms among the top five MAP issues for 1998, and the staffing issue has retained the number one spot for the last several years.

In light of this concern, the NYSSCPA's practice management committees discussed various factors impacting staffing in the profession. Employers compete aggressively to hire and keep qualified employees. Firms find it difficult to find and retain experienced staff. Executive search professionals, other CPA firms, and the corporate sector actively solicit staff and make lucrative employment offers.

Studies indicate that the number of accounting graduates remained relatively steady during the past several years, while the demand in the marketplace continues to increase. Researchers have suggested that 1999 overall pay increases could reach their highest level in six years, fueled in large part by a rise in bonuses, stock options, and other variable compensation forms now extended to all levels of the workforce. In public accounting, some firms are looking to new strategies and creative practices to compete for and reward staff.

Among the topics discussed by the Society's committees were types of incentives used. Some firms now focus more on interpersonal issues to create an environment that encourages staff to stay.

"We put a mentoring program in place to enhance the development of our staff," said Bernard M. Holand, a member of the Medium-Sized Firms Practice Management Committee.

Recognizing that professional staff often feel that rewards in public accounting are reserved for partners, with such views reinforcing the one-track, partner-focused career path, some firms have begun to share financial information, including revealing partners' salary ranges. The idea is that if professionals moving toward partnership have a greater sense of the rewards, the potential future monetary success will act as an incentive.

The committees expressed concern about competition from other financial service companies, and members discussed the possible need to increment salary levels to meet the range of competitors outside public accounting. Many CPAs felt, however, that this may force firms to need higher revenue bases to offset the higher pay scale.

Discussions also centered on the image of the CPA and why the profession is not able to attract new candidates.

"The level of perception needs to be raised in order to attract future candidates into the accounting profession," said Edgar G. Zeitlin, a member of the Small-Sized Firms Practice Management Committee.

Dissatisfaction with the nature of public accounting work, discontent with the limits of the partnership career path, and less tolerance for the long hours and excessive stress experienced in public accounting are some reasons professional staff seem to be leaving.

Jeffrey L. Saltzer (Nassau), a member of the Medium-Sized Firms Practice Management Committee, summed up the frustrations of many of the discussion participants.

"New candidates launch their career in public accounting to gain a multitude of experiences, and after attaining their CPA experience requirements, they flee public accounting," he said.

In a sample of attendees at the 1995 AICPA Industry Conference, professional staff said they have deserted public accounting generally because of an inability to make more positive, strategic input into the direction of the organization; that is, they did not feel that they were an integral part of the organization and business-wide responsibilities. Responding to this sentiment, the Society committees concluded that accounting firms need to be positive and become more innovative to attract professional staff.

For more information about practice management committee activities, contact co-chairs of the Large-Sized and Medium-Sized Firms Practice Management committees Michael Gaines (Nassau) at (212) 697-6130 or mgaines@aol.com, and Arnold A. Gruber (Nassau) at (516) 466-6550; or contact Lawrence Milowsky (Nassau), chair of the Small-Sized Firms Practice Management Committee, at (212) 868-4244. *

Large-Sized and Medium-Sized Firms Practice Management Committee members Felix Tornatore (left) and Bernard Holand