Employee Retention

The State of Engagement in Public Accounting Firms and Why It Matters

Steven Johnson, DBA, CPA, CITP, and Byron Pike, PhD, CPA

One of the most challenging issues facing leaders in the public accounting profession is the high rate of employee turnover. A recent survey finds that turnover in large CPA firms (those with revenues in excess of $75 million) is 17%, and one in every six firms experiences annual turnover of 20% or greater (Inside Public Accounting National Benchmarking Report, Platt Consulting Group, 2015). Given that the direct costs associated with replacing a professional staff member can be as much as 50%–60% of the employee's annual salary, there is little wonder why firms are continuously searching for ways to keep high-quality employees (Terence Mitchell, Brooks Holtom, and Thomas Lee, “How to Keep Your Best Employees: Developing an Effective Retention Policy,” Academy of Management Executive, November 2001, http://bit.ly/2yUU2Zv).