As firms help their young professional staff gain expertise and knowledge about the profession, our research shows that they may be looking for the door instead of the next step up the ladder.
Recruiting college graduates is a challenge unto itself, but once these young people are hired, its critical to keep them happy, involved, rewarded and able to progress in a career they consider meaningful and impactful.
In a survey of 723 young CPA firm professionals, aged 21-40, INSIDE Public Accounting and ConvergenceCoaching found some troublesome signals that young professionals are becoming less enamored with the profession as they age. While the majority surveyed indicated that they feel valued and appreciated, the numbers dip with age and experience. The results can be found in the research study, “The Road to Retention: Motivators and Drivers for Young Public Accounting Professionals.”
Respondents were broken into two groups: Millennials aged 21-33 and Generation Xers aged 34-40. Consider these differences between the two age groups:
- Millennials felt more positive about firm leaders. When 21- to 33-year-olds were asked to list the top attributes of their current firms, “I respect my firm’s management” was No. 1. The 34- to 40-year-olds ranked respect farther down the list, with “I enjoy the clients I serve” as No. 1.
- In the Millennials’ list of top five firm attributes, respondents included “I feel valued and appreciated at my firm,” and “My skills are getting better as a result of my firm’s investment in my learning.” Interestingly, these attributes did not make the top five list for Gen-Xers.
- According to Millennials, the No. 1 firm weakness was involving team members in internal decisions that affect them. Gen-Xers also found the lack of involvement in decision-making to be a concern, but the No. 1 weakness was the need for ”an effective mentoring program for all staff.”
According to survey respondents, as staff age, they feel less valued and appreciated, lose some respect for firm leaders and don’t believe the firm is investing in their professional development.
The good news is 34- to 40-year-olds enjoy the responsibility of client work and appreciate autonomy they are afforded, survey results show. Three of the top five firm strengths were: “I play an important role in working with clients,” “I enjoy the clients I serve,” and “My firm allows me to work in a way that I believe is most productive.” Also, the majority of the Gen X respondents, 58%, expressed their desire to join the ranks of partner.
With that being said, IPA’s just-launched 2016 National Benchmarking Report, which compiled data from more than 500 participating firms, suggests that while young professionals may desire leadership roles, they’re looking elsewhere to find them.
IPA looked at the percentages of staff at various levels, comparing this year to 2015. Among firms in the IPA 100, the largest firms in the nation, the percentage of professionals with 0 to 2 years of experience grew by 8% of the total. At the same time, the 6- to 8-year staff percentage shrunk by 5.5% of the total share, and staff with 9 or more years’ experience shrunk by 2.5% of the total.
In smaller firms, the demographic shift can also be seen, as the proportion of staff with 6-8 years of experience shrunk there as well, by an average of 7% for firms of $5 million-$15 million.
This information from the 2016 IPA National Benchmarking Report matches with turnover statistics that reflect that experienced staff, of three years or more, are leaving public accounting.
How can the profession keep experienced staff in public accounting? The Road to Retention provides some ideas:
- Explain The Impact of Their Contribution – Help staff make the connection between their day-to-day work and the overall goals of the firm and the goals of the clients the firm serves. Provide insight into how their piece of the puzzle adds value not only to the firm but to clients, co-workers and the profession, and show appreciation for their contribution.
- Share Big-Picture Information – The Road to Retention Report shows that young staff want open and frequent communication, including transparency on firm expectations of staff, the path to partnership, partner success stories, the firm’s overall vision and strategy for growth, and key firm metrics that matter to a professional in the accounting field. They are the future leaders, share early and trust that they will engage. One tool for discussing firm metrics is INSIDE Public Accounting’s National Benchmarking Report, which allows firms to compare their performance data against similar-sized firms around the country as well as IPA Best of the Best firms.
- Continue to Invest in Professional Development and Expand Offerings – IPA’s Best of the Best Firms, those with excellent financial and operational performance, pour more time, money and effort into high-quality training programs for staff of ALL levels. More than 80% of the 2016 Best of the Best firms have a formal mentoring program, a need identified by Gen-Xers.
- Improve Communications About Performance – Generation Xers need leaders to be intentional about offering thoughtful input on their work performance, not just the “great job” feedback. Generation Xers would like to receive feedback quarterly, the survey indicated, while Millennials want monthly feedback.
- Make an Effort to Keep Work/Life Balance Issues Top of Mind – Remember that it is the No. 1 factor that determines whether young professionals will stay in public accounting, according to Road to Retention. Continue thinking of new ways to increase efficiency and flexibility so they can work in the ways they feel are most productive. Trust your staff, and ask young professionals to suggest ways to possibly make smaller changes along the way.
Learn more about the differences in the next generation perspectives by age in our Road to Retention report.