This is the third installment of our blog series on the results of our survey on the adoption of flexible work initiatives within public accounting firms. We heard from 99 distinct firms and, in two prior blogs, we’ve shared the Survey Results and the Benefits of Anytime, Anywhere Work. In this post, we’ll explore respondent answers to a super-important question:
While nearly half (47%) have not yet made the leap to non-time-based measures, we were heartened to see that 39% of firms have implemented some performance measures for staff that are not based on time. And, another 13% are thinking about implementing measures based on something other than time, too.

When asked which non-time-based performance measures are being used, the top 10 responses we received from the 40 firm respondents who answered were:

    1. 10 (25%) indicated they measure business development and/or personal marketing activities and/or results
    2. 7 (18%) said they measure realization on jobs
    3. 6 (15%) said they measure work flow and process improvements and efficiency
    4. 5 (13%) said they measure client service/client relationships/client retention
    5. 5 (13%) said they measure people development and mentoring
    6. 4 (10%) said they measure leadership abilities/skills
    7. 4 (10%) measure quality of work product
    8. 3 (8%) measure revenue produced
    9. 3 (8%) measure technical ability
    10. 3 (8%) measure performance against the firm’s defined core competencies


Some firms shared elements of the framework they use to measure their team members including:


  • “Behavior based competencies.”
  • “Team, client and firm competencies.”
  • “Individual goals / career goals.”
  • “Dollars not hours.”
  • “Core values, 360 reviews and peer feedback.”



Other comments received related to developing performance measures based on something other than time:


  • “There needs to be a good measure of tangible and intangible firm value when evaluating employees.”
  • “Establishing productivity measures other than time has been a challenge, mostly because of skepticism by shareholders.”
  • "We don't track billable hours in our firm.”



We were surprised that of the 40 firms who responded, none mentioned using a measure of personal deliverables produced – like measuring the number of returns reviewed or financial statements prepared. For virtual and/or flexible client service personnel, we know that some firms are exploring goal setting based on production output – for individuals and/or teams.

We believe that our profession must move away from time-based measures – and that while you still have them, you should at least make the time-based measures more meaningful. Our “must do” list for doing so includes:

  • Stop measuring charge hours only (which we still see in firms). All this does is test whether someone can enter time into your time entry system. Charge hours measures must be accompanied by realization measures but remember, realization can be manipulated by under-investing in training, having the wrong level person do the work and more.
  • Consider measuring revenue collected as a primary measure versus hours billed. Get your people thinking about the revenue they control and their ability to directly affect the top-line. One respondent shared that they measure on, “Pure dollars, not hours. We do not care about the hours. If you are efficient with less time, you are rewarded, if it takes you longer to do same job, not rewarded….”
  • Be sure to establish specific measureable goals for each person, regardless of the element being measured or whether they are on a virtual or flexible work program. Our profession loves time-based measures because you can print them from the system – but that doesn’t mean they’re accurate or tell the whole story. To set good, solid, trusted measures, follow my partner Jack’s advice given in his blog Success: Do You Have The Skills?
  • Measure valued activities like developing people, nurturing clients and/or developing new business. If you don’t measure these activities, people will not engage in them. Examples of just a few ways to establish measures for these areas include:
    • Business Development activity sample goal – “Conduct an average of 2 referral source or prospect meetings per month, or 24 meetings in total by XX/XX/XX; track these meetings and their outcomes.”
    • Business Development results sample goal – “Bring in X new audit clients from contacts generated by me worth $XX, XXX by XX/XX/XX.”
    • Client Relationship activity sample goal – “Hold strategic client account planning meetings for my top 15 clients, completing three specific actions or outcomes determined for each client by XX/XX/XX.”
    • People Development activity sample goal – “Mentor PERSON’S NAME to prepare her to move to the role of Manager including taking her to 2 referral source meetings, 2 sales meetings and including her in 2 performance conversations with staff by XX/XX/XX.”

In our next blog in this series, scheduled to be posted December 17, we’ll explore the advice our respondents had for those moving down the path of an anytime, anywhere work culture. Until then, what non-time-based measures is your firm using? Please contribute to this conversation and share them!