The Great Resignation has brought unique challenges for organizations across the globe. In 2022, employee attrition rates are unexpectedly high, and even seasoned CPAs and accounting firms are struggling to retain valuable bookkeeping talent. And rumor has it that it may get worse.
Since CPAs and accounting firms across the globe are struggling with a high attrition rate, we decided to share some tips and hacks on reducing the same in 2022. Whether you are a leading accounting firm or a new CPA with a small team, our recommendations will help you retain accounting talent and improve employee engagement.
But before talking about them, let’s understand the meaning of attrition rate first!
What is Employee Attrition Rate?
The employee attrition rate is defined as the percentage of employees who leave the organization in a specific period. Also called churn rate, it’s about the permanent or temporary loss of valuable human resources over a period of time, leading to unforeseen changes and even financial losses.
An organization has a high attrition rate when more and more employees resign, are dismissed, move internally, retire, or be terminated while the human resources department struggles with filling positions. The attrition rate is calculated by dividing the number of employees who left the company by the average number of employees over a specific period of time (annually, monthly, or quarterly).
How to Reduce Attrition Rate in CPA firms?
The following tips and ideas are helping top accounting firms retain employees and check high attrition rates:
#1 Hire the right accounting talent
By hiring the right people, you not only gain access to the right accounting, finance, and tech talent but also move closer to a lower attrition rate. Putting in place a comprehensive hiring process will ensure that the people with the right mindset join the team. Use predictive hiring technologies and assessments to identify the right talent.
Don’t want to use tech? Consider the following tips while hiring:
- Check career commitment and mindset
- Test learning and analytical skills
- Look whether the candidate has social skills to get along with others, especially with current employees and managers
- Run pre-employment screening
- Check for company culture fit
#2 Offer competitive compensation and benefits
In a Paychex survey, 70% of respondents said that they left their previous position due to low salaries. Another study from Business Insider suggests that more than 70% of employees would consider leaving their jobs for the right offer, even if they are not in pursuit of a new position at the moment.
Truth be told, time is money. Hiring new talent is really time-consuming and challenging in 2022. Industry experts believe that it is better for CPAs and accounting firms to retain existing staff (trained and ready-to-deliver) rather than bring in younger talent.
In short, put a competitive compensation policy in place. Benefits like insurance, performance bonuses, paid sick leaves, wellness programs, paid vacations, and perks go a long way in securing the loyalty of employees and bringing down attrition rates.
Flexibility is another benefit that CPA firms can offer to their employees. Allowing them to work from home a few days a month will greatly help them find work-life balance and cherish their position in your organization.
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#3 Promote employee engagement
According to Gallup’s State of the Global Workplace, 85% of employees are not engaged in the workplace because they either view their workplace negatively or do the bare minimum to pull through the day. Although 33% of US employees are engaged at work (double the global average rate), the figure can still be improved further.
In fact, the rate of unplanned absences (time off due to illness, injury, or family) has increased a lot in the USA. Do you know what is the biggest reason behind the rise in these numbers? Lack of employee engagement!
In order to build a successful accounting practice, top CPA firms work on employee engagement and wellbeing. Engaged workers tend to perform better and can help the organization achieve quarterly growth targets.
Consider the following tips in order to increase employee engagement and decrease the high attrition rate:
- Model your core values and emphasize your firm’s mission
- Prioritize taking monthly feedback from employees
- Focus on employees’ physical and mental health
- Recognize top performers and reward them for their achievements
- Conduct employee engagement surveys frequently
- Plan team activities
- Offer professional development opportunities and crave out career paths for employees
- Offer training programs and leadership development seminars to better equip managers for their roles.
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#4 Allow lateral career move
Some accounting professionals leave CPA firms because they aren’t certain whether they want to progress upward in the same field. Make sure to talk with such employees regarding their career goals. Some accountants may have impressive business development, client support, and legal skills.
Be open to lateral career moves if it means retaining a talented professional who wants to learn a new skill set, switch departments, forge a new career path or have a better work-life balance without leaving your company.
By scouting talent internally, CPA firms can boost employee morale and lower attrition rate hugely. Some CPA firms think that this can leave them with fewer resources to manage seasonal workflow or ongoing projects. Well, outsourced accounting and bookkeeping services can surely come in handy while the HR department engages new talent.
#5 Give recognition to employees
Remember we told you to recognize top performers and reward them for their achievements? Well, this tip to lower the attrition rate for your CPA firm is all about it! Track employee achievements and progress over the length and breadth of the employee cycle.
Formalize a recognition program in your accounting organization to celebrate micro-moments related to quality work, achievements, or client support. Offer perks like paid time off, holiday rewards, and bonuses.
Top CPA firms in the United States also use technology and social media to talk about their employees and engage with them!
#6 Investigate involuntary termination reasons
Involuntary termination takes place when an employer relieves an employee from the position either because of poor performance, attendance problems, economic downturn, violent behavior, or employee policy violations.
There are times when you have no other choice but to let employees go. But if your company has a high involuntary termination rate, take quick action. Why? Because firing and hiring is extremely capital-intensive and it leads to productivity loss and decreased employee morale.
Look into involuntary termination reasons and try to figure out where your CPA firm went wrong. Figure out if there is a problem with your recruitment process, feedback system, or company culture. By leveraging the data about the involuntary termination rate and reasons, you can identify areas of improvement.
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#7 Show the big picture
Our list of tips to reduce the high attrition rate will be considered incomplete without talking about this! Employees must share a common goal and vision. Top CPA firms in the United States make consistent efforts to show their employees the big picture and keep them motivated.
Make certain that your CPA firm’s vision is inspiring employees to stay engaged and do better on a daily basis. If your company lacks the vision, more and more employees will show disengagement, resulting in unanticipated turnover and a high attrition rate.
How to reduce attrition rate
The above are useful tips for reducing the high attrition rate in 2022. Always keep in mind that the success of your CPA or accounting firm greatly depends on your team. By implementing the aforementioned tips and providing an optimistic work environment, top CPA firms in the United States are able to retain employees and maintain lower attrition rates.
That said, maintaining a big in-house accounting team is challenging even with a low attrition rate. Consider partnering with offshore accounting outsourcing firms like Finsmart Accounting to bring down recurring business costs without disrupting workflow.
Got any queries to ask? Send them to firstname.lastname@example.org and have them answered by our team of experts.
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Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.