Innovation requires leadership. Look at the CPA firm of the future
The Great Resignation is making it even harder for CPA firms to attract and retain talent. In recent years, it’s become obvious that the CPA firm business model is increasingly challenging. The pipeline of qualified new hires is shrinking. Younger CPAs aren’t as enamored with the partner path or the money. This is not recent news. They want work-life balance.
Big firms with substantial resources appear able to keep it going. They continue to feed the beast, attracting the top entry-level talent. They offer premium compensation packages in a continuing, albeit oftentimes ineffective, effort to retain people. To date, they’ve been able to pass on increasing costs to their clients as regulatory requirements continue to mandate more CPA involvement in their affairs.
It’s the smaller firms that are getting squeezed. They attract big firm refugees with offers of improved quality of life while hoping to compete against the lucrative salaries. They can’t just keep paying more and charging customers more. Their clients are less Wall Street and more Main Street.
Is there a solution?
As most might suspect, it’s technology. But all technology isn’t created equal. CPA firms are staffed by people providing services to people. A technology solution must therefore be user friendly and appeal to the changing demographic. It has to feel good.
The big CPA firms have for years spent millions on technology. At this point, some of their solutions are antiquated as they were on the leading edge of the adoption curve. Technology doesn’t always age well, and these firms are first and foremost CPA firms, not software development companies. As behavioral matters come increasingly into focus, these firms are slow to react.
Software providers appear to be focusing on the technical stuff, like making complex computations, keeping track of files, and filing reports and returns. Massive platform implementations costing millions are implemented to ensure data moves effortlessly from computer to computer. The focus is on the big dollars.
Much like the consolidation in the CPA firm world, there’s consolidation in the software provider world. As startup software companies develop new applications for accountants, they’re gobbled up by the major software publishers. They’re integrated into the publisher’s suite of products and marketed to the firms as end-to-end solutions. With few alternatives, firms buy.
So, where does this leave the aspiring CPA who’s searching for work-life balance for the entrepreneurial CPA firm? Searching social media, it’s apparent firms try to distinguish themselves from their competition by making aspirational claims. They post pictures of employees with families and pets. They brag about awards and promotions. Yet their people still leave.
Despite all the braggadocio, because they aren’t addressing the root causes of the problem, these firms continue to suffer from the same ills as their bigger brethren. They cannot continue to carry on business the way they always have and expect a different result. They must innovate, and not just around the edges.
Innovation requires leadership. Leaders listen to employees and clients. They demand exceptional technology solutions and shun the one-size-fits-all solutions implemented by their competition. They understand differentiation.
The CPA firm of the future is one that adopts technology that is more focused on human behavior and less focused on computing. It’s not just about data. Software needs to make work more interesting, not just more work. Technology can play a huge role in employee satisfaction and, ultimately, firm success by providing smart professionals with a voice.
Automation is imperative to a firm’s success. But CPA firms are first and foremost about professional services and the very important people who provide and receive those services.
