“If you build it, they will come” …and maybe they will even stay and “go the distance.”
It’s summertime. The 2019 baseball season is in full throttle and the All-Star Game is already two weeks in the past. I recently watched Field of Dreams again for the umpteenth time. I watch it every summer when its rainy or too hot to be outside. It’s one of those movies that never grows old because of my love of the Chicago White Sox, my Father, and the game Dad introduced to me as a child. “Hey…Dad, you wanna have a catch?” tugs at my heart and emotions every single time I see that scene.
And, while baseball and Field of Dreams are timeless classics of the American experience, one of the timeliest subjects for professional services firm owners is retention of good people.
It’s no secret that the most valuable assets to a professional services firm are its people. The intellectual capital that occupies space in your office each day is what a firm is all about. A recent business journal article siting a Gallup, Inc. team states “historical workplace information and roundtable discussions with chief human resources officers (CHROs) and economists to better understand how to maximize the potential of today’s tech-connected, multi-generational workplace. Whether you’re a small organization or a multi-national, the research shows that the real job of managers involves escalating employee engagement.”
A CPA firm competes for clients based on the quality and capabilities of its people. A firm makes money when its people are focused, accountable, skilled and able to efficiently serve clients. A stable firm accomplishes succession objectives and covers partner retirement obligations by transferring ownership to people who advance their careers along a clearly understood career continuum from staff to partner. Sound governance propagates a trusting environment where senior partners are able to retire with confidence that the firm will continue to sustain and systematically meet its retirement obligations.
Quality people are attracted to a firm that delivers on its promises to clients and staff alike. Firm governance provides structure for people and incorporates a human resources and personnel management function that produces a culture of professional growth.
Another recent Gallup report states that an overwhelming 70% of American employees are not engaged at work. Employee engagement is driven by many factors and affected by governance, leadership’s tone at the top, and cultural values. A happy employee, manager, or partner is an engaged member of the team.
Significant dollars and time are invested to recruit, hire, train, and develop employees and partners. The cost of losing people can range from tens of thousands of dollars to as much as 2.0x an employee’s annual salary. Therefore, it follows that retention of people is a foundational element of the firm’s ability to grow and achieve high performance. Sustainable and transferable firms deploy a governance model and promote a culture that attracts, engages and retains the best, brightest and most talented people.
Imagine your firm as the envy of employee retention in your industry. And, imagine one of your staff approaching you and asking, “Is this Heaven?” Perhaps, before you think to answer in the words of Ray Kinsella “No, it’s Iowa,” you might just answer “No, it’s a firm with an effectively operating governance structure.”
About the author
Dan McMahon is the Founder and Managing Partner of Integrated Growth Advisors. He advises clients in a variety of industries—including the public accounting profession—on firm governance, sustainability, generational transferability, and building increased equity valuation. Dan also provides mergers and acquisitions advisory services to business owners including the leaders of CPA firms.