Fighting the Talent War and Winning!

Tom Wheelwright

Are you short on talent? You aren’t alone… and you haven’t been for some time. The talent pool is a puddle. And for those of us in accounting and finance, we know we’re swimming at the shallow end. To make matters worse, a 6.2 million worker shortfall is projected by fall of 20061. Although the national unemployment rate is a measly 4.7 percent, in 2006 the unemployment rate for professionals in management and accounting and financial services is 2.2 percent2! By 2008 there will be 151 million jobs in the U.S., but only 141 million people in the workforce. Unemployment for college graduates is only 2.1 percent3. And one-third of the federal workforce will be retiring by 20084. Did you know that 10,000 people retire every day?

And now that finding talent is harder than ever, we’re realizing that retaining that talent is even harder. Workers are leaving employers more often – according to the Hudson Institute, less than 35 percent of all employees are truly loyal to their organization. What does that cost you or me? Studies have shown that replacing a manager costs two to three times the employee’s salary ($100,000 x 3 = $300,000) and poor management, inept people skills, employee morale, turnover, etc. cause additional collateral damage. The financial impact can be in the millions of dollars.

As the managing partner of DKAdvisors, a wealth strategies company and CPA firm headquartered in Phoenix, I needed to take immediate action to attract and retain talent to continue our tremendous rate of growth. At DKAdvisors we were hiring between 20 and 30 tax professionals a year, so agency fees were no longer an option. Even at five hires a year, the typical agency fees were too high. I was paying 25-30 percent of each hire’s salary. I needed a better solution — a solution that would provide immediate measurable and tangible results, that was also cost effective.

Realizing that neither I, nor anyone in my firm, had any real experience in actual recruiting, other than placing an ad or hiring an agency, I decided to hire an accountable and experienced in-house recruitment director with more than 12 years experience analyzing the market, developing recruitment departments, and building strategies that work. My expectation was set and he was off and running. Since then he has implemented new recruitment technology. In the first three months, we hired 18 new tax professionals! I asked him how he was able to accomplish so much in such a short period of time. He explained that the key was the efficiency of having a professional recruitment expert on staff, one who understands more than transactional recruiting. A recruitment leader that understands the importance of employee branding, technology, attraction and retention strategies (long and short term), and who is accountable for their actions and optimizes opportunities to sell the company 24/7, was the medicine my firm needed. Otherwise, the firm is burdened with internal or external recruiting efforts that only target a particular position on a transactional basis, he told me.

With a 2.2 percent unemployment rate in accounting, I began to see his point. I came to understand why the typical agency recruiter seemed to routinely fall short of my expectations. And, even though I had often been sold on the premise that my representative agency specialized in accounting and finance, they did not! Sure the agency’s client list was predominantly comprised of accounting firms, but the actual recruiter (that’s to say production person) who was working on my business back at their home office was typically a person with maybe two years of experience, who actually never specialized in anything! The recruitment leader I hired had personally run and operated more than a handful of recruitment firms, as well as directed large recruitment departments at Fortune 500 companies. Now he was accountable to me!

As we continued to talk about other differences he explained that most everyone in our industry is so far behind the curve (only selling candidates on positions through a transactional basis), that they are not building an employee brand. Candidates join a company, not a position. And when you recruit on a “transactional” basis you never build a brand, and thus will always be behind the curve, competing for the same talent at the same time as everyone else. The reality is the right person may not be available the moment a search begins. In fact, obviously only 2.2 percent are! But if you have been building an employee brand and never stop your networking and sourcing activities, your chances of success are greatly increased because candidates will stay in contact with “that” recruiter at “that” firm, always. The talent focus shifts from the two percent who are unemployed, to the 98 percent who are.

Remember that puddle of a talent pool I mentioned earlier? Well, for me it’s now a raging river, and I no longer have to worry about whether or not I will have the manpower to serve my clients. You can imagine the burden that has been lifted from my partners and me, knowing that candidates will always be available, even when unemployment is at its lowest. And I believe that the recruitment expert I hired, and the infrastructure I invested in, is a solution that may be right for every CPA firm in the country.

Endnotes:

1. Bureau of Labor Statistics

2. Ibid.

3. Walker Information Study

4. Gartner Group

Tom Wheelwright has a wide variety of professional experience spanning more than 20 years, and is currently the managing partner at DKAdvisors, a national wealth advisory and CPA firm based in Tempe, Arizona. His experience ranges from service in the national tax office of a Big Four accounting firm to service as the in-house tax advisor for a Fortune 500 company. He is a published author on partnership and corporation tax matters. You can contact him at cs@dkadvisors.com.

AZ CPA - November 2006

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