In this era of job hopping and near full employment, finding (let alone retaining) the very best talent is proving tough. And as practices struggle to lure talent, a skills shortage has begun to bite. Three-in-five businesses say the UK’s skills shortage has worsened in the past year, according to research from the Open University.
Worryingly, more than half expect the situation to further deteriorate. Finding an external successor is increasingly unrealistic. More so than ever, your firm’s long term future relies on grooming a supply of talented, well-prepared successors.
Retirement age comes a lot quicker than many accountants expect. The average age of a British accountant is 46, which is higher than the equivalent figure across the UK workforce as a whole.
And yet succession planning remains a trouble spot for many smaller accounting practices. So what can accounting practices do to simplify and power up their succession plans?
Choose a successor
If you’ve spent a substantial chunk of your professional life building a practice, letting go can be hard. What helps is if the process is gradual and the best way to ensure leadership continuity after your retirement is to find and train someone to become your successor.
Of course, this will be a demand on your time now -- but your firm will be better off in the long run if the practice’s new leader is someone who has been properly prepared for the job.
If you’re planning to retire five or ten years from now, you’ll want to start looking for your successor sooner rather than later. Who that person is, is up to you: It could be a family member or perhaps a trusted colleague.
The transition period
It sounds scary but set a timeline for grooming your successor. The question is simply how much time do you think you need -- or, indeed, have -- to prepare your candidate.
Your timeline will depend on the person you’re training, too. The speed at which your successor learns will have a defining impact on the length of your transition period. Create a list of the skills and responsibilities for your successor to learn and allow appropriate time for them to learn.
How will it be done?
It’s not the only option on the table but if you want to sell an equity share to your successor, it’s important to get organised now. New equity partners often require help to smooth the transition from salaried employee to owning a share of a business.
A specialist finance provider like Wesleyan Bank can help by offering bespoke equity purchase loans. Individuals can access funding of up to £500,000 over a term of up to 15 years. This provides your successor with a more manageable means of buying into a practice.