Practical tips for retaining your junior employees

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Accountancy firms are finding it harder and harder to hang on to their junior talent.

A common state of affairs is graduates joining, getting their qualifications and then leaving for new pastures. However, it’s becoming more common for employees to leave pre-qualification too.

While professional services are known for high attrition rates compared to other industries, for junior employee levels in the Big Four, attrition rates can be well over 20%.

This is problematic for accountancy firms, where high attrition carries high tangible and intangible costs. A study by Oxford Economics estimated that the average cost of replacing an employee is over £30,000. There are also hidden costs associated with low morale and lost knowledge.

So what’s behind the problem?

Millennials have been much maligned for their job hopping tendencies. Many will seek other opportunities much sooner than their baby boomer counterparts. However, this isn’t the whole story.

There are more options available to ambitious accountants today compared to the previous decade. Companies like Monzo and Deliveroo offer a different ‘deal’ - including a modern company culture, more varied work and rapid progression.

According to ACCA’s 2017 study, the top factor that attracts millennials is the ‘opportunity to learn and develop skills’ (94%), whilst 92% value career progression.

As junior employees approach qualification, they will be looking around and considering how they can continue to learn and develop in the firm. If there aren’t clear learning and progression opportunities, then they will likely find them somewhere else.

How firms have responded

Firms are recognising that they must respond differently if they are to appeal to junior talent.

PwC found that younger employees were leaving at an unprecedented rate, so had to take action. Insights from a survey established the two areas that would most impact job satisfaction: flexibility and leadership training.

This led PwC to set up a new flexibility programme that has had 90% take-up. It also holds a ‘discover’ retreat for new managers, to help train people in leadership skills from the very start.

Big Four firms often offer career support to improve employee retention rates. Traditionally this has typically taken the form of 1:1 coaching, mentoring or career workshops for junior employees to support career decision-making. The goal is often to help employees think more broadly and positively about their options within the firm.

Practical steps to take now

For firms and leaders looking to reduce their junior attrition rate, there are some practical steps that will stem the flow. Some take time to implement, but others can be done relatively quickly.

Understand your employees

There’s often disconnect between leadership and entry-level employees. Indeed, 69% of younger recruits feel that outdated hierarchies fail to make the most of their skills. That quickly leads to disillusionment and employees leaving.

To prevent this, accountancy leaders must take the time to understand what people really want. Employee engagement surveys can provide data to highlight areas for improvement.

However, conversations play an important role too. Whether, equipping team managers to have open career conversations or spending time on actively listening to teams - if you want to retain junior talent in your company, you need to have your finger on the pulse of what’s important to them.

Take action - provide career support

With greater clarity on what employees want, you can prioritise the action to take. Making this a collaborative process with junior employees is usually extremely valuable.

Providing extra career support at key career moments (like qualification) is known to work.

This can be on a 1:1 basis, where employees are encouraged to choose a career goal that motivates them for post-qualification. This will highlight opportunities to retain employees, whether through stretch assignments, mentoring or further training.

Be consistent

Variable quality in managers can be a challenge in any firm. Therefore, offering career programmes ensure that employees access a consistent level of support. Indeed, technology is making this option both more affordable and more bite-sized, so that it can fit around client work rather than taking days out for training.

People will leave eventually - make them advocates

We no longer live in a time when people spend decades with a firm. Therefore, when improving retention you should also focus on getting the best from people whilst they are working for you.

By providing great development and career opportunities, you’ll likely find ways to retain great people for longer and, for those that do leave, you’ll have given them a valuable experience that they can carry forward. They will likely be the brand advocates that encourage the next generation of talented accountants to join.

About Karina Brown

Karina Brown

Karina is co-founder at employee growth company GroHappy. Previous to this she worked at EY as Senior Strategy Consultant, Product Leader at InMotion Jaguar Land Rover and Commercial Lead at PiC.

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16th Nov 2018 12:07

Just pay them enough cash... works every time....

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to Tom 7000
16th Nov 2018 13:24

Thanks for joining the conversation on this Tom 7000. It's important that employers pay enough salary in line with market rates, but interestingly according to a recent study by ACCA, salary is less important to millennials than 'the opportunity to learn and develop skills' and 'career progression'.

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16th Nov 2018 12:14

In London, we have a deal with a property company to "block" rent residential flats at a discount, guarantee the rent and management then pass on that discount "renting on" paid out of net wages.

Young people love the security of their homes - is a basic human need and we have a manager looking after them.

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16th Nov 2018 14:06

With the Big 4, the attrition rate is partly due to some people not coming up to scratch - either in general or due to failing exams. Only so much you can glean about someone during assessments, so they are probably happy/accepting of a certain level of attrition.

It is also true that some people find the job is not for them and are the ones who head off to look for something else.

The total rate in my office when I trained was awful. I was the only one left standing after 3 years!

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By Ian Bee
19th Nov 2018 10:36

I joined a firm in 1980 as a new graduate and this question has been raised ever since then, and presumably before as well. More accurately the firms question is "how do we retain the staff we want?"

Evidently there is no easy answer if it has been asked for well over 38 years.

One problem is the nature of the firms themselves. Newly qualified accountants, particularly in audit, are faced a thankless task which is now under increasing scrutiny by the public at large. They see unrealistic budgets to be controlled by managers who have to work all hours to get the reward of a partnership and even that is not certain. When you get closer, it becomes apparent that junior partners don't earn the megabucks you might imagine, and there's another slog through the ranks of partner.

Hardly surprising that many foresee a different and more exciting career path.

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By DJKL
21st Nov 2018 21:07

Not sure there is that much of a change.

When I started in 1985 most who qualified with the firm left fairly soon after qualifying, some went abroad, some shifted to similar sized firms (within the then top 20 by size) some went to the then big eight and the odd one left for industry; it seemed to be expected.

Most were away within 12 months or so of qualifying, the firm did not appear to want to retain its home grown talent.

Of the seniors and managers we did have who were a permanent feature throughout my identure one was ex Thomson Mclintock and had qualified with them about 12 months before she joined us, one trained with BDO Binder and had been with us a couple of years before I started, the manager was not that long with the firm and there was one other qualified who was likely in his fifties at the time.Not one of them had trained with Chalmers Impey/Hodgson Impey.

The other constants were the three partners, the secretaries and the lady (whose name I now forget) who did the tax work re checking assessments and completing tax returns, plus an ex member of HMCE joined us in my final year.

The third year trainees, second year trainees and first year trainees were a revolving door.

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