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.
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 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.