Canada’s labour market has experienced a rough couple of years. First it was the COVID-19 pandemic, and the nearly 14% unemployment rate that ushered in circa late spring 2020. Followed by The Great Resignation (also known as The Big Quit and The Great Reshuffle), in which almost one quarter of Canadian changed jobs. And now, we’re in the throes of the Baby Boomer retirement explosion that labour force experts have been cautioning about for years.
Organizations, and their human resources departments, have had some serious challenges in recent months. And, unfortunately, accounting firms have not been sheltered from these compounding labour issues.
The Impact of The Great Resignation on the Accounting Industry
WealthCo Senior Planner, Ryan Mackiewich, spends his days in regular contact with our accounting firm partners, and can attest to the HR challenges that the industry is facing.
“A huge factor in The Great Resignation was that in some parts of the country, you would regularly have employees commuting two – three hours per day round-trip in order to maintain employment. Once everyone started working from home, it opened their eyes to what was possible. Accounting firms are a bit different, however. They are often in smaller communities where commuting tends to be less of an issue. Where the big stress has been coming in for several of the firms that I’ve been chatting with, is the fact that the busy season started in February 2021, and it hasn’t ended since. Accounting firms have been working at 110% for well over a year and people are tired.”
While LinkedIn recently reported that accounting had the third lowest turnover rate (at 9.4%), this could change in short order as the impacts from The Great Resignation continue to be felt and as Baby Boomers continue to retire in droves in the coming decade.
The Effects of Turnover on an Accounting Practice
For accounting firms, turnover is a serious issue. High turnover rates can lead to a myriad of problems, including reduced productivity and decreased morale. Furthermore, turnover hits the bottom line in a big way when you consider that it includes the following costs:
- Processing the exit paperwork;
- Conducting an exit interview;
- Posting the job ad;
- Reviewing applications;
- Interviewing candidates;
- Conducting pre-employment testing and reference checks;
- Finalizing the employment contract;
- Training costs;
- The cost of lost productivity during onboarding;
- Signing bonuses;
- Referral bonuses; and
- Possibly even moving costs.
Phew! That's a lot of money for a firm to spend, especially if their turnover is high. Not to mention, when experienced accountants leave, they take with them years of institutional knowledge and expertise – a significant productivity and financial hit that is hard to even begin to quantify. This can leave those who are left behind feeling overwhelmed and unprepared, making it challenging to maintain their momentum and stay focused on their goals.
“Accounting firms have a wide range of clients,” Mackiewich points out. “When a team member leaves and these clients get shifted around, especially the more challenging clients, it is draining and stressful to the person taking the client on and picking up the slack. This can make it hard for people to last in that environment.”
Weathering the Labour Storm
There are several strategies that HR specialists recommend during times of high turnover, including:
- Having a solid onboarding plan in place for new hires;
- Documenting as many processes as possible so that new employees can quickly learn the ropes;
- Involving current employees in mentoring new team members;
- Encouraging socializing among team members to help facilitate relationship building;
- Communicating regularly and effectively with staff during times of change;
- Communicating regularly with clients along the way to help manage expectations; and
- Taking time to celebrate the wins along the way.
Joining the Integrated Advisory community is another vital way for firms to continue to grow and prosper during these times when so many other firms are struggling.
“The firms we work with have access to a wide range of best-in-class specialists that can help support their business,” Mackiewich shares. “Because of the type of work we do with firms and clients, we create an environment that supports and enhances the accountant’s trusted advisor status. When a firm does that with enough clients they get a much more effective work environment and it creates a whole new world where positive things can, and do, happen.”
To learn more about how to best get through these retention-challenging times, check out our Innovative Accountant podcast episode, “Navigating The Great Resignation”.
A member of WealthCo’s Integrated Advisory community, Ryan Mackiewich, CPA, CA, FEA is a Senior Planner with WealthCo. With over 25 years as a CPA, CA providing tax and business advisory expertise, Ryan also holds the Family Enterprise Advisor (FEA) designation and applies it to working with business families to help them effectively transition business, wealth, and roles. When he’s not doing that, Ryan loves to camp, hike, and explore all the wonderful places the world has to offer.
The Integrated Advisory community consists of a network of progressive CPA firms, along with best-in-class professional advisors, service, and product specialists, who work together to deliver an elevated and holistic client experience. One that optimizes both their personal and professional lives with an integrated financial strategy designed to help clients reach their goals.