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Skilled CPAs and financial experts are the driving force behind the growth and stability of firms in this industry. However, the harsh reality is that retaining these top talents can be a daunting challenge for many accounting and finance firms in the United States.
According to a survey by Robert Half, 43% of CFOs said retaining qualified staff is their biggest challenge in 2023. The same survey found that 28% of employees are likely to look for a new job in the next 12 months.
So employee retention is a critical issue for accounting and finance firms, especially in the highly competitive and dynamic US market. Losing top talent can have significant costs and consequences for CPA firms, such as:
- Loss of productivity and quality: Replacing a high-performing employee can take up to six months, during which time the firm may experience lower output and service levels. Additionally, the new hire may not have the same skills, experience, and knowledge as the former employee, resulting in a decline in quality and customer satisfaction.
- Loss of revenue and profitability: Employee turnover can negatively affect the firm’s bottom line, as it incurs direct costs such as recruitment, training, and severance, as well as indirect costs such as lost sales, reduced referrals, and damaged reputation. A study by the Center for American Progress estimated that replacing an employee can cost up to 213% of their annual salary.
- Loss of competitive advantage and innovation: Losing top talent can also weaken the firm’s ability to compete and innovate in the market, as it loses valuable insights, ideas, and relationships that the former employee contributed. Moreover, the firm may face the risk of losing clients or market share to competitors who hire the departed employee.
Given these high costs and risks, CPA firms need to adopt effective strategies to retain their top talent and prevent them from leaving.
The Talent Conundrum in CPA Firms
Before we delve into the benefits of offshore staffing for employee retention, let's take a closer look at the talent landscape in accounting and finance firms. According to recent data, the turnover rate in these industries is alarmingly high, with up to 20% of employees leaving their positions annually. This trend is concerning for several reasons.
Costly Turnover
Employee turnover is expensive. Replacing a skilled CPA or finance professional involves recruitment costs, onboarding expenses, and productivity losses during the transition period. Accounting and finance firms often underestimate the financial impact of losing top talent, which can significantly affect their bottom line.
Competitive Market
Finding suitable replacements for top talent is increasingly challenging in the United States. The competition for experienced CPAs and financial experts is fierce, with many firms vying for the same limited pool of candidates. This leads to salary inflation and heightened recruitment costs.
Knowledge Drain
Losing experienced professionals means losing valuable institutional knowledge and expertise. This knowledge drain can disrupt business operations, impact client relationships, and hinder the overall efficiency of the firm.
Best practices for employee retention
Provide competitive compensation packages
One of the main reasons why employees leave their jobs is dissatisfaction with their pay and perks. CPA firms need to offer fair and attractive compensation packages that reflect the market value and performance of their employees. They also need to provide benefits that address their employees’ needs and preferences, such as health insurance, retirement plans, flexible work arrangements, and professional development opportunities.
Offering competitive salaries and benefits is crucial in retaining top talent. Regularly review and adjust compensation packages to ensure they remain competitive in the market. Additionally, consider performance-based bonuses and incentives to reward outstanding contributions.
Foster a positive work culture and environment
Another key factor that influences employee retention is the work culture and environment of the firm. CPA firms need to create a culture that promotes trust, respect, collaboration, recognition, and feedback among employees. They also need to provide a comfortable and supportive work environment that enables employees to perform their tasks efficiently and effectively.
Professional development opportunities
Employees are more likely to stay with a firm that engages and empowers them to grow and contribute to its success. CPA firms need to communicate their vision, mission, values, and goals to their employees, and involve them in decision-making and problem-solving processes.
They also need to empower their employees by giving them autonomy, responsibility, and accountability for their work outcomes.
Invest in the professional growth of your employees. Provide opportunities for skill development, certifications, and career advancement within the firm. Employees are more likely to stay when they see a clear path for their career progression.
Work-Life balance
Promote a healthy work-life balance within your organization. Encourage employees to take time off, implement flexible work arrangements when possible, and create a positive, inclusive work culture that values well-being.
Hire offshore candidates
One of the most innovative and cost-effective strategies for employee retention is hiring offshore candidates. Offshore staffing is a form of outsourcing that involves hiring workers from countries with lower labor costs and abundant talent pools. By hiring offshore candidates, CPA firms can enjoy several benefits, such as:
Cost savings
Offshore staffing can help CPA firms reduce their labor costs by 50-70%, as they can pay lower wages and taxes for offshore workers than for US workers. They can also save on overhead costs such as office space, equipment, utilities, and travel expenses.
Access to global talent
Offshore staffing can help CPA firms access a larger and more diverse pool of talent than in the US market. They can find qualified and experienced candidates who have the skills, knowledge, and credentials required for accounting and finance roles. They can also benefit from cultural diversity, which can enhance creativity, innovation, and customer service.
Hiring flexibility
Offshore staffing can help CPA firms increase their hiring flexibility and scalability. They can hire offshore workers on a project-based or permanent basis, depending on their needs and budget. They can also adjust their workforce size easily by adding or removing offshore workers as needed.
Focus on core tasks
Offshore staffing can help CPA firms focus on their core tasks and competencies. They can delegate non-core or routine tasks such as bookkeeping, payroll processing, tax preparation, data entry, etc., to offshore workers. This way, they can free up time and resources for more strategic and value-added activities such as business development, client relations, advisory services, etc.
Offshore staffing is not only a solution for employee retention but also a source of competitive advantage for CPA firms.
How can Offshore staffing agencies help CPA firms?
Talent acquisition: Offshore staffing agencies can help CPA firms find and hire the best offshore candidates for their accounting and finance roles. They can handle the entire recruitment process from sourcing, screening, interviewing, and testing, to hiring offshore workers. They can also provide training and orientation to the offshore workers to prepare them for their roles.
Talent management: Offshore staffing agencies can help CPA firms manage and retain their offshore workers. They can provide payroll, benefits, incentives, and other administrative services to the offshore workers. They can also handle any issues or problems that may arise with the offshore workers, such as performance, attendance, discipline, etc.
Talent development: Offshore staffing agencies can help CPA firms develop and grow their offshore workers. They can provide coaching, mentoring, feedback, and career guidance to offshore workers. They can also offer learning and development opportunities to offshore workers to enhance their skills and knowledge.
Employee Retention As a Strategic Decision
Offshore staffing is a powerful strategy for employee retention that can help CPA firms achieve their business goals and objectives. By hiring offshore candidates, they can reduce their employee turnover costs and consequences while increasing their employee satisfaction and loyalty. They can also leverage the advantages of offshore staffing to improve their competitive edge and market position in the accounting and finance industry.
