How to keep leaders from leaving public accounting
Three ideas to raise the value of soft skills.
October 7, 2013
“Soft skills are vitally important for accounting and finance professionals. So much, in fact, that ‘Soft skills are the new hard skills.’”
— Robert Half Finance and Accounting Facebook post
According to the AICPA’s 2013 Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits (access the PDF), CPA firms hired a record 40,350 new accounting graduates last year, up from the previous high of 36,112 in 2007. While we appear to be doing a great job of attracting young people to the profession, we’re still missing a key component for keeping some of the brightest and best engaged in public accounting.
The problem is our “one track up or out” system. When graduates first join firms, a laser focus is placed on developing technical competencies, aka the “hard skills.” Most firms immerse their new hires in technical CPE, service methodologies, and early service delivery assignments. Those with the highest level of technical competence are praised, rewarded, and promoted, but those who find the technical details “less thrilling” or are less accomplished in those areas are quickly disenfranchised. These young CPAs begin to realize that they are not like their more technically gifted counterparts, and many begin to believe that they have chosen the wrong field. Inevitably, many of these young CPAs leave the profession.
At this point, you might be saying, “This is as it should be—survival of the fittest!” But before we accept this as good attrition, fast forward seven years. CPAs who have made it this far are being promoted to manager positions. As managers, these young CPAs are expected to exhibit a higher level of “soft skills,” such as the ability to communicate and make presentations, mentor and manage people, and develop business. Their clients begin to expect more, too, such as foresight, the ability to create value, and the skills to provide sound management advice.
Problem is, many of these “softer” abilities do not come naturally, easily, or sometimes at all to the highly technical. In fact, in my experience, the higher a CPA’s technical ability, the fewer emotional IQ competencies are naturally present, and the more challenging they are to develop. So, as people mature in the profession, firms and clients value their technical abilities less and their leadership and management skills more. Meanwhile, many CPAs who may have been most predisposed to exhibit those competencies have been weeded out because they lacked the “hard core” technical talent and/or interest.
What’s wrong with this picture?
Study after study—including these cited by Grant Thornton, CFO Magazine, and the Journal of Accountancy—illustrate the increasing importance of hiring CPAs with strong soft skills. While the following quote applies to the changing expectations of the internal auditor, it perfectly summarizes what I see as the shifting expectations of public accounting professionals as they progress in their firms:
“ … [CPAs] need to stop thinking about themselves as compliance specialists and start taking on a much larger, more strategic role within the organization,” then-Ernst & Young LLP internal audit leader Brian Schwartz said in a news release earlier this year. “IA is increasingly being asked by senior management and the board to provide broader business insights and better anticipate traditional and emerging risks, even as they maintain their focus on non-negotiable compliance activities.”
It isn’t fair to expect people whose gifts are highly technical to magically “sprout” softer competencies when they reach a certain level in your firm. So, as your firm grapples with the need for both wonderful technical talent and leaders with more business-building relational skills, consider implementing these three ideas:
Screen your candidates for soft skills potential as carefully as you seek technical ability. A super-high GPA does not necessarily predict an individual’s relational or strategic abilities. Acknowledge that you may find candidates with stronger soft skills who don’t score the highest technically, but that may not be reason alone to screen them out.
Develop soft skills early and often, beginning in year one with simple communication, networking and time management skills, along with ethics and professionalism. As their careers progress, teach them practice economics, people development and performance management, selling skills, and strategic leadership. When you invest in an array of soft skills development early, you’ll be better able to identify CPA team members who possess leadership and management gifts at the earliest stages of their careers.
Place an equally high priority on nurturing and challenging both your “soft skill” and “hard skill” stars along parallel tracks. While a base level of accounting and finance knowledge is expected, recognize that there are critical roles within firms, such as mentors, rainmakers, and practice leaders, that are often understaffed because those best suited aren’t incentivized to take those roles (see my blog on Lip Service) or they’ve already left our firms for a place where their gifts would be better used.
By developing a two-track identification and development system—one for the highly technical, strong service delivery professionals and one for those with natural people and problem-solving skills—I believe we’ll keep more leaders in the profession and allow them to ultimately contribute their different gifts and talents to ensure your firm’s success.
Jennifer Wilson is a partner and co-founder of ConvergenceCoaching LLC, a leadership and marketing consulting and coaching firm that helps leaders achieve success. Learn more about the company and its services at www.convergencecoaching.com.