322 The Secret to Retaining Talent in Accounting Firms

Today we are just roundhouse kicking. Some advice that is very frequently thrown around, around talent retention. How do you keep the good folks in your firm and how do you not lose them? And it is just so like broken. There is so much bad advice here. And the risk is when you go out and you make your own thing and you're like, I'm so sick of that thing, I'm going to make my better version. The risk here is if we're not careful, we can go out and recreate the very problems that we were trying to escape in our own firm by not acknowledging the simple reality that there's going to be a lot of situations where really good people, they're just, they're going to leave, they should, they're going to go do their own thing, they're going to do a different thing and that's probably in their best interest. But we pretend that that isn't the case. We try to like build the case for one. Here's why. This is the best thing that you'll ever be able to find, Gang. In most situations, that's just not the reality. So, so what is a, like a healthier way to approach this and develop a more transparent relationship with our teams to avoid the surprise exits, but also like be a better person, a better human being, help them grow and actually get more out of them when they are working with you. So I want to share some ideas with you. A different approach to talent retention, which is just kind of a hyper transparency approach. The way that I ran my firm, that honestly I think is the only version that actually works. So come on in, let's talk talent retention, but doing it the right way. All right, the two sides of this equation. You've got the accounting firm that's advocating for what's best for it. You've got the accountant that's advocating for like, bro, I only got one life. I'm, I'm not just gonna sit here and, and spend all of my years doing things that are only in service of the accounting firm. Right. So let's start with that accountant's perspective. What are the reasons why we leave firms? Maybe big firms, maybe legacy firms, maybe firms that just aren't aligned with your vision for what gets you excited anymore. First, the people around you just don't have the vision that you do. Not right or wrong. Although oftentimes it is like they have maybe a more old fashioned vision for how to run an accounting firm than you do. Or you started drinking a specific type of Kool Aid and you're like man, I'm just, I'm really excited about this version of accounting firms right now and I just can't stand to pump my efforts into anything else. Like that's totally fine. And there's a bunch of situations there where it's not right or wrong. It's just the people around you don't have the same vision that you do. At some point you got red pilled, believe that's the right pill, into some alternative way of running an accounting practice, doing all this stuff and you just need to go follow that through. That very commonly happens when folks first get outside of the group. Think of the firm bubble that they've only ever known, right? Like we are so much hustling at a game that is defined by all the people around you. Meanwhile, that is just like this itty bitty little microcosm that's probably just defined by a manager, one person with their own shortcomings and insecurities and, and like that is a little ecosystem that you and your colleagues live within and you're just playing that game as hard as you can. Meanwhile this, there's a million other firms out there, there's a bunch of other managers in that firm. Probably you zoom out. There's a whole lot going on that you're not plugged into. As long as you are overly focused on that itty bitty ecosystem and how you get to that next promotion or whatever it is. Right? Like the world is so much bigger than that. And oftentimes when people zoom out and they talk with more firm owners and they see what's going on, they realize there is a more interesting game out there for me to play. Not it's not a more right game or, or this or that. It is just a different game that's more interesting to you. Other things that end up being blockers for accountants reasons why they live leave firms. The ship is too big to steer. You may be really excited about say AI assistance right now, say no code building, custom software, a million different things, serving phlebotomists. There may be something that you're really excited about, but you've realized this ain't the place where that's going to happen. Because maybe it's not made up of the type of folks who are going to get energized about change. Most accountants relatively change averse, but there's a lot of them and many of them that listen to this podcast who are the opposite. They're energized by change. And oh my gosh, if you're stuck in one environment where there is no energy for change. To just be by a couple other people in a team who are energized by change. That is such a life changing thing thing to have go from like having to pump that juice into everyone else and feel like you never get anything in return to be like, oh this is the norm. Oh, it's my job to have this energy. Oh, the people around me have this energy. That's pretty cool. Those places exist and that is boy, let's just say you end your workday in a very different place in an environment like that than when everyone else around you have has to leech your energy out of you just to get through the day and be willing to use that new practice management system or stop using that spreadsheet they've used to track things for the last decade because you just rolled out a whole thing that replaces that that old problem. Right. That's one thing actually. So we do. We've started placing accountants in my audience into firms in my audience. Jason Careers is the website. It's linked in the show notes of every episode. I think one of the most common things you hear from applicants who are looking for a new role is is that they want to feel appreciated for their energy for change. They want that to be an asset rather than feeling like they're a thorn in the side of everyone they work with. That is a very common reason why people are changing firms right now. Today's episode is sponsored in part by liveflow who just recently rolled out zero support for the first time. Really exciting. Not familiar with liveflow. Liveflow syncs your QBO or Xero data into Excel or Google sheets on a one time basis, on an ongoing basis. Build out big old work paper templates and sync a whole bunch of data, your favorite reports from the accounting system out with the click of a button. Even then reuse those templates across different companies. Cool use case. Actually we're getting more into sort of lead magnets and attracting better clients in the podcast. One of the themes that we're kind of going through and so what's a like quick and easy lead magnet you could deliver to a specific type of potential client. Something that you build out in a spreadsheet that gets them to some sort of conclusion and all it requires is getting you access to the QuickBooks file. You run that like template with Live Flow to pull all that data into a workbook that is ultimately a deliverable that can go to that lead to say look at X, Y and Z. Here's some issues we identified. Here's some opportunities, whatever that is. It could literally be as simple as highlighting all the silly things they're doing in their accounting file. But lifelow, because with the click of a button, you can sync all of that data out, be it a single sheet or a whole ton of sheets, 30 sheets, into a workbook. You can templatize what that looks like and then use it across as many clients as you want. Now that's like the tip of the iceberg. LifeLow also does consolidations. You can use it to give limited access to accounting data to like stakeholders, people within the company. Bunch of ways you can use that one. Basically just gives you a button you can click in your favorite spreadsheet app to instantly pull in any data that you want from the ledger. Pretty handy, right? That's LifeLow. Learn more about that one. Check out the link down in the show notes. This episode is sponsored in part by Teamup. Do you like middlemen? I don't. Get out of here. Middle men and women. Teamup cuts out the middle people. Yeah. By giving you direct access to talented accountants in the Philippines. I need some suspicious character between me and my team. They're my team. Team Up's got the on the ground recruitment in the Philippines that'll help you find super, super talented people with the experience that you are looking for. And then after you hire them, you know what Team Up's gonna do. They're gonna. They're gonna gtfo. Can I say that? They're gonna gtho my biz. Unless. Unless you want help from them. That is one thing that I heard they're doing more of. It's just like offering support like, hey, never worked with offshore people before. Happy to hop on a call and kind of give you. But what they won't do is be the middleman long term. Charging fees, cutting out a big old part of the monthly check that you thought was going to your team member that's actually going to line that middle person's pockets. Not with Team Up. Okay. That's their model. Direct hiring in the Philippines. All they're going to do is they're going to help you find people rather than going through a BPO where you're paying like, like a facility or kind of a facilitator or employer record. And the person. I know people that do it both ways. There's actually arguments to be made for both ways Team Ups approach. They want to help you work directly with the team if that's the flavor you're looking for. Check out the link down in the show notes to learn more Other reasons the firm ambitions, or lack thereof, no longer align with your own. You're not given enough responsibility. Maybe you're stuck behind somebody else. The reality is you're just, you're in a hierarchy and somebody else is blocking your way. You are blocked from delivering the services your clients need. Maybe you only have a certain set of services you can draw from, but what your clients need is maybe more hands on advisory or, or something specific to what they do that the firm isn't willing to offer. And you're like, well, I can't give them what they need here. Like, this is just, this is frustrating. And some accountants, they just want to make something different. They just have their specific version. They want to build that thing that is representative of them. And every single account is going to be different and feel different versions of this and a whole bunch of things that we didn't touch on because they're all different human beings. But from the firm's perspective, oftentimes there is this like, we're better than everyone else sort of framing or this just blindness or facade that leadership has to put on to say like, well, of course we're better than everyone else because we don't want you to believe the alternative. But I just, today I just want to cut through all that BS and just like, let's be realistic about how many firms there are out there in the world. Some firms are good at some things, some firms are bad at other things. And some people are just on a path. Most people are on a path where you are not the right thing for them forever. That's just how it is. So if we accept that reality, how do we operate within it? Well, big thing that I think most firms need to accept and it is the firms who very often are most frustrated that they can't get good people to come work for them or you can't find help like you used to. Here's what you have to realize is your vision for your firm, it has to be big enough for other people's dreams to either fit within them or you have to acknowledge the fact that those people will eventually outgrow you. So your vision for your firm, how big is that? How ambitious is that? Not size, not not scale, but impact. Your vision for that firm, if you expect people to stick around long term, those people's dreams, what they want to make, how they want to help people, the type of lifestyle they want to live, what type of car they want to drive, what type of school they want their kids to go to. Your vision for your firm has to be big enough for those people's dreams to fit inside of it. And if it is not big enough, you have to be realistic about the fact that you are a stop on this person's journey. You're not the destination, they're not going to be with you forever. And you're lying to yourself if you think they will. Now that is not to say that everybody needs to run a firm with this big, ambitious, like, wildly huge vision. On the flip side, accountants are going to have very different levels of like, what they want their life to be, what their dreams are like. Some will be very humble, like, want enough to be stable and that's it. Others will not be happy until they have a lot. And all that may or may not fit within your vision for what your firm is. So three positions that firms can take. In my mind, these are kind of the only three options. Number one is one of fear. You convince people, the people that work for you, that they aren't capable of doing their own thing, that if they go and do something else, it's not going to be as good as what they have. Because this is known. You've got a good gig, we pay you good money, we're stable, we're not going anywhere. Those firms instill fear into people to keep them. That is their retention strategy. Sound like a good one? Probably not. Second approach is avoidance. Steering clear of ambitious people. Firms actively do this. They say in the hiring process or they try to suss out, like, is this the type of person that's high level enough or ambitious enough, or however you want to frame it. The type of person who will ultimately go out and do their own thing. If they are, let's not even start. We only want to entertain working with them. And if you take this position, you're setting yourself up for a whole different type of pain. Because then they're the same people that look around them and say, like, who's going to step up around here? Like, who's going to show a little bit of, a little bit of gumption to go out and figure this thing on their own, or why do I have to always do everything myself? Well, it's because you're not bringing anybody into the fold that has the same level of ambition that you did when you went out and made your own thing, right? So three positions firms can take. One, fear, scaring people into not being able to get something better. To avoidance, avoiding people with ambition. The third position, collaboration. Being transparent with the folks that they employ about their ambitions, maintaining an open dialogue and together making a path forward that is them working for you, but also maybe them not working for you. Something I shared several years ago that people had all sorts of wild different reactions to was how about instead of having people sign non competes, we have them sign competes instead. Basically plans for friendly exits from your firm. Imagine if you had somebody that worked for you who was super capable and they were on an inevitable path to going and doing their own thing. Imagine if you could, instead of just covering your eyes and pretending that like no, they needed you forever until one day they disappear and you're hosed. Imagine if instead they could take part of your client base, a starter pack, and with your support go off and start building their own thing and in exchange you sold that part of your business at a solid multiple. Say you could get 2x over 5 years or something like that. Something that'll let somebody bootstrap their own firm, have cash from the beginning, working with clients they already know and you're getting paid for it. Is that a better or worse outcome than somebody leaving in the night because you weren't willing to acknowledge that you aren't going to be the best place for everyone forever, right? Which. Which just isn't realistic. This episode is brought to you in part by Maker's Hub. If you've been around the channel long, we've done a number of demo days with Makers Hub showing off how they're using AI vision models to automate your accounts payable services, your bill pay services that you offer to clients. Super smart handles, some really gnarly stuff. Well, they've been busy. They keep shipping updates. A couple of things they've shipped recently. They got a W9 module now to take the headache out of 1099 season. Just in time, man. That's coming up. You got W9 for all those vendors. Oh, do it now. Don't kick yourself in January again. And then they also shipped sequential approval. So by default, approvals in Maker's Hub have historically been like approvals in parallel. If three people need to approve something, they can all do it at a time. Now, optionally, you can make those approvals sequential where they have to be, step by step. They don't go to person two until they go to person one, that sort of thing. Some cool improvements they've shipped recently and got a bunch more cool stuff on the way. If you're looking for a more profitable way to run your bill pay practice, check out the link to makershub down in the show Notes this episode is sponsored in part by Stanford Tax. If you run a U.S. tax firm, you know just how crotchety the information gathering process has been for tax prep for eons. Sending out these nasty organizers asking boilerplate questions that you frankly already know the answers to. So the client's like, why are you making me do this work? Stanford Tax, they're going to give you a super intelligent way to gather that information. Step one, connect your tax software. Whatever your role. Assert Pro Series drake ultra tax cch access import thousands of clients in under 10 minutes. Step two, get personalized questionnaires personalized to each client. Includes prior year numbers, detailed document checklists like based on the actual data from last year. Fast and easy for your clients to fill out. Do this for 1040s, but also 1120s, 1120s, 1065s. And then step three, you get a PDF work paper of that client's submission. So you, you get a nice tidied up, organized bookmark. It's got all the documents they uploaded, all the ways they answer the questions, all that stuff in a single place. So that that prep process is already halfway down the road, I don't know a ways down the road. And the client had a clean, straightforward, modern experience getting you that stuff. Stanford is one of a few companies using AI to innovate in how we approach our tax workflows. Learn more about that one. Check out a link to Stanford Tax down in the show notes. So a different way of framing that. What would it take to make your best employee leaving Amazing. So imagine your best employee, your, your key person, the most painful person to leave you. What would it take to make them leaving Amazing. How about, what if they got you out from under a niche that you no longer enjoyed? I know that's one thing people have fear of when they're specializing is what if I actually don't have a ton of expertise here? Or what if it's no longer fun? What if someone leaving who is super capable could get you out from under that could actually pay you really well for that business that you built while giving them something to be proud of and continue to build themselves? Pay it forward a bit, right? How about having a partner that you were amazingly aligned with that you could refer a type of workout to that you didn't want to do anymore. Let's say you're a tax pro and you started doing bookkeeping and you're like, man, I just don't like this stuff. I don't want to do bookkeeping. Someone else can take it and now you've got someone who literally used to work in your firm, that is you have a tighter relationship with than any other firm owner. And you can now refer that stuff out, be it tax work, accounting work, VCFO work, payroll work, that is, in my mind, much better than partnering with some other random firm. Like, that is such a deep collaboration. And having an abundance of these people and like a very tight network gives you a ton of flexibility to consistently divest yourself of stuff that you don't want anymore. We talked recently about the value ladder and how trying to go up often means you're not as excited about the work anymore that wasn't quite as profitable. Well, this is kind of one of the traps of, of hanging onto your first clients forever. You know, want not wanting to get too big for your britches and lose track of your ruts. Well, the longer you cling on to those very first clients who are no longer very good clients for you, the longer you're keeping them from being someone else's first clients who are putting food on their table. And as long as you are in this game, you're going to be growing and, and you're gonna be wanting to do new things. And that having that willingness to evolve out of what you used to do, there could be a lot of guilt that comes with that. And you don't wanna let those clients down. But your team, the folks that you're bringing along with you on the journey, they're evolving as well. And oftentimes they're gonna get to a point where they're like, I think I decided I wanna do my own thing. And they may not be quite sure how to do that yet. But if you reframe this from losing your best employee to, to how can we do this tactically to set them up for success longer term? This is a better financial result for you. This is a better human result. Like, this is you paying that forward in a really cool way. I mean, there's so many people listening to this right now who went out and built their own thing from scratch, but are like, dang, I built that from like side hustling from nothing. If, if I could have taken a hundred grand in clients from my last employer, stuff they didn't want just to get me started. Not that I'm going to keep those clients forever, but that would have made the prospect of doing my own thing so much better to have the support of the people that I came from, rather than leaving there being friction there and then having to figure it all out. For myself, like, having that support structure would have been so much better. Right? And when I ran my firm, ultimately, I had to be mindful of the fact that everybody is on their own journey that is completely independent of my firm. The notion of, like, somebody being a company man or a company person these days, frankly, is insulting. Like, that's just saying we expect you to perpetually put our interests ahead of. Ahead of yours. Now, there is a version of this that is important, and that does matter. You can call it loyalty. You can call it whatever it is. The reality is running a business is freaking hard. And there's times where it's not going to be pretty. And there's times where you guys stick together and you're going to have egg on your face. And folks will have to step up to the plate, unfortunately, in ways that maybe you. You aren't proud of or didn't expect. The problem is when this stuff happens due to mismanagement, because there. There's times where everyone else will be like, this was coming from a hundred miles away and we did nothing, and now we're here, and now I'm paying the price. That's not what I'm talking about. That sucks. That's just bad management. And you should be frustrated, and you should probably look for something else when that happens to you. There are situations outside our control where stuff goes sideways, and it's like, boy, yeah, this was unforeseeable. We're gonna have to have a better plan next time. But right now, we do kind of have to buckle down. That stuff's going to happen. But when it happens over and over and over again and you're just the victim of it, and your colleague leaves, and that leaves you in an impossible spot because you're like, oh, great, we're on a crappy situation. So people are leaving, and now the people who are staying are actually having to pick up a bunch of that. That just sucks, man. So I genuinely see, like, those three framings for firms as being the only options. Either you put the fear of God on people to say they're never going to find anything better than you. That, to me, doesn't feel like a cosmic hand that's going to be stacked in my favorite second option, avoidance. Avoiding people who are ambitious. This, arguably, is what my last firm did until I bought out a couple of the partners. The partners wanted to be front and center, handle all the staff communication. That was their preferred way of working, which, honestly might be fine. But the byproduct of that is they hired A bunch of people who wanted to be back of house. And then when they hit capacity and they're like, oh, we want to do more things, they're like, where are all of our middle managers? Like, why do these people not have any ambition? And like, well, because you brought them into an environment where they could sit in the back. And like, they're not people who are comfortable doing this stuff because, well, you scared them into thinking that they couldn't do it from day one. So that second approach is like, avoidance of going after ambitious people to begin with because you don't want to get your heart broken when they leave. But the third approach is one that is more collaborative. It is being transparent with people about the journey that they're on. They may be looking for a firm right now, but they may be looking to do their own thing in five years. You know what? That type of person, you're probably going to get a really freaking good five years out of them. And if you can even design that path to be like, hey, we're 12 months, we're 24 months out from this. Here's what that exit could look like. And here's the work that you could take with you potentially, if I'm getting paid for that and if that gives me some flexibility to reorient my firm around something I'm more excited about, I mean, that sounds pretty good to me. Right? It also means along the way I have people who are really, really good people who will do anything for me because they know that I genuinely have their best interests at heart, whether that's aligned with the well being of my firm or not. We're being real with each other. And so you got that added benefit of like, they will like, follow you to the ends of the earth because you're being a good human, because you're being a good manager. So you can keep your staff retention. I know pizza parties, management training, executive programs. Like, there's versions of all these things that are good, but they very frequently sidestep the real issue of are we having real conversations and are we actually treating these people as humans who are on their own journey, or are we only thinking of them through the lens of what they can contribute to our firm, which is kind of implicit in the entire framing of, quote, staff retention. Right. Should the goal be just to keep people until the end of time? Simply saying that implies I'm not actually thinking about what's best for them. I'm thinking about what's best for my firm. But if you turn that on, its head and you're willing to actually be real with people and understand where they're at and where they want to go. I would actually argue that framing is the best thing for your firm and is the only way that you keep from perpetuating the problems that are in our profession when you go out and you do your own thing. Be better than that, people. Come on, we got enough problems in this space. I don't know, I probably made somebody mad there. Anything you disagree with, anything you're excited about, or even more like tactical like, okay, but then how do I do xyz? Pop that stuff down in the comments. Comments are always super helpful to kind of fill out the conversation a little more. Inevitably there's gaps as I'm ranting through this stuff, but that's it for today. Thanks for coming and hanging. I'll see you in the next one.