NEW SURVEY RESULTS: Staff Turnover Escalates into Epidemic at CPA Firms

Rosenberg Survey 2013 - 2014 cvrMore on The New War for Talent

By Marc Rosenberg
The Rosenberg Survey

Professional staff turnover has jumped by much as 50% in one year, averaging now almost 18%.

These results were across all firm size ranges. This data is hot off the presses of the Rosenberg MAP Survey.

What happened? A return to the “old normal.”

We need to view the turnover increases with the proper perspective. Yes, turnover increased 50%. But the 16-18% range is about where staff turnover was at before the recession and where it has historically settled at in the CPA profession. The 11-12% for 2011 and 2010 was much lower than historical turnover levels because people were hanging on to their jobs, waiting until the recession’s recovery created new jobs.

As businesses slowly emerged from the recession, they weren’t doing much hiring. That changed in 2012. So yes, staff turnover is up 50%, but it’s just getting back to historical levels.

Specific turnover causes sound familiar.

The biggest causes of the spike in turnover were:

  1. Staff left to go into industry, many at higher paying salaries
  2. Staff counseled out of the firm
  3. Staff went to another CPA firm and
  4. Staff left due to spouse relocations and/or family reasons.

We’ve gathered some illuminating comments from managing partners, which seem to voiuce the concerns of many:

  • “One of our major niche industries has been hiring like crazy and they don’t care about economics; they will pay whatever it takes.”
  • “90% of our staff departures went into industry – salary offers were very high.”
  • “Most of our staff that left went to work for clients. All of these were good employees, but left for more money with less stress.”
  • “Many staff hung in’ with us when salary increases and bonuses were disappointing. Then, when the market improved, the staff jumped. There is a ‘war for talent’ going on.”

2 Responses to “NEW SURVEY RESULTS: Staff Turnover Escalates into Epidemic at CPA Firms”

  1. Katrina Geety

    As an accountant, if you could make a third more working in industry, not having to deal with the stress of tax season, a multitude of unrealistic deadlines and all of the regulatory requirements, what would you do? In an accounting firm, we sell hours and can only sell a % of what we have available (vacation, holidays, training, administrative, etc.) Maybe 90% available to be billed. In actuality, the utilization rate is much lower than this. So accounting firms are constrained on what we can bill our staff for and what we can pay them.

    In industry, they sell widgets or services (non-accountant type). An accountants salary can be absorbed into overhead much easier than in an accounting firm.

    AND, our accountants often have access to our client’s payroll records so they know what the accounting department employees earn. Couple this with a grueling tax season and the decision is very easy for them.

    We need to find a way to pay everyone in the firm better than industry does and control the workload. Utilization must be increased and we must strategically manage our client base. We need to be selective in the work we do and price it correctly. I am inclined to say that unlicensed tax preparers are undercutting us, but I am not sure they are. Often they are more expensive.

    You need to manage your practice, your client relations, projects (tasks) and documents and have very efficient processes. I developed and use Accountants’ Workflow Solutions to do this. While my utilization rate is very high, my clients will still buy my employees. My employees are awesome and my clients have deep pockets. Not much we can do about that and it keeps us tied to the company!

  2. Alexandra DeFelice

    I’m assuming this is just VOLUNTARY turnover. Do you have breakdowns of what level these staff were? It seems the younger staff are quick to leave and hard to keep. If the more seasoned staff with a big book of business and/or loyal client base are leaving, that’s a bigger problem than junior staff who are looking to quickly increase their salary or decrease their hours.