By Hitendra Patil
Topmost thought leader Ronald J. Baker said, “The World Bank reports that 80 percent of the developed world’s wealth resides in human capital, illustrating that we’ve been in a knowledge economy since the 1950s. Yet most accounting firms are utilizing a business model developed during the Industrial Era, with a relentless focus on efficiency and a ‘we sell time’ mentality.”
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In his succinct and soul-searching praise for “Accountaneur: The Entrepreneurial Accountant,” Baker urged, “from changing your business model to focusing on developing your firm’s human capital, and more – will keep your firm relevant as we encounter an increasingly turbulent and changing marketplace.”
I have been speaking with hundreds of CPAs, accountants and tax practitioners through the years, and recently in a few quarters there has been a distinctly noticeable common feedback from them about the generational work-ethic changes, aspirational differences and the undeniable staffing challenge that millennials bring to the accounting and tax profession.
Researching further for solutions and possible strategies to ride the disruptive wave of human capital thought patterns, I studied several technological shifts, human behavior science research, tactical moves by successful firms, and so on. I spoke with Chester Elton, a New York Times Best Seller author known as the “Apostle of Appreciation.” He is recognized as one of the top 30 management gurus of recent times.
I then thought about how to apply the widely accepted and well-researched Maslow’s Theory of Hierarchy of Needs to the accounting profession’s current situation, given the almost unanimous concern about the future of human capital challenges in the profession.
I noticed significant shifts in the hierarchy of needs.
- What used to be LATE STAGE needs in earlier generations seem to be now the EARLY STAGE requirements of staff – to be more engaged and feel fulfilled.
- At the same time, the pinnacle of fulfillment no longer seems to be confined to only realizing one’s potential. It now needs to align with the passion and strengths of the individual.
The yellow-red highlighted parts of the diagram represent these shifts:
Note carefully: The sheer proportion of the first two basic needs to the total represents nearly 50 percent of the full spectrum – thereby indicating that firms need to invest far more time and provide far more attention to the new incoming staff.
Embrace the Shift
Compare the diagram above with the classical Maslow’s Hierarchy of Needs and you will see why the yellow-red parts represent the telltale shift in expectations of your new and future staff.
Let’s dissect the needs, from the ground up:
- Physiological needs
The biggest and perhaps the most unsettling effect for firms hiring now and in the future is the expectations of work-life balance becoming an almost physiological need of staff. Vacation travel (life experiences, in general) is high on the agenda of millennials. They need time. More importantly, they need freedom from location and office hours. They want flexibility. As long as the work gets done measurably, “how and where” is secondary for the new-gen staff. It converts into more technological investments for the firm (cloud, data security, etc.) and of course, a paradigm shift in the mindset about how the work needs to be produced.
And this is just about staffing. We haven’t yet researched how the “expectations hierarchy” of new-gen clients is shifting.
- Learning opportunities, early mentoring
Assigning a mentor right from day one when new staff joins is something that you would want to ensure if you want to retain talent. And learning opportunities are not limited to your procedures and processes alone. They include learning business skills as early in the job as possible. Those are the expectations that new-gen brings in with them, and any disillusion due to the culture at firms leads to quick exits.
- Feeling of contribution:
Born and brought up with collaborative technologies, quick communication and an ability to contribute to the “group” (community) is like breathing for the new-gen. Without it, their personas will suffocate. And they will look for fresh air (opportunities) outside your firm. It indicates that they need to be more than just part of a project team, so you need to measurably specify how they work as team members to contribute to the overall success of the project.
- Participation in decision-making:
While this “need” may not seem to have changed over the years, it is important to note that combined with the need for a feeling of contribution, the natural progression is to make the new-gen feel they are genuinely participating in the decision-making at the firm. Do not get surprised if much less experienced staff says something like “What if we did it this way?” or “Why can’t we do it that way?”
- Role fits passion and motivators
The pinnacle of success is no longer confined to utilizing the strengths of the person. Just because someone is great (highly skilled and knowledgeable at something) and their role leverages that greatness, it is no longer a guarantee that the person will feel happy and truly fulfilled. What will matter now, and increasingly so, is to provide challenges that appeal to the true passions and unique (and ever-changing) motivators of the talented and experienced people.
Lead the Profession
Are you the key person responsible for delivering fulfilling experience to people working at your firm? We’d love to hear from you how the hierarchical needs of staff at your firm have changed over the years and what you have noticed as the make-or-break factors in attracting and retaining talent to your firm.