december2021 - 26

FEATURE
Nearly two dozen accounting
thought leaders, organized by
compliance automation provider
Avalara as the Accounting Meta
Influencers, gathered on November
1st for an online video roundtable
to discuss current trends facing
the accounting profession. The
practitioners and influencers are
challenged to develop actionable
strategies for firms to address
pressing issues, and will convene
quarterly. Gail Perry, a CPA, editorin-chief
of CPA Practice Advisor,
and member of the Accounting
Meta Influencers, moderated the
discussion.
STAFFING
Firm staffing challenges arose as
one of the most pressing issues
being faced by firms. Perry noted a
recent survey by PwC that showed
25 percent of employees nationwide
changed jobs during 2021, either
through retirement,
leaving the
workforce, starting a new job or
career, returning to school, or for
parental or other reasons. Additionally,
the survey found that 65
percent of workers were considering
looking for a new job, and most
wanted one with at least three days
per week being remote. Nearly 20
percent wanted a new job that was
fully remote.
This restless workforce is affecting
firms directly as well as their
clients, as businesses of all sizes are
also facing the challenges of labor
shortages.
" Clients are struggling, " said
Yvonne Scott, founder, CIO Concierge.
" We now have a national
labor market, even for firms and
businesses that are not national
companies. Unfortunately, many
are still trying to source staff locally,
and want people to move closer. Professionals
are increasingly unwilling
to do that, and so it's necessary to
change how we consider compensation
and salary structures. "
" That's the beauty of remote
work, " said Jen Wilson, CEO and
founder of ConvergenceCoaching,
LLC, which provides firm management
consulting. " Borderless reach
for clients and staff allows firms
to reimagine ideal clients and fee
structures. That includes client
pricing, and as much as 20 percent
price increases and letting go of
clients you can't serve profitably. "
According to Wilson, the
dynamics of the market are
increasing the need for accounting
and advisory services, at the
same time firms are facing staffing
challenges. The result is a seller's
market for firms, which are now
able to adjust their fees upward or
focus on more profitable clients.
Likewise, however, staff compensation
and benefits must be adjusted
upward, as well. Wilson noted that
many larger firms on the coasts
are poaching remote staff to work
remotely but at coastal salaries.
" Raises have to be 10% or better,
but that still doesn't keep pace
with coastal companies, " Wilson
said. " Four or 6 percent won't cut
it. Additionally, stay bonuses are
critical, so firms need to conduct
re-recruiting interviews with questions
like, what do you like, and how
can I help you? "
She also noted she doesn't care
when her staff does their work.
" Many of these people are night
owls. Where and when they do the
work, who cares, as long as clients
feel served. " Wilson said a key part
of maintaining work-life balance
during the holidays is that her
offices close for about three weeks,
which is fully-paid leave for all staff.
PRICING CONCERNS
To cover the increased staffing costs,
many firms are increasing pricing,
focusing on more profitable services,
or referring less-profitable clients
out. Any changes in pricing must be
communicated to clients, of course.
26 DECEMBER 2021 ■ www.CPAPracticeAdvisor.com
" A small
firm we advise sent
letters to clients about pending
pricing changes, and explaining
that they may end up having to
pay even more if they left and went
to another accounting firm, " said
Michelle River, president of Fore LLC,
which provides growth and pricing
consulting to firms. She noted that
most of that firm's clients accepted
the price increases and those who
were most reluctant were generally
less profitable clients anyway.
Not all firms have the same ability
to raise fees to cover increased
staffing costs, said Shayna Chapman,
a CPA and owner of Ohiobased
Shaynaco LLC. " Non-coastal
firms are not able to poach coastal
staff, " she said. " Firm revenue and
compensation can't be as competitive
for many reasons, including
smaller clients with lower revenues,
and even lower income tax clients. "
For firms that can't match the
coastal salaries, work-life balance
and other benefits can be a critical
factor in recruiting. However, as
Dan Luthi pointed out,
" Overinflating
prices and pay will lead
to an imbalance of pricing and
negotiation. " Luthi
is a partner
at Ignite Spot Accounting Service
and an author at the " Firm of the
Future " blog.
" It's critical to make sure current
staff are happy - when and
how to change compensation - to
make sure they don't leave, " said
Nicole Davis. At her Atlanta firm
Butler-Davis Tax & Accounting, she
says " we've made Fridays optional
[4-day workweeks], increased PTO,
and moved to 20-day PTO accruals
in addition to holidays and other
PTO days. "
Donny Shimamoto agreed.
" Our firm has longer tenure, but
we manage to pay below market
because of our greater work-life
benefits, " he said. " We give our staff
lots of trust and leeway and teach
them how to draw boundaries. With
increased workloads, staff need to
learn how to turn off. " Shimamoto is
the founder and managing director
of Intraprise Techknowlogies.
Randy Johnston, founder of
Network Management Group, Inc.
and executive vice president of
K2 Enterprises, noted that professionals
are feeling pressure from
many directions: Clients, staffing,
technology, advisory pricing, and
that these pressures seem to have
accelerated in last decade.
" In my client base, for managing
partners and businesses, turnover
rates are substantial. Some as low
as 4 percent, but the highest is 54
percent, " Johnston said. " One firm
never had more than 4.5 percent
turnover in 30 years, but in 2021
they had more than 20 percent.
With many professionals now
working from home, there are many
more options, and firms are taking
more care, better addressing compensation
and workload, and paying
more attention to people details. "
In his consulting firm, Johnston
says they typically pay more,
restrict hours, and give the best
benefits they can, including perks
medical like orthodontia. " If the
business owner is making money,
I want to share it. "
Like most firms, Gabrielle
Luoma, CPA, says her outsourced
accountancy and advisory, Tucsonbased
MOD Ventures, has increased
the use of virtual meetings for clients
and one-on-one conversations
with staff. " Are staff taking PTO? Let
them go, encourage them to use it.
We try to ensure the firm supports
the team we have and make sure
they stay happy, " she said.
The firm also invests time in
cross training, Luoma said, so
other staff are up-to-speed on each
others' clients. " This way, when it
comes to vacation, they can really
unplug and not have to check in.
When you have great staff they
want to check in while on vacation,
http://www.CPAPracticeAdvisor.com
december2021

Table of Contents for the Digital Edition of december2021
