The jobless rate for accountants is at 1.8 percent.
Let that sink in for a moment. That’s less than half of the already low national unemployment rate of 4.1 percent.
If you’re a controller or CFO, that number might be giving you the sweats. It most likely means:
- You’re concerned about being able to attract top talent.
- You’re worried about losing your best talent to competitors.
In other words, good people are getting hard to come by!
To manage this risk, managers of accounting and finance teams need to think outside the box. Focusing on base pay and benefits isn’t going to cut it anymore.
That was the lesson at this month’s CFO Leadership Council meeting in Downtown Los Angeles, entitled “Creative Compensation Strategies from Startup to Exit.”
FloQast is a new sponsor of the council, and I was happy to attend on behalf of our company.
Here are three of my key takeaways:
Focus on qualitative benefits such as workplace amenities, the option to work from home, and flexible schedules.
Ryan Barncastle, Partner at Raines Feldman LLP, said that he was mystified when interviewing a young attorney who, when given the opportunity to ask questions about the firm, asked what the snacks are like.
Yes, instead of asking about the firm culture, benefits plan, or any other number of standard interviewee questions, this young job applicant chose to ask about the free food in the break room.
Of course, we all laughed, but Barncastle warned the room not to discount the question. He noted that today’s 20-somethings view their first jobs very differently than his generation — Barncastle is 38 — or Baby Boomers.
Millennials tend to see a first job as a two-to-five year stint rather than a career. And that’s why they feel comfortable asking about work-life balance or snacks — questions that would themselves have been out of the question when Barncastle was applying to jobs out of law school.
Carl Schmitt, Associate Partner at Aon/Radford Consulting, added that the free snacks and other workplace amenities are symbolic. They show employees that the company is aligned with their needs. That’s something that’s becoming more important to younger employees.
When you combine a tight labor market with a workforce that’s more willing to change jobs every few years, your employees naturally will focus more on their quality of life rather than advancement up the corporate hierarchy.
Show Millennials a path to advancement to keep them from leaving for perceived opportunities.
Cathy Shepard, Senior Principal at Mercer, said that it’s important to offer Millennials a clear path to advancement if you want them to stick around.
For this to be effective, you need to make career development part of your performance management program. For example, communicate to junior staff specifically what they need to achieve to get from Accountant I to Accountant II.
Promotions shouldn’t be time driven; they should be objective based. When you use tenure as the way to get promoted, you’re just encouraging your most talented employees to jump ship in order to get that promotion they’ve been yearning for.
Be willing to differentiate pay in your company.
Carl Schmitt (of Radford Consulting) said that if you want to have the best team, you need to do pay differentiation. All the top performing organizations do it.
What’s pay differentiation? Also known as merit pay, it means having the ability and willingness to differentiate employees based on their individual performance. If one employee is making a contribution five times greater than a typical employee, you should be willing to pay them significantly more than a typical employee with the same job title.
Now, if you’re going to do pay differentiation based on employee performance, you need a way to measure it. The problem is, accounting and finance teams often have trouble measuring performance in a meaningful way.
Want to attract and hold onto top accounting talent? Implement close management software.
If you’re looking to make your accounting department more attractive to recruits and current employees, consider implementing close management software. Here’s how close management software helps with all three of the above takeaways:
- Enabling work-life balance, flexible schedules, and remote work — With cloud accounting technology, there’s no reason employees have to be in the office to get work done. Combine a cloud general ledger, document storage, and close management software to enable your team to leave work at 5 pm, even during the close.
- Showing the path to advancement — With your entire close checklist in one place, it’s easy to show your staff just what it takes to complete the monthly close. Instead of focusing on tenure, define the path to promotion based on mastery of various elements of the close. Having each task defined and documented makes it easy to cross train staff or reassign tasks as needed.
- Enabling pay differentiation — When you’ve got all your checklist items and reconciliations in one place, you can finally see just how much work is on everyone’s plate. You might be surprised at how many complex reconciliations that the top employee is doing compared to the rest of the team. With FloQast’s Close Analytics module, you’ll also have visibility into who is completing tasks timely versus late, and how often. Use it as a tool to differentiate your top performers from the rest of the pack and reward accordingly.