Recently I ran a ‘Succession Insights Poll’ in New Zealand, with 441 accounting firms participating.
The most thought provoking question raised during the post-poll webinar was ‘What happened to all the Young Guns coming through; where are they and why do they not want a career in this industry?’
Defining the 'Young Gun'
Let’s start this discussion by defining the skills and attributes of today’s (not yesterday’s) Young Gun. Here’s my pick:
- Very good accountant. Notice I did not say brilliant. We won’t be needing human calculators.
- Ability to numerate. Basic really.
- Rounded tax knowledge. Competent, yet self aware (knows when to call in the experts, often outsourced).
- Good communicator. An able mentor, coach and presenter.
- Can sell, with training. Uses a ‘problem solving’ sales style.
- Commercial. Can speak wider than the numbers.
- Has empathy. Appreciates a client’s position and is prepared to help improve it.
Our industry has long overplayed the first three in the above list and now faces a gross underinvestment in the last four. This is at the root of the dearth of talented accountants who are suitable AND have an appetite for ownership in an accounting business.
Where are they?
They’re out there, but not in droves. Many of them have been attracted to the bright lights of the commercial sector. Public practice has little appeal to them. Ask them why and they’ll cite remuneration, lack of opportunity and a perception that work in an accounting firm is one dimensional (accounting and tax).
I could just as easily argue the opposite. Corporate life can be gruelling and the opportunity for real entrepreneurship is available to just a few. Public practice on the other hand offers a great lifestyle, the returns as an owner are significant, and the work can be as varied as you chose. Furthermore, you have an opportunity to design and redesign your business model; re-invention can be continuous.
Which brings me to where the rest of the Young Guns are. They’re in an accounting firm near yours. They’re getting the above opportunity and their skills in numbers four to seven of the above list are being honed. They’re not interested in legacy firms with traditional thinking and old technology. Most importantly, they’re not expected to ‘do their time’ in accounting and tax.
For them, that’s a prison without bars.
Some escaped. They set up their own firm. The barrier to entry (working capital) has all but gone. It seems easier to start with a clean sheet of paper than try to turn the mothership around, starting with its nice but fatherly (and sometimes motherly) directors.
From ‘Young Ones’ to ‘Young Guns’
Whilst it’s true that some accountants absorb the soft and the commercial skills better and faster (nature), Young Guns can and must be developed (nurture). In fact, better a malleable though naïve Young Gun than the cocky ‘I know it all’ type.
Don’t leave it to the professional bodies to do this on your behalf. If it were that easy, they would have done it by now. Instead, develop your own leadership and development programme, but by all means employ an array of education and content organisations to fill the gaps (no pun intended).
Very few accounting firms can provide the training required to transform a technician into a well-rounded business leader who can communicate and influence, motivate and manage, present and sell, as well as deliver services well beyond compliance. And, if they can, the internal investment will be expensive. Outsource this where you can. It’s cheaper.
Killing three birds with one stone
The solution to the Young Guns gap comes in three parts. At the base of each is the investment in new skills.
1. Retain the Young Guns you already have.
Sounds obvious, but do a reality check:
- Are they engaged in your core purpose and values and are you inviting them to contribute to your strategy?
- Are you delivering what you promised when you took them? If not, get to it. If your promises (skills development, client portfolio, entrepreneurship, ownership) were empty ones, they’ll already have one foot out the door
2. Attract new Young Guns and offer them an ownership model.
Be flexible about what that looks like. Shareholders don’t have to work the same hours, or own the same percentage of shares, and directors don’t have to take an equity stake, for example. Evolve from your outdated thinking.
Capture the Young Guns who have been mulling over going out on their own. The barriers to an accounting start-up may be low but the pain experienced in the first three years is usually underestimated (new processes, marketing effort, having to wear every hat in the business, working capital constraints). Offer them a strong back office so they can do the work they love and take a wide berth of things they hate such as onboarding, billing, collecting, HR. Ownership without angst.
3. Grow new Young Guns from within your team.
Yes, some of your accountants will want to stay as technicians in the back room. Getting them to make the grade on all seven of the skills and attributes list is a big ask. That shouldn’t stop you from investing in the 20% that do want to advance. Do not attempt to do all of this yourself. The people in your organisation most capable of teaching these soft skills are usually the rain makers.
In short, this is a numbers problem.
Where did all the young guns go? Some went to commerce, some went out on their own and some were snatched up by a firm near yours.
There are masses of future Young Guns being churned out by the tertiary institutions. As an industry we owe it to these people to show them a pathway forward or the dearth will continue. We have a ballooning demand and supply problem, with 38% of NZ owners looking to exit or retire within the next five years.
Ignore the problem and those looking to achieve their succession goals simply won’t be able to.
Retain, attract, grow. Needs must.