A pending shortage of accountants and lawyers could drive up the cost of business
Canadian businesses are increasingly relying on professional services firms to enhance competitiveness and growth. Unfortunately, the increased demand and an aging workforce have made finding qualified professionals — such as lawyers, accountants, architects, engineers and marketing consultants — the number one stressor for these firms, a recent report found.
“The professional services sector has indicated that in the next three to five years they’re going to have significant growth, the same growth they’ve experienced over the last five years,” said David Blom, partner at Halifax-based accountancy firm Grant Thornton, which sponsored the report. “The combination of the demand and shortage of the supply is going to create a problem in meeting the needs in the professional services sector.”
Of 101 professional services firms surveyed for the report, Professional Services Insights 2005, 78 per cent said they expect revenues to continue to grow over the next year and more than one-half expect to increase hiring. However, 42 per cent of respondents said difficulties in finding and retaining skilled employees limits their business’ growth potential.
In accounting, part of the problem stems from fewer students entering the field of study, said Blom. That’s not the case in the legal field. Rather, “law firm leaders worry more about retaining talented young associates,” said Deborah Bowden-Jones, managing editor of Lexpert Magazine, a Canadian legal trade publication.
“A law firm invests a lot of time and effort recruiting law students, but the reality today is that there’s a lot of movement among firms. It’s not about having enough lawyers; what I’m hearing is that it’s trying to keep the high potential ones who can ultimately move into senior positions within the firm.”
The overwhelming majority of respondents, 92 per cent, said a firm’s corporate reputation is key in attracting and retaining top talent. However, an employee’s definition of a good corporate reputation is changing, said Blom.
The next generation is looking for companies that provide training and mentoring for top performers, that clearly communicate core values and goals, and allow employees to achieve good work-life balance, he said.
“Those are very different than what the baby boomers were looking at when they were coming through, which I understand to be career advancement and cash rewards.”
This generational difference means that firms need to listen to younger employees and find out what they want and what motivates them, said Sally Scotland, national HR manager at Grant Thornton.
“The secret to success isn’t in the compensation packages,” she said. “It’s in creating work environments that are great places to work and meet the needs and the interests of the people we’re trying to attract.”
At Grant Thornton, employees are asking for more challenging work and more opportunities for professional advancement, while ensuring they’re able to maintain a personal life, said Scotland.
Traditionally there hasn’t been good work-life balance in professional services firms and this has hurt the sector’s ability to attract younger talent. To overcome this challenge, firms need to focus on productivity rather than hours worked, she said.
Once a firm finds a qualified professional, it’s important to keep that person on staff because replacing a senior manager in an accounting firm can cost up to $200,000, said Blom. “It’s much more cost effective to put plans in place to keep the people you have,” he said. “Professional services firms are facing an era of growth, and in order for them to become leaders in their industry they need to invest in HR policies and benefit plans to ensure that they attract and retain the best people they can.”
Scotland warned that problems recruiting and retaining professionals will translate into higher costs for clients.
“If you have a hard time recruiting and retaining the people that you need, that’s expensive to your business. The turnover itself is expensive to your business. In turn it drives the price up of the professional, driving the price up for the client.”
“The professional services sector has indicated that in the next three to five years they’re going to have significant growth, the same growth they’ve experienced over the last five years,” said David Blom, partner at Halifax-based accountancy firm Grant Thornton, which sponsored the report. “The combination of the demand and shortage of the supply is going to create a problem in meeting the needs in the professional services sector.”
Of 101 professional services firms surveyed for the report, Professional Services Insights 2005, 78 per cent said they expect revenues to continue to grow over the next year and more than one-half expect to increase hiring. However, 42 per cent of respondents said difficulties in finding and retaining skilled employees limits their business’ growth potential.
In accounting, part of the problem stems from fewer students entering the field of study, said Blom. That’s not the case in the legal field. Rather, “law firm leaders worry more about retaining talented young associates,” said Deborah Bowden-Jones, managing editor of Lexpert Magazine, a Canadian legal trade publication.
“A law firm invests a lot of time and effort recruiting law students, but the reality today is that there’s a lot of movement among firms. It’s not about having enough lawyers; what I’m hearing is that it’s trying to keep the high potential ones who can ultimately move into senior positions within the firm.”
The overwhelming majority of respondents, 92 per cent, said a firm’s corporate reputation is key in attracting and retaining top talent. However, an employee’s definition of a good corporate reputation is changing, said Blom.
The next generation is looking for companies that provide training and mentoring for top performers, that clearly communicate core values and goals, and allow employees to achieve good work-life balance, he said.
“Those are very different than what the baby boomers were looking at when they were coming through, which I understand to be career advancement and cash rewards.”
This generational difference means that firms need to listen to younger employees and find out what they want and what motivates them, said Sally Scotland, national HR manager at Grant Thornton.
“The secret to success isn’t in the compensation packages,” she said. “It’s in creating work environments that are great places to work and meet the needs and the interests of the people we’re trying to attract.”
At Grant Thornton, employees are asking for more challenging work and more opportunities for professional advancement, while ensuring they’re able to maintain a personal life, said Scotland.
Traditionally there hasn’t been good work-life balance in professional services firms and this has hurt the sector’s ability to attract younger talent. To overcome this challenge, firms need to focus on productivity rather than hours worked, she said.
Once a firm finds a qualified professional, it’s important to keep that person on staff because replacing a senior manager in an accounting firm can cost up to $200,000, said Blom. “It’s much more cost effective to put plans in place to keep the people you have,” he said. “Professional services firms are facing an era of growth, and in order for them to become leaders in their industry they need to invest in HR policies and benefit plans to ensure that they attract and retain the best people they can.”
Scotland warned that problems recruiting and retaining professionals will translate into higher costs for clients.
“If you have a hard time recruiting and retaining the people that you need, that’s expensive to your business. The turnover itself is expensive to your business. In turn it drives the price up of the professional, driving the price up for the client.”
