How companies can retain top talent during labor shortages
By Richard Lavine.
Today’s accounting world faces an unprecedented challenge: how can companies identify and retain top talent from a shrinking pool of accounting professionals, while avoiding the excessive burdens inflation?
What’s happening with the accounting industry is that we’re at a supply shortage. Inflation makes hiring accountants out of college more expensive, as previous earnings quickly become obsolete as new graduates seek higher-paying jobs. A seemingly ever-increasing rate of inflation makes it even more difficult for businesses to match higher wages without raising the prices of existing services.
The way accounting firms are built today is no different than the way it was created in the 90s, where you have a managing partner on top and interns/first-year staff on the bottom. Everyone wears multiple hats. Each individual does a different job together. In accounting firms, services are divided into two categories: consulting and compliance. When it comes to commodities, most people don’t realize that tax returns have such value, but the impact of rising inflation rates on the prices of these commoditized services and, in turn, on clients’ wallets, could scare away business.
In today’s industry landscape, we are increasingly seeing talented students wishing to enter the workforce seeking positions at a much higher salary than before. Accounting, in this vein, becomes less lucrative. That’s not to say that all junior staff start there; this is where most of the crunch is. Traditionally within accounting firms, the work distributed between employees is part of a broader relationship. Give work to lower employees, they learn to work and progress upwards and take on more responsibility. The cycle continues each year with new members of staff replenishing the previous group as they progress through the ranks of the company.
When graduates enter the job market, their eyes wander to the more lucrative opportunities and their attention streams off. Accounting firms, for this reason, are stuck in a difficult position. Given the current inflation we are facing and the supply of talented young college graduates who would replenish the employee hierarchy, they are looking elsewhere for higher paying jobs. It is more difficult for accounting firms to support interns and first-year staff.
Bookkeeping and preparation of tax returns are services that must be performed. However, unlike other industries, you cannot reduce accounting and taxes because you could lose customers and revenue. So what do companies do in this position where they cannot raise the prices of essential services to raise wages at all levels?
There is no indication that inflation will slow any time soon. Models indicate that it will be years before inflation slows to a reasonable rate. Thus, the cost of living continues to rise nationwide. In the meantime, alternative staffing solutions are ideal for businesses looking to free up work to give staff more time to deliver value to their customers and the business. Alternate staffing solutions are effective in that they provide the business with access to a fractional workforce that can settle accounting and tax jobs quickly and affordably. As the supply crisis tightens, we believe it will be a bigger player as fewer people enter the accounting industry.
This is where services like Taxfyle come in to help. Businesses are at a bottleneck where they can’t raise prices for accounting and tax services to match inflation because customers won’t come back. It is a sacrifice to the bottom line that is ineffective. By providing companies with labor that works at a lower rate, companies have access to tax professionals who spend their free time providing these commoditized services without the same companies having to hire full-time or part-time employees. partiel.
Companies can then devote their staff’s time to other value-added services such as consulting. This allows them to leverage their staff more effectively and leverage the business’s ability to grow as the outsourced work no longer takes up their staff’s time. It is the solution to increase income without worrying about inflation which increases prices and scares away business.
Richard Lavina is CEO and co-founder of taxfyle.