An edited version of this article was originally published on Accounting Web.
Accountancy is known to be a notoriously stressful profession, with a high turnover rate & commonplace incidents of burnout amongst staff.
According to LinkedIn data, professional services have the fourth-highest turnover rate of any industry at 11.4%, behind low-level retail workers, and the high-demand technology and entertainment sectors.
Similarly, an Inside Public Accounting survey found that turnover in large accounting firms whose revenues exceed $75 million is 17%, and one in every six firms experiences annual employee turnover of 20% or greater.
“Climbing the ladder is central to the unrelenting competition in accountancy,” said Martin Kennedy, business analyst at intelligent resource planning software firm, Dayshape. “There are a lot of very talented, very ambitious people trying to make it to partner within these firms.”
While existing employees are trying to impress their peers and stand out, the field gets increasingly crowded, causing a squeeze at both ends.
“Every year there is a large new intake of employees too, so there is added pressure from all that new blood,” said Kennedy, an alumnus of two Big Four firms. “There is increased competition for limited roles, so you need to be seen to be progressing. This pressure causes some people to jump ship to another Big Four firm, while others will leave because it’s exhausting.”
But it’s not just the pressure that’s the problem. Research into the demographics of accounting turnover also show that a combination of exceptionally long hours and project assignment bias, along with the limited opportunity of becoming partner, is leading women and minorities to leave a firm, on average, earlier than their older, white male colleagues, contributing to a less diverse workplace.
Industry associations are starting to push the message that accountancy is no exception to other high-pressure industries, and the onus is on companies to help their employees out.
Encouragingly, there are signs that smart technology can help tackle the ‘always on’ culture, by introducing intelligent workflow planning and scheduling that better spreads the burden across a firm, resulting in a happier, less stressful workplace that is best placed to retain its talent.
Although the two are often confused, stress is everywhere and can be a regular part of any job, and indeed some of us work better under the mild stimulus of pressure.
However, when the line is crossed and stress becomes problematic. This often leads to burnout, which is completely dysfunctional, associated with poor physical and mental health, workplace discord, and generally considered to be a precursor to job turnover.
Stress often peaks around the year-end, and in the case of audit firms there is also added competition that requires adjusting budgets to be competitive, reducing implementation times.
There are demands on accountants and auditors that are unique to the profession, especially the consideration they must be both independent and sceptical whilst simultaneously maintaining a close business relationship with their customer.
Accountants are also often further incentivised to maintain healthy ties because the customer may be their next professional destination.
This combination of tight deadlines and a high volume of work ensures overload is a stress factor widely cited as a reason for burnout in the professional accounting environment.
The costs of high turnover
Practitioners have long noted that firms in every sector lose the costs of training employees who leave, and it is a well-worn human resource management mantra that to replace an employee can cost between 50 to 60% of the salary of retaining an existing one.
When the revolving door rotates at this rate, with up to a fifth of the workforce leaving each year, the reputation of the sector at large, and the quality of the work performed, can only decline.
In the accounting world, experienced auditors have received specialist training in the technical aspect of the job, and are subjected to a variety of audit clients that allow them to gather insights across multiple industries, business models, and operation systems.
The cornerstone of audit quality, professional scepticism, is also developed and improved through the accumulation of audit experience.o, when added together, there is little wonder why firms are constantly searching for ways to keep hold of their valued employees.
Presenteeism and ‘always on’
The significance of wellbeing in the workplace cannot be overstated, and the World Health Organisation has predicted that the biggest disease burden for developed countries by 2030 will be mental ill-health.
The figures are startling. According to Deloitte, poor mental health costs UK businesses up to £45 billion a year, which has risen 16% since 2016, up £6 billion a year.
Deloitte’s analysis suggests more people with poor mental health are continuing to work when they are not at their most productive, rather than take time off, highlighting presenteeism as characteristic of an ‘always-on’ culture.
“Our research finds that, while increased use of technology can enhance working practices, having the ability to work outside of normal working hours can add to the challenge of maintaining good mental health, and make it hard for some to disconnect from an ‘always-on’ culture,” said Elizabeth Hampson, Deloitte director and author of the report.
This appears, at least anecdotally, to be prevalent in large accounting firms, where taking time off may be viewed as a weakness, and that presenteeism and showing up regardless of how sick you are may be perceived as expected.
“People are in environments where those around them are working very long hours, and it does have an effect,” said Kennedy. “Perhaps some don’t realise that they are setting an example. People start thinking; ‘Should I be doing that? Working 70-hour weeks?’”
It is counter-productive, however, as presenteeism costs firms 10 times more than absenteeism, according to a report by Global Corporate Challenge (GCC), which analyses corporate wellness in 5,500 of the world’s leading companies across 185 countries.
The report found that while employees were absent from work an average of four days per year each, they confessed to being unproductive on the job for 57.5 days each, which accounts for almost three working months.
“For every one day off sick, employees waste 10 more doing very little,” said data scientist and report author Dr Olivia Sackett.
Smarter, employee-friendly scheduling
A recent report in the Journal of Accounting found that smarter employee-friendly scheduling procedures can increase productivity, make companies happier places to work and go some way to retaining talent.
“It appears that improved communication and operational protocols may be key to unlocking the true retention-promoting potential of flexible work programs,” said report author Margaret Knight, CPA, CGMA, DBA. “Firms are offering alternative work opportunities to combat turnover and foster the type of flexible culture that is needed to secure loyalty.”
Intelligent scheduling is being used to free up resources where outdated planning techniques are repeating the same mistakes and ensuring some individuals are completely overloaded. The technology also adds transparency to the system to allow for a healthier spread of work.
Technology that can redistribute work during the busy season can have an enormous impact on both the bottom line and the morale of a workplace.
Such a system may take advantage of the cultural differences inherent in global teams, perhaps by shifting certain work over to colleagues in other parts of the world with different seasonal work patterns.
Smart technology can also be used to ensure employees get more of the work they need to develop professionally. Using software which can automatically weigh in employees’ preferences and development needs in making assignments can lead not only to better staff retention, but improved compliance, and client service.
“For people who schedule work, and this includes directors, it takes a lot of late nights and is an enormous burden,” said Kennedy. “Technology exists now that is clever enough to work out who is available and best suited to do the work. When firms see the improvements to profitability, client delivery, and staff retention by augmenting scheduling with automation, they are often shocked; it makes a huge difference.”