In the April issue of the IPA newsletter, we took a look at a pair of firms that have built their cultures around the notion of transparency with respect to plans, processes and firm performance. Both of these firms have found their commitment to openness to be beneficial in terms of culture and morale, but just how many of their peers are taking a similar approach?
One of the most common areas for firms to demonstrate transparency is in their sharing of financial information with staff, and data from IPA’s 2020 Firm Administration survey shows a wide range of openness across several metrics. Net revenue, for example, is one of the most commonly shared performance statistics, with 53% of all non-Big 4 firms opting to share this information with their entire staff – a number that jumps into the mid- to upper 60s for firms in several revenue bands.
Other metrics shared firmwide: Net revenue: 53% / Net revenue per hour: 22% / Utilization: 32% / Departmental utilization: 20% / Realization rates: 29% / Profit margin: 15% / Net income: 7%
Many other key metrics, on the other hand, tend to be made available only to partners and senior managers, including utilization (32% share with all staff), realization (29%), net revenue per hour (22%), profit margin (15%) and net income (7%).
As the past year has demonstrated, open communication and the sharing of information has never been more important – especially for dispersed workers. Will that experience spur more firms to make a commitment to increased transparency when it comes to their performance metrics and other key areas or will they continue to play things close to the vest?
The 2020 IPA practice management reports are packed with the information today’s firm leaders need to understand where they stand in the profession – and where they should be going. Give yourself a leg up on the competition – order your IPA reports today!