This article originally appeared in the January 2024 edition of INSIDE Public Accounting Monthly. To subscribe click here.
A new survey has revealed the six top reasons accounting and finance employees leave their jobs (in priority order): salary, too many hours/burnout, lack of work-life balance, workplace culture, lack of advancement opportunities and work is uninteresting/mundane.
This is according to the Illinois CPA Society (ICPAS), which surveyed 449 employers and 433 accounting and finance employees last summer and released its results this week.
“The leading reasons talent cited for leaving their organizations shouldn’t surprise anyone familiar with the challenges facing the profession, but it’s our hope that the candid feedback from both employees and their employers will spur renewed action to rein in turnover,” said ICPAS president and CEO Geoffrey Brown.
The report, “Righting Retention,” not only dives into the factors driving perpetually high turnover from the perspective of employees and employers, but also outlines several actions that can be taken to help improve talent retention.
The situation is dire. The report, citing a September 2023 Robert Half survey, noted that 41% of accounting and finance professionals are either looking for a new job or plan to start looking by the end of this year. High turnover is not only bad for business and for firm reputations, it’s also squeezing those who are left, with about 77% of public accounting firms reporting a heavier workload on firm leaders. With the well-publicized pipeline problems plaguing the profession, retention is more important than ever, the report asserts.
Turnover Averaging 15% Nationally
According to the 2023 IPA Practice Management Report, turnover across all 600 firms in the survey averaged 15%; 84% of that is voluntary. Turnover is even higher about the IPA 100 firms, at 16.3%.
The ICPAS reports that the global professional services industry averaged annual turnover of 13.4% in 2022. That percentage compares with 10.6% for all industries combined, according to global LinkedIn data.
About 42% of public accounting firms in the survey said their turnover is rising. “Surprisingly though, about 56% of the public accounting firms responding to our survey in the fall indicated that they’re experiencing turnover levels of 10% or less,” the report said. “Still, nearly 20% are realizing turnover levels between 11%-20%, approximately 7% are experiencing 21%-30% turnover, and almost 4% are victim to turnover of 30% or greater (about 14% were unsure of their turnover levels).”
The survey asked employers about when the most turnover is occurring, and 71% says it’s among employees with between one and six years of experience; 44% stay with their employers for just one to three years.
Employees and Employers Have Different Views
Where are resigning employees going? About a third of employers said they’re leaving the accounting and finance profession altogether, but the survey didn’t bear out that perception. Among the employees ICPAS surveyed who said they’ve left their employers within the last two years, nearly 62% left for new positions with public accounting firms. Another misconception arises when it comes to job hopping, the report said. Most employee respondents have had only one (39%) or two (approximately 28%) employers since entering the accounting and finance profession.
“So, what can employers take from these findings? The profession’s higher-than-average turnover isn’t really about talent not wanting to work in accounting and finance anymore; it’s about employees wanting to find employers that work for them,” the report said.
First Look at Compensation
The employees and employers are divided when it comes to the top reason for quitting. Employers believe salary is the third-highest reason for resignations, but employees say it’s No. 1. The top benefit employees seek is salary, by 92%. While 64% of the employers surveyed said they’ve increased employee compensation to improve employee retention since COVID, salaries are still lagging, the report says.
The latest IPA data shows average compensation (excluding the 10% largest and 10% smallest numbers) is $61,788 for 0- to 2-year staff in 2023 and $58,395 in 2022. ICPAS says Robert Half’s salary projections peg increases in starting salaries in tax services to increase 3.6% on average, while audit and assurance services positions will see starting salaries rise an average of 3.8%. A more optimistic projection – 5% – comes from the LHH Recruitment Solutions’ 2024 Salary Guide.
Burnout Driving Professionals Elsewhere
The No. 2 reason for employees leaving their jobs is “too many hours/burnout” (nearly 49%), which was closely followed by the third most cited reason for quitting: “lack of work-life balance” (about 48%). In this case, employers were aligned with employees. They too, recognized the problem. Employers ranked “seeking more work-life balance” as the top reason, followed by “wanting to work fewer hours/avoid burnout” and “salary” being the third reason.
To combat the burnout, professionals are seeking flexible work arrangements on when, where and how they work. After salary, employees responding to the ICPAS survey ranked “flexible hours” and “remote work” as the No. 2 and No. 3 most attractive employer benefits.
That data shows that return-to-office mandates could backfire, the report suggests. “The accounting and finance profession can’t really afford to claw back the flexibility talent was afforded in the pandemic’s wake. Doing so would clearly threaten the retention of all talent to some degree, but it could be especially detrimental to women and underrepresented individuals – two groups the profession has historically struggled to retain and advance.”
The next three reasons professionals leave their jobs are connected to firm culture – “workplace culture” (No. 4; about 36%), “lack of advancement opportunities” (No. 5; just over 25%), and “work is uninteresting/mundane” (No. 6; nearly 21%). Gallup studies suggests that fewer than 25% of employees are truly engaged at work.
Firm Leaders May Be Overlooking the Obvious
Leaders may be missing warning signs of possible resignations, the report says. Some 28% failed to ask employees what benefits they value most; nearly 48% of employers don’t (or don’t know if they do) communicate defined advancement paths for employees; almost 43% don’t (or don’t know if they do) offer a mentorship program, either formal or informal, to foster employee retention.
Again the survey found a disconnect. About 67% of employee respondents view “career advancement paths and opportunities” as one of the most attractive benefits in an employer, while nearly 30% ranked “mentors/mentorship program” as a top attraction.
Clearly a communication breakdown is at work here. The report suggests employers connect regularly with their employees about what matters to them in “stay interviews.” A report by Gallup suggests questions include:
- What do you love about working here, and what should we keep doing?
- What do you not like about working here, and what should we stop doing?
- What needs to change, and what should we start to do?
“After all, a simple conversation could be all that’s needed to stop a star employee from quitting, or it could form the foundation of a new strategy or policy that greatly improves organization-wide culture, engagement, and – hopefully – retention,” the report concludes.
