REDUCE TURNOVER WITH REALISTIC JOB PREVIEWS

By Patricia G. Roth, CPA, Deloitte & Touche, and Philip L. Roth, Clemson University

Employee turnover is a persistent and expensive problem for public accounting firms. Turnover rates for staff and senior accountants are typically 25% per year, and each separation costs firms $4,000 to $8,000 in training and recruiting costs. The cost of losing outstanding accountants also extends to losing the value of their superior performance. While some accounting firm managers feel low levels of turnover help to keep a flow of new talent into the organization, there is no question that excessive turnover takes a severe toll, especially during peak periods. Some human resource managers use a technique called the "realistic job preview" (RJP) to reduce turnover.

What Are Realistic Job Previews?

RJPs are any method to give recruits a balanced picture of the job they are considering for employment. RJPs are typically brochures, videos, or personal presentations that inform recruits about both positive and negative aspects of the job. Positive aspects might include training and development opportunities, interacting with interesting and influential people, and the opportunity to use their acquired accounting skills. Negative aspects might include long hours during busy season, frequent travel, and repetitive tasks. Based on a complete job description, recruits form an accurate and realistic picture of the job.

The RJP approach differs from the traditional sales approach of emphasizing only positive job aspects. The traditional approach might point out that staff accountants have frequent contact with client personnel‹the emphasis on working with new and interesting people. The RJP approach would add that client personnel can become frustrated with continual requests for documentation. The staff accountant is then faced with finding a way to win their cooperation while maintaining good relations.

Realistic Job PreviewsÑThe Bottom Line

The primary benefit of using RJPs in the recruiting process is a decrease in turnover. According to S.L. Premack and J.P. Wanous in a 1985 Journal of Applied Psychology, a firm with an initial turnover rate of 50%, using RJPs should result in a turnover rate of 38%, a decrease of 12%. Firms with 25% turnover should be able to reduce their levels to between 15% and 20%. A reduction in turnover of one staff and one senior accountant at a firm would result in training and recruiting savings of approximately $12,000 to $14,000. It is important to note that these figures are conservative since they include only direct training and recruiting costs such as hiring recruits and sending them to training seminars. They do not include the costs resulting from the lower level of performance of replacement employeesÑthe learning curve.

The cost of obtaining these savings is usually small. Using a brochure to convey a realistic job preview can be inexpensive and could be used by local, regional, or national firms. Devoting a part of the on-campus interview to an RJP is also inexpensive.

Video presentations cost more money, but regional and national firms may have one video produced for all of their offices. The cost would then be defrayed by the decreased turnover at multiple offices. In a regional firm with five offices, the benefit of an RJP program could conservatively be $300,000 if it decreases turnover by one senior and one staff person each year at each office for five years. Benefits could be much larger for a national firm.

How Realistic Job Previews Work

Human resource managers believe RJPs work in several ways. Some recruits will recognize that the job does not meet their needs even before interviewing. RJPs reduce turnover by helping recruits develop more accurate initial job expectations. Experience on the job, consistent with expectations causes people to stay with the firm, while employees with high expectations that are subsequently jolted by the reality of the job often leave. And, RJPs help employees cope with job demands simply by giving them an awareness in advance.

How to Develop and Implement Realistic Job Previews

Incorporating RJPs into a firm's recruiting process is fairly straightforward.

Gather Information. Gathering information for the RJP involves three phases. First, the firm must decide whether to gather information in a formal or informal process. We recommend an informal or unstructured process for small firms or individual offices of a regional or national firm. A typical, unstructured process entails interviewing a small group of employees, possibly in groups. The employees answer questions about the best and worst parts of their positions. This process is relatively inexpensive and can be completed in a matter of days. The resulting information is adequate for purposes of most RJPs.

Some firms, more particularly the nationals, may want to use a formal or structured process, which usually involves administering a comprehensive questionnaire to a large, representative group of employees. The responses are then quantified and statistically analyzed. A structured process is more costly and can take several months to complete.

Second, members of the firm must determine which sources of information to examine. Sources include written job descriptions, newly hired staff accountants, former staff accountants, and senior accountants. Accountants might discuss what they did not know when they accepted the position or what job experiences came as surprises. RJP information should be gathered from as many sources as possible to produce an RJP that is complete and credible. If costs dictate that only one or two sources can be used, conversation with current and former staff accountants may suffice.

Third, members of the firm must decide whether to include both descriptive and judgmental information. Descriptive information is factual. Examples are salaries and benefits, average raises, working hours, and overtime. Judgmental information is perceptual; it focuses on how employees feel about various aspects of the job. Employees might describe how "wrung out" they feel after busy season or how exhilarated they feel after a big push.

RJPs should contain both types of information. The descriptive information lays the foundation of a recruit's understanding of the job. The judgmental information helps the recruit interpret the descriptive information. More importantly, the judgmental information focuses on how employees feel about the job, which affects turnover.

Determine How to Present the RJP. There are several ways to present RJPs. All have been shown to be effective in reducing turnover.

The most common method is a written brochure. Brochures can be inexpensive, easy to change, and read by a recruit multiple times. They are, however, somewhat impersonal and cannot be tailored to match the needs of individual recruits.

Video presentations help ensure that recruits are exposed to the RJPs and may be more personable in nature. Using real staff accountants (as opposed to actors) in the presentation enhances RJP credibility. On the other hand, videos tend to be more expensive, difficult to change, and also, cannot be tailored to individual needs.

The final method is a face-to-face discussion, typically with one of the firm's current staff accountants. Face-to-face discussions have the advantages of being personable, credible, and easily tailored to meet the needs of individual recruits. However, these discussions are time consuming and their content will vary from staff accountant to staff accountant.

Decide When to Present the RJP. The decision when to present RJPs is critical. Firms should introduce them prior to making job offers. If RJPs are presented after making job offers, recruits may have already made a decision or feel committed because they have invested so much time and effort in the firm.

Presenting RJPs before the interview process tends to be more effective since recruits are not so committed that the RJP cannot function properly. Presenting them concurrent with the interview process is less expensive.

A Spirit of Realistic Job Previews

The "spirit" of RJP should be present during all phases of recruiting, e.g., social hours at Beta Alpha Psi and the Accounting Club, on-campus interviews, and office visits. The RJP spirit is one of openness, honesty, and candidness. Its purpose is to help recruits develop an accurate and realistic picture of the position of staff accountant. Receiving the RJP message from various sources will enhance the understanding and credibility of that message.

Each firm will want to identify their own way to convey the RJP spirit. One practice is for staff accountants to act as contact persons for recruits throughout the entire process. The personal relationship may help recruits feel comfortable asking sensitive but important questions. Another idea is to invite the more promising recruits to spend half a day on an audit or in the firm's tax department. Recruits can observe and possibly participate in real staff accountant tasks. If a firm decides to involve staff accountants in recruiting, some training or instruction should be given to them so they understand the purpose of the RJP approach. *

Editor:
Michael Goldstein, CPA
The CPA Journal

SEPTEMBER 1995 / THE CPA JOURNAL