There is little doubt that a CPA firm's greatest asset is its human resources. Attracting and retaining the brightest and best from the workforce is the key to a firm's success. Recently, a growing concern for the accounting profession has been how to adjust to a shift in employee attitudes and perceptions while still maintaining client service. This article suggests that employers consider nontraditional scheduling as one method to help alleviate this problem.

Background

The accounting profession is undeniably undergoing a period of change. Firms and their employees are faced with greater demands manifested in various forms: a proliferation of new technical standards, the expansion of CPA firm services, increasing business complexity, and the impending adoption of the 150 hour requirement by the AICPA.

At the same time, factors outside the accounting profession are negatively impacting employee recruitment and retention. The changing nature and composition of the workforce suggest that employees may be less willing to spend as much time at work as their predecessors. Thus, without adjustments in personnel policy, the already high turnover rate many CPA firms experience may worsen. Additionally, evidence suggests that both the number and quality of graduates from university accounting programs are declining. These converging pressures place greater strain on both CPA firms and their employees, and may have a negative impact on the number of new entrants into the profession.

Well-developed company policies providing for nontraditional scheduling could be the catalyst for CPA firms to attract and retain high-quality employees. The following examines forces that impinge on the profession and explores the application of nontraditional scheduling to public accounting.

Turnover--A Perennial Problem in

Public Accounting

Excessive turnover has historically posed a concern for CPA firms. Clearly, some attrition is desirable, but excessive rates result in both a critical loss of expertise for the firm and additional out-of-pocket expenditures for recruitment and training.

It is an accepted truism that job satisfaction is inversely related to turnover. Thus, a logical approach to reducing turnover involves studying job satisfaction--specifically, why employees leave public accounting and who may be more likely to leave. These research efforts often yield conflicting results. Some studies show higher turnover rates for women and individuals with advanced degrees; others suggest that these differences no longer exist. Most studies on turnover statistics indicate that approximately half of the new hires have left by somewhere around the three-year mark.

Factors found to influence individuals in their decisions to leave public accounting include better opportunities elsewhere (either in salary or opportunity for advancement), the environment of public accounting (nature of the work, working conditions, etc.), personality traits of the employees, and how well the individual perceives that his/her current position is meeting future career goals and aspirations. The noteworthy point for firm management is that the majority of factors cited as reasons for turnover are controllable to some degree by the firms. The key is to focus human resource efforts on the "fixable" problem areas.

Changing Nature of the Workforce

Evidence suggests that individuals currently entering the workforce are motivated by different values than the previous generation. Many "baby-busters" (men and women born after 1964) place more emphasis on having both a successful career and a rewarding personal life. Not that this represents a lack of job commitment by younger employees--to the contrary, most of them are quite dedicated--but they tend to be less willing than their predecessors to sacrifice family and personal interests for the sake of their careers.

Considering that between a half-million and a million fewer young Americans will start to work each year through the end of the century than in the 1970s, firms cannot ignore the baby busters' sentiments. The profession must be willing to put into place human resource policies that will counter the "sweatshop" image that many young people have of public accounting. The following quote from the Wall Street Journal summarizes this demographic imperative:

"In the 1950s, he graysuited, security-minded Organization Man became a corporate archetype. In the 1960s and 1970s, it was the socially responsible corporate do-gooder. But specialists in management, including executive recruiters, human-resource executives and academics, say none of these changed the tone of corporate life as much as the baby-busters may change it."

Supply and Demand: Quantity and

Quality Concerns

According to a recent report from the chief executives of the then-Big Eight firms, the imbalance of supply and demand for accounting graduates is a significant problem for the profesion. This report also notes that while the number of those entering business schools has grown significantly, the proportion of those students choosing accounting as a major has declined. Further, evidence based on college entrance exams (e.g., SAT math scores) of CPA exam candidates suggests that the quality of accounting students has also declined. The current state does not bode well for the future of the profession. However, to the extent that accounting is losing better students/employees because other careers look more enticing, CPA firms still have the chance to "win back" high- quality individuals.

Considering Alternative Work

Schedules

Ongoing changes in employee needs, expectations, and demographics merit a firm's consideration of alternative work schedules.

The phrase "nontraditional scheduling" has varying connotations encompassing many work options, both full-time and part-time. Some of the alternatives described have been successfully utilized by large firms. However, they merit equal consideration by small- and medium- sized firms because most involve little or no incremental cost to the firm, yet provide significant benefits to employees.

Full-Time Options. A concept long utilized by many CPA firms is the variable day, or leisure bank, concept. Employees accumulate overtime hours to be taken as time off during nonpeak periods. This approach appeals to both employers and employees because it negates some of the personal sacrifices employees have to make, particularly during busy season, with little cost to the employer.

In what is popularly known as "flextime," the employee chooses his/her own hours around a designated core period. CPAs involved in auditing must arrange the bulk of their workload around the client's hours, but that does not preclude some flexibility. In most audit engagements, the auditors can arrive before the client's regular business hours and/or stay after the client closes for the day. As long as the staff is adequately supervised, this arrangement should pose little disruption in the work schedule.

For out-of-town assignments, the audit team might choose to compact the work week into four days, leaving Friday for the employee's personal time. This option generally benefits everyone concerned; travel costs are reduced from five days to four days, and employees normally do not object to working longer hours while they are away from home, especially with the lure of a day off.

For employees involved in tax, consulting, or personal financial planning, there is even greater opportunity for working at nontraditional times. For instance, an employee could feasibly choose to do tax research at 2:00 a.m. or at 2:00 p.m. Obviously, empolyees must be availabel to meet with clients during regular hours, but the time of day that much of the work is accomplished is irrelevant.

An increasingly viable consideration, sometimes called "Flexplace," allows staff members to perform some work at home. Obviously, the work necessitating interaction with clients and other staff members is not suited for this arrangement. Given adequate communication access and computer resources, the list of feasible tasks can be substantial. Some combination of flextime and flexplace could provide a particularly attractive alternative for employees.

Part-Time Options. Other options entail less time on the job than is considered typical in public accounting. Although the part-time possibilities may be a lure in recruiting new hires, most likely these plans will aid in retaining employees who might otherwise leave public accounting because of the time demands. Some employees may opt for permanent part-time positions, but many will only temporarily need to reduce their work-load--for example, while starting a family. Firms can respond to these needs by reducing either the number of days worked per week or the number of hours worked per day.

Another approach that some firms have successfully utilized is allowing the employee to service some designated number of clients--the agreed upon number would be less than the employee's normal load. The employee in turn commits to handling the needs of those clients, regardless of the amount of time required during a given period.

A key ingredient in the success of these part-time options is accessibility when the employee is not "on the job." Further, all participants must come to accept that accessibility does not have to be in person. As a practical matter, there is little difference between calling a staff members who is available at home or calling that same individual at another client location.

Short-duration personal leaves are also a viable option. Many firms have started in this direction by offering parental leaves, but the scope should be expanded to accommodate employees' other personal interests. An inherent advantage public accounting has is the seasonality; many firms are least busy in the summer months when time- off choices for most employees are at a peak. By providing two or three month summer leaves, or even offering ten-month employment to some staff members, firms could sumultaneously reduce salary costs and provide a valuable employee benefit without impairing client service.

Targeted Employees

In recent years women have comprised a steadily increasing proportion of the graduates from university accounting programs; the number now stands at approximately one-half. In response to this demographic shift, many firms have utilized nontraditional scheduling on a limited basis by allowing flexibility for female employess with young children. Although this approach is a valid start, it has two flaws. First, by only targeting women, firms assume that women are the only ones interested in flexible work options. Thus, they stand to lose (or never even hire) valuable male employees who also desire more personal time.

A related problem is that nontraditional scheduling may take on the appearance of a "woman's perk." Firms targeting only women may, intentionally or not, conclude that women are less committed to their careers than their male colleagues. In reality, research suggests that there is little difference between men and women in their dedication to their careers. However, perceptions can often be more important than facts; one study found that only about half as many men as women surveyed believed that women have the same level of commitment to a public accounting career as men do. Firms targeting non-traditional work options primarily toward women may be unwittingly perpetuating these disparae perceptions.

Although parents with young children are an obvious target group, other employees may also be interested in spending less time on the job. For example, dual-career families with or without children may simply want and be able to afford more leisure time. Older employees who have established their careers but want to spend more time on philanthropic or civic pursuits might welcomes a nontraditional schedule. Other interested group, potentially either younger employees with career uncertainties or older employees nearing retirement, might want flexible schedules to pursue educational goals or non-conflicting business opportunites.

Nontraditional Scheduling: The

Pitfalls

A number of studies on nontraditional scheduling in other industries provide strong support for its use. Advantages cited include greater productivity and time efficiency, improved morale and job satisfaction, and less absenteeism and turnover. But nontraditional scheduling, particularly the part-time version, is not problem-free.

Work Environment. One of the greatest pitfalls of nontraditional scheduling is the climate that results when supervisors do not embrace the new option. Many employees now in supervisory positions were required to work "regular hours," and thus they may resentr new flexibility available to younger staff members. Unfortunately, there is abundant anecdotal evidence of employees who did not utilize a flexible plan because they feared that it would be the "kiss of death" for their careers, as well as employees who did take advantage of an option only to return and find that their career had in reality been derailed. Firms must guard against thinking that time spent in the office equals job commitment. Most importantly, this cannot be merely a written policy--it must be a reality at all levels of the firm.

Women have frequently faced this perceived lack of job commitment because traditionally they have had primary responsibility for child- rearing. Yet, the threat may be even more serious for men because it is not considered "normal" in many organizations for men to be involved in family concerns. Recent studies indicate more "stress equity" between the sexes; men in the workforce report a growing amount of stress as they attempt to mesh career and family obligations. The climate of the firm must be conducive for all employees to fulfill both their personal and career aspirations. Firm human resource executives must be willing to accept that personal time is not a gender issue--it is a broad-based personnel concern.

Supervisory Issues. As a practical matter, supervising employees who are not on a traditional schedule may create new problems. Management must also ensure that the compensation and promotion structure is equitable for both full-time and part-time employees. Specifically, policies on issues such as raises and promotions for part-time employees must be formulated.

Client Service. A key issue in the success of any personnel policy is meeting client demands. Futher, client needs should be met without undue hardship on traditional employess. If a part-time employee's client encounters an unexpected crisis, that employee must be flexible enough to ensure that client service is not impaired.

Staff Availability. A major practical obstacle to adopting nontraditional scheduling is availability of personnel. How can employees work fewer hours while the pool of quality employees is shrinking? One solution is to form a reserve pool of temporary/part- time workers, possibly from former employees and retirees. One firm reported hiring former employees for a specified number of hours per week during busy season to relieve the burden on the regular staff. A long-term objective is that firms utilizing nontraditional scheduling will attract more quality employees, thus making the plan feasible.