Suggested Solutions
Tom Steel has suggested some solutions, the focus on the ability of the firm to extend its client base, develop new areas of expertise and generally enhance its reputation in the marketplace. His suggestions are as follows:
- Tap into university graduate fairs to access the brighter students at the top management schools
- Develop a more positive profile in Trade Magazines
- Recruit on-line
However, it is not as simple as this. Accountco’s challenge is not simply to attract a large pool of applicants from which to select, but also to retain its experienced and knowledgeable human resource assets. Also, the firm does not have a specialist Human Resources Department to deal with this “crisis” situation, but only a partner to supervise contractors employed by the firm to manage pensions and payroll issues.
Solutions
To adequately deal with the drain of experienced staff and the attraction of “bright” accountants, Accountco must therefore seek the services of a Human Resource Specialist. This could be accomplished by either creating a post for this position and hiring a specialist, or by using a consultant. Accountco is a small firm and obviously will not have the kind of capital the large London-based firms are able to wield, as such, the suggestion is that a Human Resource Specialist Consultant be contracted to access and provide solutions and policies to ensure the firm remains competitive in the caliber of human resources it attracts and retains. This will be much more cost effective than having a permanent Human Resource Specialist. Also, the staff number is much to small to have a specialist Human Resource person permanent on its pay list. The senior partners must however have the business savvy to know when the consultant is needed.
Strategic Human Resource Planning
The Human Resource consultant must firstly involve the firm in a more strategic approach to human resource planning. The philosophy of the partners must be based on seeing the employees as a resource for the business development and not a cost. This strategic planning process will involve all and will revolve around the vision and mission of the firm. It is quite possible that Accountco’s vision and mission is not clearly articulated to all employees and that they are simply statements formulated some time ago that do not at all pertain to the relevant situation of the day. Within this context, the strategic planning process for the survival of the firm in to day’s world must have at its core visioning and the formulation of an appropriate mission statement. This will direct and lead the firm in the accomplishment of its goals and objectives. What is clear is the necessity of a paradigm shift by the partners, to think more strategically and less tactically. They must embrace change and become more proactive and creative in addressing the challenges that flow naturally from it. The vision and mission process will also encourage them to clearly define the firms culture and if found to be not supportive of the new trust attempts must be made in the planning process to tweak and change it so that it will be more responsive to the firm meeting its goals and objectives
Situation Analysis
The strategic planning process will involve a situation analysis where a complete diagnosis of the firm’s activities, successes and challenges are appraised. This involves performing a SWOT analysis and should reveal the gaps that exist versus the larger firms in its staff recruitment and retention ability. This analysis will not only highlight the human resource functions weaknesses of the firm but will also highlight the opportunities. Here, the human resource consultant will be able to lead and direct discussions on the specific human resource challenges facing the firm and how these could affect the firm in accomplishing its mission and reaching its vision. It is expected that priorities will be developed at this stage and that strategies be developed to address them. The partners will then be better able to arrive at a consensus on the company’s culture, its target audience and its unique qualities. This information is vital in formulating staff retention and recruitment strategies.
Recruitment Policies
One of the major priorities in pursuit of the mission and vision will be the enhancement of the human resource at Accountco. The human resource specialist will lead the whole team in suggesting solutions.
Solutions to retain experienced staff:
- Staff can be trained in all aspects of the work (audit, tax, accounting work, etc.) and thus may acquire greater responsibility more quickly.
- Because of the flattened organizational structure, opportunities should be made available for the voices of the employees to be heard so that they will feel and be part of the decision making process. This may help counterbalance the potential problem of lack of promotion prospects again because of the flattened structure.
- Training and development to encourage and support employees in their growth. This training and development could be at a professional level and a personal level. This will demonstrate to the employees that management care both for their professional and personal development.
- The work must be challenging and rewarding. Various literature gleaned is very clear on this aspect, that people who are continually challenged by their work and feel they are growing professionally are more likely to remain with the organization. The points above allude to this, with small firms being well placed to provide this variety of experience, challenges and opportunities
- A mentoring programme where experienced accountants advise and help new recruits. This will also assist in “socializing” the new recruits in the culture of the firm. In relation to small firms, this is a very cost effective and cost neutral method in the training and development of employees
- It is suggested that the culture be more of a family type with close collaboration and teamwork, where successes both professional and personal are celebrated. Employees will want to come to work and perhaps put in even extra hours not simply to enhance their reputation and experience but simply because of the love for it.
Solutions to attract a larger pool of applicants:
- A competitive starting salary
- A signing up bonus, which require employees to remain with the firm for a specified period
- Create employee partners and share profits
- Provide a friendly, supportive and flexible work environment
- Promote intellectual growth
- Use specialized recruiters or consult industry surveys
- Provide opportunities for on-line recruiting
- Use a series of marketing media – career fairs, trade shows, sponsorship programmes, newspaper and magazine advertising
Remembering that Accountco is a small firm, some of the solutions above might be cost prohibitive. As Tom’s research revealed, salary average increases is now about 4% and ahead of inflation. Would Accountco be able to offer this perhaps not, hence the need to look at the other methods to improve recruitment?
Tom’s research also indicated that the demand for experienced accountants remain high, this could adversely affect the firm as the experienced employees might be tempted to leave to “greener pastures”. It is hoped that the solutions offer above in relation to the retention of experienced staff would help prevent this.
However other opportunities exist, where in the public sector 20% of employers would be looking to shed accounting staff. Accountco can seize this opportunity and astutely market itself as the firm to be employed in.
Tom’s research will be instrumental to the human resource consultant in designing packages to attract new recruits. Tom because of his core function and experience (accountant) will not have been able to adequately use his information to do this.
The humane resource consultant versed in needs theories (Maslow, Alderfer, McClelland and Frederick Herzberg Motivator-Hgiene Theory) will be best positioned to so just this. His in-depth understanding of Equity, Reinforcement and Expectancy Theories very necessary in the formulation of favourable packages to suit the needs of the firm.
Budget
Very necessary, is the formulation of a budget to deal with the new initiative. This budget must be structured and planned taking all activities into consideration. Having an idea of the costs of failing to make an appointment, or of making an incorrect appointment is a good way of judging how much should be spent.
Evaluation and Establishing Benchmarks
The effectiveness of the recruitment process and its success cannot be done in a void. Clear benchmarks must be formulated to determine if the right strategy was used in the recruitment process and if the right selection was made. The tests must be both reliable and valid for proper evaluation. If this is not so, the information analysed might not be correct and Accountco will be mislead, leading to serious consequences to its continued successful operation. A small firm does not have the latitude of making poor selections as the cost of removing and hiring a next person is quite high, thus all efforts must be made in making the right selection at the start.
Summary
The need for a human resource consultant at Accountco is clear, no one at the firm has the experience and the knowledge to affect the changes in the human resource function that is needed for the survival of the firm. A consultant is preferred over an in-house human resource specialist as the cost of the latter is prohibitive in a small firm. The process must involve strategic planning as the core as the firm need to reposition its business thinking and strategies to meet the turbulent changes of the day and to be successful in the future. The best recipe for the retention of experienced of old staff and the recruitment of new should revolve around the firm meeting the professional and personal growth of its employees. That is, a friendly, supportive and flexible work environment that promotes intellectual growth. Also, its recruitment strategies must include the use of series of marketing media – career fairs, trade shows, sponsorship programmes, newspaper and magazine advertising.
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