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Recent studies have actually put the financial cost of a bad hire in third place for its negative impact on an accounting businesses, behind lower morale and reduced productivity.
“Stanley” was recently hired by an accounting firm in Los Angeles. His resume showed the experience he’d had with a reputable medium sized firm in a staff accountant role. He was personable and confident at interview, and was hired. The cracks showed within a few days.
He needed to complete various reconciliations in his new role, but seem to have no understanding what this actually involved. Work on client files took longer than expected, and he was observed dialing around the team asking questions, trying to hide his lack of knowledge.
The firm initially put it down to him adjusting to the new firm, but by week five it couldn’t be ignored. Various improvement processes were put in place, but you know how this goes – he was let go in week eight, and the hiring process begins again. Sound familiar? We’ve all hired a Stanley. It was lessons like this that caused me to start Accountests.
Don’t get me wrong, many hires work out ok, even if the candidate doesn’t turn out as you might have hoped or expected. But we all remember the bad ones – the cost and mental scarring take a hit on your enthusiasm for being in business and some even make you wonder why you entered public accounting at all.
Recent studies have actually put the financial cost of a bad hire in third place for its negative impact on an accounting businesses, behind lower morale and reduced productivity. And that was with the financial cost being at least 150% of salary. To make it worse we know accounting firms have a reputation for being slow at making the hard decisions to either terminate employment, or even start a performance management process.
Here’s a few ideas to avoid or minimize the chance of have your own ‘Stanley’ moment – especially in smaller firms
Don’t Trust The Resume. Stanley’s resume was great. The resume more often tells you want the candidate would like to have achieved in their various roles. Use good interview questions to uncover what they really did, and actually test their skills to give you objective evidence of their technical capability. Most firms don’t do this.
Be An Effective Interviewer. Make sure someone on your panel actually has strong interview skills, and stick to an agreed interview process. Have your questions organized, know how to probe when answers are not in-depth enough, make notes and use a scoring template. Most firms fail to do this.
Hire A Person Who Will Fit. All firms have their own culture – driven largely by the owners way of working and how they interact with their team. Get team members involved in the interview. Even better, a good quality personality profile will identify preferred working styles but even better can help you uncover whether a candidate has natural capability to progress in client facing and new business areas in your firm.
Hire To Your Strategic Plan. If you don’t know the firm structure you want to have, make a plan before hiring anyone else. Every new hire should move you closer to this ideal structure. If you’re hiring like for like you’re probably missing an opportunity.
Act Quickly. Make sure you have a good process and ready access to the tools you need to progress a hiring fast. Candidates have options, so you need your offer to be the first they get. Make offers with deadlines. Learn how to manage counter-offers. Learn the ‘killer questions’ for candidates and referees to draw out of them their real position.
No one is expecting smaller public accounting firms to be exceptional in their hiring processes – even the big firms can’t do this. But everything you do will improve the chances of not only hiring the best candidate, but hiring a candidate who turns out the way you expect – both in terms of the way they work and what output they can produce.
If you want to learn some ways to hire better in public accounting, check out our Hire Fast With Confidence video snippet series. You can jump in here and get tips for any stage of the hiring journey – and learn those “killer questions.” https://www.accountests.com/pages/hiring-fast-with-confidence.
About the Authors
Giles Pearson FCA was a PwC Partner for 18 years before jointly setting up Accountests.
Steve Evans has a whole career dedicated to enabling employers to attract, recruit, develop and retain talented individuals and teams, with particular expertise in candidate testing and assessment before setting up Accountests.
Accountests deliver the world’s only online suite of annually updated and country-specific technical knowledge tests designed by accountants for accountants and bookkeepers.