Your firm’s future health depends on recruiting and developing in-house talent, but not just for the reason you’re thinking. In our work with accounting firms, we’ve noticed a unique feature of your businesses that we don’t see anywhere else and it is related to turnover.
Most of your new hires won’t make it to partner, and if they do, there’s no guarantee they won’t move on to a new opportunity before they stop working completely.
What’s unique about that? Every firm we work with, at one time or another, has won a significant piece of new business from their alumni.
In his book, “The Firm,” Duff McDonald tells the story of legendary consultants, McKinsey and Co. Buried in that story are anecdotes suggesting McKinsey owes much of its success in penetrating the C-suite to its extensive alumni network. It has been said that Harvard MBA, McKinsey alumni are hardwired in to the circuits that run American business. And it’s hard to argue against that.
Your firm’s future health can happen organically through hope, or it can happen intentionally with practice.
Let’s bring it back to our opening statement that your firm’s future depends on your ability to recruit and develop in-house talent. This takes on a new importance when your future firm is going to win business based on how well your eventual alumni perform.
Here, we’ll outline three steps you can take to insure your alumni call on your firm when that time comes. Recruiting, initial training and development.
Consider how that reads to your recruiters and managers internally. What happens if the language is changed to, “Our future biggest client is going to come from someone we hire this year.” How will that read internally?
Recruiting is the first step you can take to insure your firm’s future. You’re going to spend a small fortune on tools insuring the person you choose is the perfect hire, but we’re going to let you in on a little secret: All those selections tools don’t matter.
We’re not saying you don’t need them, because you do. It’s the price to pay to compete. What we’re saying is that your odds of picking the perfect employee is only slightly better than chance, even with cutting edge tools and events.
We have a workshop exercise that uses the NFL as an example of this. The NFL operates in as near a closed loop system as anyone, and its ability to select the perfect player in the first round versus the second round is only slightly better than chance. You don’t have nearly the same resources or past performance data that the NFL has, so what chance do you have of picking the perfect person?
We’re not suggesting you take just anyone. We’re saying you should put more emphasis on which you like. When looking at two talented individuals, go with your gut and pick the one you like best. You’ll do more to make them successful over time. The research bears that out.
At the same time, invest more in playing hard to get. Promote a culture to outsiders that says you’re not for everyone. Make a concentrated effort to cultivate a perception of exclusivity and high barrier to entry because it creates desire. Homework assignments and multiple interviews help. And just like a fraternity or sorority rush process, your future peers/co-workers play an outsized part in the firm’s desirability.
Keep the adage about desire in mind when reviewing your recruiting efforts: we want what we can’t have and we chase what runs away. What are you doing to cultivate that desire?
You’ve found the best and brightest, you like him and are optimistic about his future success, but there’s something you need to know. Your new superstar has never had to ask for help before. He has always been at the top of his class, the captain of the team, everybody’s all-American. It has been easy.
Recruiting is the first step you can take to insure your firm’s future.
Don’t hold it against him. Instead, make sure the training is as hard as the job, so he learns to look for help right away. He’ll need to be reassured that there’s nothing wrong with him when he asks for help. He needs to understand that asking for help doesn’t demonstrate incompetence or make him needy, it just means he’s human.
What if he won’t ask for help? You’ll want to figure that out sooner rather than later. When firms invest a fortune in the hiring process, they do it to prevent turnover. Turnover isn’t bad by itself, but you want to avoid the most expensive turnover. The most expensive turnover is between the first month and month 18. If you have turnover in month one, it simply saves a lot of heartache. If you have turnover after 18 months, you’re probably gaining a lead source in the community.
The way you do this is by making that first 30 days at least as hard as the real job. Both parties enter the relationship knowing in the first 30 days the new hire can leave if it’s not a fit, and conversely, you’re going to allow the team leader to end the relationship if he thinks the new hire is not a fit.
Watch him perform, put him under pressure, and at the end, ask his team leader to commit to do everything to make this person successful for 18 months. If he doesn’t make it, it’s the team leader’s fault. Turnover is fine under 30 days and over 18 months, that’s it.
During your future alumni’s tenure with your company, if you’ve recruited the best and committed to making him successful, you’re going to have invested in making him the best he can be.
Think about it this way, when your alumni becomes the CFO of a $200MM company, he’s going to look for help from people who are at least as good as he is. Do you want him looking back at your firm and thinking, “Nice people, I should give them a shot since they gave me my start,” or, do you want them thinking, “Get my old firm on the phone. They hire and develop the best people.” Which gets the business?
If you haven’t picked up on it yet, each of these suggestions has a short-term as well as long-term payoff. We assume you’re doing much of this already. You’re already hiring the best and brightest, you’re already conscious of eliminating the most expensive turnover and you’re already putting all your people on a fast track development program that encourages them to move up or move on. Once they move on, some of your alumni already are referring their new business to you.
It’s just not happening intentionally.
To make it intentional, your firm must tie these ideas together with stories. Your firm’s culture is embodied in the stories that are told in its hallways and after work. That includes the stories of partners and associates that are no longer there.
Get good at telling the stories about your firm on its best days. Stories about the challenges you help clients overcome and the client problems you solve. Mix in stories about your best alumni and the pride the firm feels in their accomplishments. Stay in touch with everyone who passes through your doors and share the stories with new recruits and clients.
Your firm’s future health can happen organically through hope, or it can happen intentionally with practice. Encourage your leadership to consider a more intentional approach with incremental improvements in recruiting, initial training and staff development will pay off in the coming decades. Your future starts now.