The Impact of Firms’ Return to Work Policies on Staff Retention & Recruitment

Much is continuing to be said about the difficult recruitment market at present, across all industries including the accounting profession, with emphasis being applied on what can be done to differentiate your firm to make it more attractive to potential employees. From most reports, it sounds as though our ability to source and secure good personnel is returning to pre GFC days when there was a significant shortage of good quality staff.

As we have mentioned a couple of times of late, we started to see the trend around last October of large accounting firms head hunting staff from their smaller colleagues with the incentive of sizeable sign on fees. This was particularly the case where firms were dependent on overseas personnel who were in local lockdowns themselves. So, we basically saw the largest firms target staff in those firm slightly smaller than them and so it followed down the line. Likewise, we saw regional staff being enticed into industry with the offer of remuneration packages unable to be matched by firms. I read only this morning of a small to medium sized firm suggesting there should be some form of transfer fee or compensation where large firms poach well trained and developed personnel from small and medium sized firms, although this has been a long term complaint of smaller firms. Whilst I appreciate the feeling of frustration, I think the likelihood of this happening is slim. (Click here to read more of this practitioner’s thoughts.)

However, it may not be completely bleak for those firms below the Big 4 and Second Tier, on the basis of a chat I had with a practitioner just a couple of days ago. They were commenting on how apparently the larger firms are requiring or expecting staff to return to offices across the country, it was unclear whether it was on a full time basis or not, however apparently there is some resistance being demonstrated towards this request. As a result, recruiters are suggesting this may result in increased resignations within these larger firms, with the opportunity for smaller firms to benefit from the availability of these good personnel in the marketplace.

Whilst that will be attractive, and certainly beneficial, one aspect that needs to also be recognised however is the remuneration expectations of these newly available staff. Yes, it is recognised that salaries within suburban firms are more conservative by comparison to their city counterparts, and some firms have been utilising the fact that personnel, who now travel to work less frequently, are saving on travelling costs and the like, thereby benefiting their hip pocket. It is probable that staff coming out of these larger firms will have high expectations around their likely salaries, making it very difficult for smaller firms to compete unless staff are willing to take somewhat of a pay cut to work close to, or predominately from, home.

Furthermore however, small and medium sized firms should heed this industry intelligence. If staff are resigning from larger firms due to expectations of them returning to work on a substantial basis, similar mandates in smaller firms will not doubt result in similar outcomes. Thus, we would recommend care in setting your WFH and return to work policies to avoid unwanted staff turnover / resignations.