Retaining Top Talent: A Competitive Advantage in Accounting

By JFS Partners Blog October 4, 2023

Retaining top talent is crucial for any industry, and the accounting and finance sector is no exception. Hiring leaders in accounting and finance face unique challenges when it comes to talent retention, with the ever-increasing demand for specialized skills and knowledge in an industry that requires precision and expertise.

Industries with the Highest Retention Rates

The accounting and finance industry has traditionally been recognized for relatively high retention rates compared to other sectors. In 2022, the accounting profession reported an average turnover rate of 9.4%– the 3^rd lowest in the country¹ . This trend can be attributed to several factors, including job stability, competitive compensation packages, and opportunities for career growth within the sector.

However, this does not hold true to all industries within the field. The average annual turnover for CPA firms is reported to be upwards of 25%², likely due to the struggle to maintain work-life balance and a historically demanding culture.

Industries that report some of the lowest turnover rates include:

Government Sector: The public sector, including government agencies and educational institutions, consistently boasts some of the highest retention rates in accounting and finance. This is attributed to factors such as job security, competitive benefits, and attractive pension plans.
Healthcare and Pharmaceutical: With an ever-growing demand for financial expertise in the healthcare and pharmaceutical industries, professionals in these sectors often find job stability and competitive compensation packages, leading to higher retention rates.

Trends in Employee Retention

Flexibility: Firms offering flexible work arrangements and technology support tend to experience higher retention rates as employees value work-life balance – 51% of employees would accept a lower salary for increased flexibility.³
Employee Development: Organizations that invest in employee development programs, including certifications and continuing education, see improved retention rates. More so, 94% of employees state they would stay at a company longer if it in their career development.⁴

Competitive Compensation: While it may seem obvious, competitive compensation packages remain a significant factor in retention- 55% of employees state they left a job for another with higher compensation⁵.

Cost of Retaining vs. Hiring New Talent

Retaining employees is generally more cost-effective than hiring and training new ones. The cost of replacing an employee can be as high as 50-60% of their annual salary⁶. In contrast, investing in retention strategies, such as competitive compensation, professional development, and a positive work environment, can save organizations significant resources in the long run.

Here’s how some of our clients say they maintain a positive retention rate:

“We don’t overwork our people and work-life balance is very important to us. We also are very flexible with our employees; we understand that things come up with families and personal issues. We also offer a great PTO policy and really encourage people to take their time off and be able to truly disconnect. We also ensure that the work is challenging and that we have a learning environment.” Healthcare Industry, Audit Manager

“I’ve been an employee at this company for several years, and the company genuinely values employee growth and development. We stand out by offering diverse career paths, preventing stagnation, and fostering skill expansion. Cross-training across departments enhances understanding and versatility. Their competitive benefits, including long-term incentives and bonuses, demonstrate appreciation for hard work. The work-from-home flexibility supports work-life balance, and they prioritize nurturing effective leaders, encouraging a sense of community, collaboration, and teamwork. In summary, we provides growth, benefits, and a supportive environment, emphasizing employee value and development.” Telecommunications Industry, Controller

Onboarding, Company Culture, and Training

Effective onboarding, a positive company culture, and continuous training are key factors in retaining talent in accounting and finance:

Onboarding: Proper onboarding is crucial in helping new hires acclimate to their roles and the organization. Providing clear job expectations, introducing them to colleagues, and offering guidance on company procedures can lead to higher job satisfaction and retention.
Company Culture: 94% of executives and 88% of employees believe a distinct workplace culture is essential to business success⁶. A strong company culture that values collaboration, transparency, and work-life balance can significantly impact retention.
Training and Development: Continuous training and development opportunities demonstrate a commitment to employee growth. Offering access to industry-specific certifications, workshops, and mentorship programs can enhance job satisfaction and retention rates.

Tips for Effective Onboarding

Develop a structured onboarding plan that spans several weeks.
Assign mentors or buddies to new hires.
Provide a clear career path and opportunities for advancement.
Encourage open communication and feedback.
Continuously assess and refine your onboarding process based on employee feedback.

Conclusion

In the fast-paced and competitive world of accounting and finance, employee retention is a game-changer. As hiring leaders, it’s crucial to adapt to industry trends, recognize the cost benefits of retaining talent, and prioritize effective onboarding, company culture, and training. By doing so, you’ll not only attract the best professionals but also ensure they stay and thrive, contributing to your organization’s long-term success.

Sources:

Retaining Top Talent: A Competitive Advantage in Accounting and Finance