In this blog we explore some of the current staffing trends we have noticed amongst the 1,400+ firms (accounting, legal etc) that we work with.
Many of our blog commentaries about accounts receivable are timeless. They relate to human nature (debtor behaviour) or very long-term trends.
Staffing issues though, can change very quickly – mandated work from home or the rapid onset of inflation to wages as just two examples.
Below we explore four current (2022) trends and the smart moves made by the best professional service firms to either respond to or take advantage of these trends. Some of our tips will focus on accounts receivable actions (our speciality area) but the trends and other tips are generic, meaning you should recognise these amongst your firm!
Trend One: Employee Retention
While always important, the spotlight has really fallen on retention in 2022 as the world faces the “big resignation”. People (especially younger folks and experienced workers) are reassessing their work and possibly life in general.
Tips for Action:
1) Listen to your team. What do they like/dislike about their current job or career. Use a team “pulse” tool (e.g. Officevibe, Joyous, Lattice etc.) to collect and benchmark team issues and satisfaction.
2) Show you are listening. Respond with demonstrable action on the results of your feedback. E.g. If the people in accounts don’t like making phone calls to slow payers, look at getting somebody else to do that.
3) Focus on worker wellbeing. Yes, some folks may simply leave for more money, but research consistently shows the main reasons employees leave is when they feel they are:
a) Not appreciated or recognised.
b) Not given enough training to grow.
c) Not balancing their work-home life.
d) Not aligned with the company’s direction.
Trend Two: Wage Inflation
The financial impact of the current tight labour market has meant an increase in compensation levels for new hires in 2021and 2022. That can produce inequity with existing team members, and when combined with higher living costs from general inflation, creates a volatile remuneration environment.
Tips for Action:
1) Always have a sense of market value for every role so your new hire remuneration is market relevant.
2) Bite the bullet and recognise, if your new hire is being paid 20% more than existing team members (for exactly the same work), that your budget of 4% salary uplift next year may not be realistic.
3) Review job spec’s very carefully and adjust budgets and/or forecasts accordingly. Have no margin to pay the increased costs? You need to put your prices up.
Trend Three – Use of outsourcing
In a tight labour market when you are trying to hire (or retain) people it is important to focus on filling the roles of the mission critical operational team members. People who deliver services to your customers. An example of this being done badly, is an accounting firm having it’s accounting staff doing in-house accounts receivable work. They must do accounting! Qantas recently re-tasked office staff to load and clean planes – that’s an example of understanding mission critical resource placement.
Tips for Action:
1) Review your deliverables and determine, which are mission critical and the core functions your people MUST do.
2) Consider options to outsource the rest. You will often find the outsource solution delivers a better and more cost-efficient result. Why? Because it is the outsource companies core deliverable. Remember “outsource” does not always mean “offshore”. Our firms accounts receivable solution (Virtual Ledger Management) is a perfect example of an onshore outsourced solution.
Trend Four – Find Efficiencies
Review what can be done with fewer people. What can be automated? What can be done a different way to obviate wasted team efforts? Think lean! More from less.
Tips for Action:
1) Incentivise your people to find ways to “work smarter not harder”. If they can knock out a job in 4 hours that used to take 5 hours then share the win with them. Ultimately it will be your teams that will know where the waste is – get them to help you find it.
2) Eliminate waste. In the finance area, consider moving from a PIP to a BIP accounts receivable model. The PIP model adds costs, complexity and requires more people than BIP. BIP puts you in control and reduces the net costs of providing credit by reducing the people costs and complexity associated with chasing slow payers.
We understand that times are getting tougher for professional service firms. Staffing has always been a Top Five issue. However, in 2022 it has become so critical that lack of staff is actually holding firms back from helping clients.
Please reach out to our team if you feel your firm would benefit from guidance on how to use your existing resources to produce better outcomes.