Art of Accounting: Deciding Who To Let Go | Accounting Today
Art of Accounting: Deciding who to let go
In normal times, ideally no one should be let go unless they are just not good. In these times, being practical means some may need to go. How do you decide?
Small firms are businesses, but many are run like a family unit. Loyal and long-term employees get favored in many ways over newer staff even if the newer staff outperform the longer-term people. I believe we need to operate in some sort of survival mode. While loyalty should be rewarded, we now need a harder look at skills, growth, competence, client relationships and value added to the clients and the practice.
Most firms have staff people so the owners’ or partners’ work could be done by someone other than themselves. So, let me suggest that you evaluate each staff person using that criteria. Ask yourself: “How well and how much of my work does that staff person do that I don’t have to do?”
A lot of factors go into this. Here is a short list of what to consider:
- How well do they follow your instructions?
- Are they learning from each new job so that the third time they do similar work, they do not need instruction?
- Do they apply what they learned on one project to another, or from working on one client to the next?
- Do they remember what they worked on so they could apply it if it comes up again either on that client or somewhere else? This and the previous two points are similar, but I know from experience they are three separate questions.
- Do they know basic tax and accounting issues you would expect them to know at the staff level they are at?
- Are they expanding their knowledge in areas that benefit clients, the firm and themselves?
- Do they meet deadlines without constant prodding by you?
- Do they take “ownership,” meaning they assume responsibility to see something through to completion or follow up when they hand off what they did to others?
- Can they handle multiple projects?
- Do they follow up diligently on missing information or uncompleted projects?
- Do they keep you posted timely and regularly on their progress with each multi-day project?
- Is their work relatively error free?
- Do they ask for help when they are working on a new area for the first time? They should, but only after they have made an attempt to learn what they could on their own…within a reasonable amount of time.
- Are they self-starters?
- Do they follow firm procedures and processes and use checklists properly?
- Do they have good relationships with other staff and clients?
- Do clients they work on routinely call you, or does the client call the staff members, who then refer the client to you when they cannot handle something? If you get the calls, then in my opinion, there is a lack of confidence by the client in the staff person, or the staff person really hasn’t assumed the role you needed them to.
- Do they make your life easier?
- Do they help you make more money?
If staff need to be cut, it stinks, but you have to make the decisions based on who can present the best opportunity for your business to survive and then thrive. Loyalty to a staff person’s longevity is admirable, but you need staff who will help you pay the bills, remain in business and maintain your equity in your practice.
An alternative, assuming everyone is in top form, is to ask your staff to take a voluntary pay reduction of 25 percent. The goal is for your practice to survive. An alternative is to consider furloughing each person one week a month. This is a 25 percent cut, but they could then get unemployment insurance for that week. Nothing is good, but we are trying to pick a course that works.
Do not hesitate to contact me at email@example.com with your practice management questions.
Edward Mendlowitz, CPA, is partner at WithumSmith+Brown, PC, CPAs. He is on the Accounting Today Top 100 Influential People List. He is the author of 24 books, including “How to Review Tax Returns,” co-written with Andrew D. Mendlowitz, and “Managing Your Tax Season, Third Edition.” Ed also writes a twice-a-week blog addressing issues that clients have at www.partners-network.com along with the Pay-Less-Tax Man blog for Bottom Line. Ed is an adjunct professor in the MBA program at Fairleigh Dickinson University teaching end user applications of financial statements. Art of Accounting is a continuing series where Ed shares autobiographical experiences with tips that he hopes can be adopted by his colleagues. Ed welcomes practice management questions and can be reached at (732) 743-4582 or firstname.lastname@example.org.