Practice Management How to Develop (and Retain!) Future Leaders at Your Practice Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Josh Lance, CPA, CGMA Modified Mar 5, 2019 4 min read Let me be blunt here: tax and accounting firms are notoriously bad about handling and managing their talent, the greatest asset we have. Yet, the rate in which firms burn through their talent is staggering. Per Inside Public Accounting, the rate of turnover for accounting firms averaged 12.4 percent in 2017. In my experience, firms typically shrug off this issue because they know there is always a new crop of candidates graduating college to fill their talent pipeline. Sounds good, but the problem is that continuously replacing an employee is much more expensive than hiring a new college grad. As a result, the long-term cost of high turnover means the leaders you need to run the firm won’t be there when you need them. Therefore, it is imperative to develop future leaders. Here are some ways to do that. Become a Model You won’t be able to develop leaders in your firm if you do not show leadership yourself. If employees do not see you as a leader, how are they supposed to learn how to lead? They will see your poor leadership and start to take on your habits, or leave in order to find another firm or employer who models good leaders. Ron Baker says bad clients will drive out good clients, but this can also be said for leaders. Bad leaders will drive out good leaders from your firm, so it’s crucial that you model good leadership within your firm. You also need to take care of yourself as the leader of the firm so you can lead those around you. Whether exercising, meditating, or doing something that takes stress away and restores your energy, take time to decompress. If you can’t lead yourself, you can’t lead others. Power Does not Confer Leadership Most firms have a typical pyramid hierarchy with three different levels: staff, managers and partners. Within those levels are sublevels, such as junior staff and senior staff, for example. I think firms mistake all of these levels for leadership, when in reality the levels just create a power structure. One must listen and do as their manager or partner says, not because they are good leaders, but because they have been given the power and responsibility of their title. Firms believe they are fostering leadership through promotion, when they are just fostering a power dynamic. In order to develop your staff to become future leaders, you need to do more than give them a new title. The Art of Failing If you are going to build leaders, you need to give them opportunities to lead – and let them fail and learn from their mistakes. This is easier said than done! Failure could mean losing clients and revenue, but without trying, failing and knowing that you are there to help them when they do fail, staff will not learn how to lead. Leadership is learned and understood when there is trust that failure does not mean they lose their job, but rather a way for them to navigate what it means to lead. Some of the people we put up on a pedestal as great leaders became so because they had opportunities to fail. Sow and Reap Creating leaders in your firm is a long-term process, which means you need to invest the time in teaching your staff how to lead and let them know that you see them as leaders. If you let them know you are making the investment in them, they are more likely going to stick around and not jump at the next opportunity they find. This means giving them opportunities to lead a project or give voice to the direction of the firm. Perhaps you abandon an annual review process; instead, conduct action reviews so they can get feedback right away about what went well or badly so they can learn and evolve in their leadership. Create a career track that bypasses normal convention. If you are doing the work of developing them as leaders and you see them blossoming as leaders, then you need to capitalize on that and give them that leadership earlier on rather than waiting for them to “put in the time.” By sowing and reaping when it is the right time, you will start building the leaders you need to take over for you. Developing your future leaders shows that you see your employees as assets instead of disposable commodities who can replaced by the next round of graduates. By believing they are leaders you need to steward, you will you do a better job of developing them and build a firm that exists beyond yourself. Investing in the people you have in your firm will allow them to take over the reins and ultimately lead. Unless you want to lose control of what happens with your firm in the future, it’s imperative you start building leaders now. Previous Post 10 Secrets to Strong Team Collaboration Next Post Important Tools to Help You Manage Your Tax and Accounting… Written by Josh Lance, CPA, CGMA Josh is head of accounting (AMER) for Ignition, the client engagement and commerce platform. He is also managing director of Lance CPA Group. Before venturing out on his own, he spent his early career at a Top 10 national public accounting firm, then moved to an ultra high-net-worth family office. Josh is an adjunct faculty member at Northwestern University and University of Vermont. He was selected for the 2017 AICPA Leadership Academy class, and was named to the CPA Practice Advisor’s 40 Under 40 every year from 2017 to 2022. He is also on the board of directors for the Illinois CPA Society. More from Josh Lance, CPA, CGMA Follow Josh Lance, CPA, CGMA on Twitter. Comments are closed. Browse Related Articles Advisory Services The top 5 trends in accounting for 2019 and beyond Practice Management Reshaping accounting: Millennials and Gen Zs Practice Management Staffing Trends in the Tax and Accounting Profession Practice Management Beating Tax and Accounting Talent Turnover While Drivin… Practice Management Pros and cons of merging your practice Advisory Services The 13 characteristics of the modern accounting firm Advisory Services Work less, make more, and be your client’s hero with … Practice Management 7 traits of a modern accounting firm Intuit® Accountants News ProConnect™ Tax Online and QuickBooks® Online Accoun… Workflow tools 7 predictions for tax automations in 2024