It’s a good question, and one I am frequently asked by client firms who engage my firm to find professional staff for them.
In actual fact, in today’s market, the smaller practitioner is often not as disadvantaged as they might, at first, assume, particularly at the lower end of the salary scale.
Indeed, some of my clients, public accounting firms just like yours, have decided to give themselves a distinct advantage by paying more than the big four.
In the end, it usually doesn’t cost any more than paying market rate, as someone who knows they are getting paid more than they would usually be paid elsewhere often works that little bit hard and that little bit smarter. The combined effect can sometimes be that their effective cost per hour to the firm is similar to an ‘average’ team member putting in an ‘average’ week.
In addition to this, smaller firms are often more flexible as they can accommodate the needs of ‘return to work Moms’ by offering flexible hours or remote access to their system allowing them to work from home a couple of days a week.
It also depends on the type of environment you’ve worked hard to create at the firm.
A big, faceless, corporate firm can sometimes feel cold and clinical. Partners in bigger firms can sometimes treat their clients as if they were their own personal piggy banks – generating fees when in need of cash.
Contrast that relationship to the one in a smaller firm, where the receptionist knows the names of the clients children (often because they share the same school or hockey team) and where the person answering the phone knows which client is calling before they’ve said a word, or before they look at caller display, just y the way they’re breathing!
In a smaller firm, there tends to be a strong feeling of community among the staff and even with the Partners, as they all work closely together.
At the bigger firms, some Partners might not even know the names of some of their staff!
All of this adds up to create a real team environment, where everyone’s contribution is valuable.
And because everyone’s contribution is valuable, all staff gets recognition for their efforts during the year.
The anonymity that sometimes comes with a bigger firm again can often work against them, as people want to be recognized for their good work and effort. In huge offices with several hundred staff it’s sometimes difficult to get noticed, no matter how good your work is.
Let’s look at a typical example. Let’s call the candidate Michael.
Michael was a hard working CA in a national firm who worked for a Partner who was, to put it mildly, something of an egomaniac.
Michael had some great ideas, and, of course, he would share them with the Partner he worked directly with. However, even though several of his ideas were adopted as firm policy, Michael never received any credit for them. He didn’t receive any positive comments about these in his annual review either.
After a couple of years of this happening, Michael raised this point with the Human Resources manager conducting his annual review, who was shocked that Michael would be so bold as to claim some of his partner’s great ideas were in fact, his!
Despite Michael’s protests at his innocence, he became branded as a trouble maker!
Well, suffice to say that Michael decided to leave the big four firm that had been his employer for eight years, and he joined a smaller outfit. He quickly became a key figure in the firm’s management team, and after just three years, was recently promoted to Partner.
Now, of course, not all Partners in big firms take credit for their team members’ ideas, but it’s not the first time I have heard of this happening either.
Other ways smaller firms can compete with the bigger firms is the intimate relationships we are able to develop with our clients in smaller firms. We tend to know them much better, become involved in their business decision making more closely and some of our clients even become friends.
Rarely does a smaller firm have to implement lay-offs. Not so with the bigger firms. When a multi-million dollar audit is lost, the Partners are faced with a choice:
· Keep the firm staffed at its present rate, despite a lack of work and find new business to fill the void, or
· Let go enough staff to cover the losses and re-hire later if they find new business.
It’s not an easy choice for some.
Even though they may prefer not to let people go, they have personal financial commitments which they would like to continue to be able to honour (kids at university etc) and so more often than not the axe falls on the last few hundred recruited not so long ago.
But what happens if they let too many go? Although they may preach ‘work/life balance’ few actually practice what they preach, and thus the team working for them feels obliged to arrive early and work late too.
The smaller firms rarely find themselves in this sort of predicament.
Another point where smaller firms win big, is in the variety of work enjoyed by staff. I have seen several brand new CAs at one of the large firms (who will remain nameless) not know what to do with a ‘Quickbooks’ file, because their entire career has been spent auditing Billion-dollar corporations, and they have only seen payable for six months on one audit, then onto fixed Assets for three months at the next client and then payables for three months at the next.
This type of CA is often, in my humble opinion, dangerous. They simply are not well rounded enough to be any use in a smaller firm, and should they make a move into one, they will probably struggle for the first few months.
I am old enough to remember the hand written extended trial balance.
The invention of a psychopathically sick mathematical genius, it really did ‘sort men out from the boys’ (or the women from the girls) as far as identifying who had a real grasp of double-entry bookkeeping and who did not.
I fear that some new CAs wouldn’t know where to start on smaller client files and as far as ‘T’ accounts are concerned, well, it might as well be in Greek!
Most people who ‘grow up’ in smaller firms are better technicians at the stuff that really matters for the owner-managed client. Yet it is a selling point for why a candidate should join a smaller firm that is rarely capitalized upon.
So, if you run a smaller practice, and you’re feeling insecure about ‘selling’ your firm to a candidate, shake of those insecurities and remember all the great things that led you into your role today:
· Work/Life Balance is more likely to be attained in a smaller firm
· Paying higher salaries but working a little smarter can mean everyone wins
· A better all round grounding in accounting can be achieved in a smaller firm
· You get to know the clients far better and build real relationships in smaller firms
· You get to know the Partners at smaller firms better, and they get to know you too
· Flexibility in working from home or flexi-hours is more achievable
· Great training for future Partners
· First-hand experience in a wider range of projects
· Better tax experience compared to an audit staff member in a bigger firm
I could (and often do) go on, but I think you get the picture by now.
While sometimes the bigger firms simply write bigger cheques, money isn’t everything.
There is no real reason why a smaller firm cannot compete on salary alone, but they can also create a more compelling case for joining them than a bigger firm could – unless the candidate simply wants to stay in audit for the rest of their career.
