Payroll Accounting Office Management & Administration Report

July 2005

Why It’s Time for Your Firm to Offer Work/Life Balance

Staffing is consistently an issue that turns up on the AICPA’s annual Management of an Accounting Practice Top MAP Issues list. Keeping staff happy—and simply keeping them at all—are important goals for every CPA firm now. One of the best ways to keep staff happy and to retain them is to offer flexible working arrangements.

Although some firm leaders may be concerned that there are costs associated with providing flexibility, it is important to compare those costs with the high price of turnover. (See the sidebar, "Turnover: Assessing the Cost Factor," for a list of factors that you can consider to compute a turnover cost average for your firm.)

Although the demands placed upon CPAs are rarely as stringent as those experienced by lawyers (except during busy season, of course), a recent study of lawyers in Canadian firms indicates that firm leaders who don’t address the effect of work/life balance on professional services attrition rates stand to lose millions of dollars a year.

"Longer working hours and unpredictable work schedules can all add up to less flexibility, less personal or family time, and ultimately more stress," explains Dr. Susan Black, president of the Toronto office of Catalyst, the research and advisory organization that works with businesses to build inclusive environments and expand opportunities for women at work. "In addition to the high cost to individuals and families, there is also a significant business cost when work/life balance issues are not addressed." (The sidebar, "The Overwork Issue," goes into detail about what can happen to staff, partners, and other leaders when too much work and work-related stress are in place.)

In Beyond a Reasonable Doubt: Building the Business Case for Flexibility, a study sponsored by 10 leading Canadian law firms, Catalyst analyzed the work/life balance perceptions and challenges law firm associates face and then calculated the financial impact of losing top talent by using standard cost-accounting methods. Among the report’s key findings of interest to CPA firms:

• Responding associates—both women and men—report the same top factors are important in choosing to work at another firm: an environment that is supportive of family and personal commitments and greater control over work schedules.
• Women and men associates value a family-friendly workplace. Eighty-four percent of women and 66% of men rated "an environment supportive of my family and personal commitments" as an important factor in choosing to work at another firm.
• Despite the range of factors offered in the Catalyst survey (from increased compensation to pursuing more intellectually challenging work), the majority of men and women associates, both junior and senior, cite work/life balance factors as more important than other factors in choosing to work at another firm.
• Two-thirds of women (66%) and more than half of men associates (54%) indicate that the possibility of working fewer hours would be important in choosing to work at another firm.
• Associates with positive perceptions of their firms’ work/life culture intend to stay with their firms for a longer period of time.

"A firm invests a great deal of its capital in recruiting and developing associates," Black adds. "Calculating the effect of turnover is the first step in enabling law firms to grasp the business impact of the issue of work/life balance. A well-designed retention strategy can help a firm maximize its return on this investment in talented associates."

The report notes that typical retention strategies used by law firms—competitive compensation and opportunities for advancement—are not supportive of family and personal commitments and do not give lawyers control over their work schedules.

While those "traditional" factors continue to be important and were cited by one-third of the associates surveyed, they have less effect in today’s marketplace for legal talent. In work environments where pay and advancement opportunities vary marginally between one firm and another, firms that support associates’ personal commitments and offer them more control over their work are more likely to retain their junior lawyers.

What CPA firms can learn from the study. The competitive nature of legal practice and high demands for billable hours are, fortunately, much less of a factor at CPA firms. However, the study’s results and the realities of life at law firms offer a cautionary tale to CPA firms that may be demanding more from staff in a scramble to keep pace with the demands of a growing firm—whose staff is not growing to keep pace. The scarcity of staff in many locations is not the CPA firm’s fault—but existing staff are not to blame, either.

While firms are pinched for staff, it is important to remember that they are your most valuable resource. If you are hearing discussions that echo the study, it isn’t surprising—but CPA firms, which have traditionally been more accommodating to their staff than law firms, should be able to be more flexible, too. As hard as it may seem to be able to be both flexible and yet get the productivity that you need from staff, what matters more is that you are trying—and that you communicate those efforts to your staff.

For more information: More than 1,400 lawyers working in law firms across Canada completed the Catalyst survey for Beyond a Reasonable Doubt: Building the Business Case for Flexibility. In addition, working with the Toronto offices of four major law firms, Catalyst devised a model for costing turnover, which includes a "workbook" law firms can use to capture and track the cost of associate departures, which may be of interest for CPA firms who wish to see how other professional services models work. For purchase information: Call 416-815-7600 or e-mail: info@catalystwomen.org.