The Account Is A Small Accountancy Firm Based In The South Of England: HR Planning Small is Beautiful Assignment, NUI, Ireland

The account is a small accountancy firm based in the south of England. There are 4 partners and 25 staff, 5 of whom are employed in secretarial and support roles. The firm is over 50 years old and has a solid reputation in the local area. The firm does not have a specialist personnel department. There is a partner designated to supervise the contractors who are employed by the firm to manage pensions and payroll issues, but there is little or no coordination of activities in other areas.

The account is having problems both in recruiting new graduates and in retaining staff when much better terms and conditions are being offered by large London-based firms. In other words, the biggest problem is in attracting a sufficient number of applicants from which to select and the partners are now thinking carefully about what is it that will attract new recruits to apply to the firm.

Although inevitably some rules have developed over the years, there is still a remarkable absence of rigid rules and practices. Work continues to be organized largely through informal systems of consultation within which Adam Smith as founder and senior partner and his brother John play key roles. This has helped to maintain the culture of a small family firm where personalities matter more than ‘plans’, structures’ or ‘hierarchies’.

There are no formal meetings, except a monthly partners’ meeting, where they share information about what is happening in relation to any large client accounts. Otherwise, communication is informal and ad hoc. While there is the opportunity to experience a wide range of activities (if not a wide range of clients) this again tends to happen on a very ad hoc basis without formal planning or discussions. The firm has been very good at supporting trainee accountants in terms of paying exam fees, but very little study leave has been offered.

Tom Steele, one of the newest partners, is a strong supporter of the need to professionalize, tap into the university graduate recruitment fairs and gain access to the brighter students at some of the top management schools. Tom believes that the firm should be looking to extend its client base, develop new areas of expertise and generally enhance its reputation in the marketplace. He believes that it is imperative to develop a more positive profile in the trade press magazines such as Accountancy Today without which he believes it will be impossible to attract and retain individuals of sufficient dynamism to generate the enhanced reputation he feels is necessary.

Tom has also heard from some of his friends working in the United States of some of the more aggressive approaches to recruitment that are being adopted there. He is particu•larly attracted by the idea of recruiting online. As one article he has read put it: with so many firms competing for a limited number of skilled candidates, savvy small businesses are learning what amounts to guerilla recruiting strategy, an approach that is defining the way small businesses capture talent.

Employers are realizing that they must actively market and brand their companies to attract the most highly qualified talent – quickly and cost-effectively. The solution of choice? Recruiting online where smaller firms can reach and ‘meet’ more candidates.

However, the authors also warn that in order for this approach to be successful the firm will need to consider the following questions:

• What is your company culture?
• Who is your target audience?
• What is it that makes your company unique?

Tom is not sure whether the partners can agree on the answers to these questions. Furthermore, Tom does not know anything about online recruiting and how to go about recruitment and selection, let alone what a good online recruitment and selection process would look like. In the past, he had been involved in interviews, although, looking back, more time seemed to have been spent discussing rugby and golf than accountancy skills.

Torn has done some research into the accountancy labor market and has prepared a report for the other partners which highlights the following facts. According to a survey, accountants averaged a 4.5% pay increase in 2019, the best for five years, but the market was stabilizing and this figure would probably not be sustained. Forecasts showed a likely slowdown over the year to around 3. 7%, but this was still well ahead of inflation.

Demand for accountants remains strongest in professional practice, with just under a third of firms looking to increase in size (31%). The weakest area of growth was in the public sector where 20% of employers would be looking to shed accountancy staff. Of the salary rises given, nearly half include some element of merit increase or performance-related pay.

Profit and share option schemes occur in a minority of organ•isations, principally the largest companies and in the finance sector. Contributory pensions remain the most popular benefit operated by more than three-quarters of employers. Private medical cover is offered by three-quarters of all organizations, although two-thirds of those restrict the benefits to senior employees only. Company cars are continuing to decline in status, with many companies offering cash alternatives, depending on seniority.

Only 12% of newly qualified accountants qualify for a car or a cash alternative. In terms of family-friendly policies, a third of employers now offer paternity rights -an average of five days – and 15% of companies offer additional leave or other benefits to support maternity rights. However, only 3% of organizations provide crèche facilities. Relocation packages are low, but study packages continue to be generous.

Nearly all employers (85%) help trainee accountants to pay for professional exam fees and textbooks and also offer generous study leave. The average amount of study leave is 8 days rising to 17 days in profes•sional practice. One important trend among large companies has been the offer of flexible remuneration packages. Employees can select from a menu of items such as salary, holiday, time off, cash or company car, or the ability to work from home. Around 10% of companies are now offering this approach.

Although more than a quarter of companies (26%) have formal policies on flexible working, mainly by providing flexible hours, there is still a tendency to work for long hours, weekends and not to take full holiday entitlement. The average working week is 46 hours. Employers are still reporting difficulties in recruiting employees with relevant experience.

Over the past year, problems in recruiting qualified and senior staff have taken over from those in recruiting part- and newly qualified accountants. ‘Rele•vant experience’ is top of the list in recruitment criteria, just slightly ahead of ‘technical ability. This is followed by ‘communication skills, ‘qualifications’ and ‘commercial acumen’. IT literacy is expected but not highly valued.

Tom thinks that the firm should find some help in dealing with their human resource problems but knows that Adam Smith believes that they can deal with every•thing themselves. Tom has approached you to do a presentation to the partners about the benefits of professionalizing their approach to human resource management in general and their recruitment and selection difficulties in particular.

Case Analysis – The Issues

You are asked to address the following questions in the light of Tom Steele’s concerns and the information in the background briefing:

1. What benefits are Accountco likely to see from having a more strategic approach to human resource planning? What particular problems are Accountco likely to have in adopting a more strategic approach, given its size and the nature of the labor market in which it
2. What would your advice be in terms of the actual steps that Account could take in trying to attract a larger pool of applicants?
   • To what extent would this help to resolve problems with retention
3. What sort of benchmarks would you use for assessing the ‘success’ or ‘failure’ of any new recruitment or resourcing strategy?