The Question for CPA Firms:
Hire Right or Hire Right Now?

Many CPA firms are taking advantage of the recent demise of Arthur Andersen and the current state of the economy to hire experienced accounting personnel. Local CPA firms with the idea that there will be additional opportunities to gain new clients and technical capabilities are hiring partners, managers and other experienced staff. In my opinion many firms are making these hiring decisions without consideration for the possible negative impact on the long-term strategy and culture of their firms. Firms need to steer clear of hiring right now and move instead to hiring right.

Consider how many times your firm has hired individuals with great skills and national firm experience but in the end they either created significant disruption in the firm or left because the firm could not offer them the opportunities they desired for their long-term careers. I repeat: the firm could not offer them the opportunities they desired for their careers. Hardly an entrepreneurial attitude on the employees’ part, – but there was a reason they choose to work for a very large multi-national firm. Maybe it was job security, training, sophistication of the clients served or any other number of reasons.

Senior members in local CPA firms have to create opportunities rather than have the opportunities given to them. This is not to say that everyone who has worked for a national firm is not an entrepreneur, but rather that firms should very clearly state their requirements and expectations in this area before they hire someone. It is better to not hire at all than to make an incorrect hire that will cost the firm time, money and, possibly even more damaging, great emotional upheaval in the firm.

Emotional upheaval is surprisingly costly, whereas a positive environment contributes directly to profitability. In November 2002, Professor Kahneman, a psychology professor at Princeton, received the Nobel Prize in economics for his work on the impact of emotions on decision-making and profitability of business. Dr. Kahneman documented that the more positive the emotions of the members of the business the greater the profitability.

Many CPA firms hire for skills and pay scant attention to how an individual will fit with the firm. We often hire an individual and then think that we can change the firm to meet their needs rather than insisting that the individual adjust their behavior and actions to the needs of the firm. I have seen firms with more than ten owners add one individual who completely upset and divided the firm. As the old saying goes “one bad apple”… you know the results.

To make better hiring decisions, ask these questions:

• Will this person fit into our culture and be a positive influence on our business?
• Do we have the level of work that will keep this individual stimulated and motivated over the long-term?
• Does this individual have the desire and ability to generate clients desired by our firm?
• Do others in the firm view this hiring decision as positive for the firm?
• Have we fully discussed our expectations with this individual?
• Do we see this individual as truly adding to the value of our firm?

If you can’t answer these questions positively, you might want to reconsider your need for this person’s services. It is much more important to hire right than to hire right now!