The Accounting Department Manager, Maureen, was sharing with an Abel Personnel recruiter what has become a common predicament in the business world. “We posted the position of staff accountant for four weeks to replace some recent departures plus meet growing demand. Those qualified wanted to work from home or have flexible hours; those willing to work a standard 40-hour week needed salaries above our pay scale.”
“In a tight labor market, you’ll need to expect to pay higher salaries. Desired pay rates may come down with a recession, but there’s no certainty if or when a recession will happen,” the recruiter responded.
“I’ve explained that to my management. All they see is the need to control costs and keep our clients happy. Besides, if I pay what the better candidates require, I’ll be bringing in new employees at higher rates than the existing employees. Meanwhile, I have unsatisfied clients who rely on us as their ‘in-house accountants,’ and I’m behind on my revenue budget because I don’t have the staff to bill out.” Her despair was palpable over the video connection.
The recruiter had been busily typing as Maureen was presenting her concerns. When there was a pause, the recruiter shared her screen:
- The position requires 5-7 years of experience, 8 hours per day availability, and regular in-office and client office meetings of significant duration.
- Qualified candidates want more flexibility or a higher salary (or both).
- Higher salaries will result in a payroll budget overrun.
- Higher salaries will result in salary disparities that could affect morale and require existing salary adjustments (see #3 above).
- Positions left open result in unhappy clients, unable to serve new clients.
- Positions left open result in the missing revenue budget.
“You nailed it,” replied Maureen. “Perhaps I should rethink my requirements and be more flexible. My clients won’t be happy if we aren’t on call during regular business hours and can’t stop by, and I may lose some of them, but what other choice do I have to meet cost and revenue budgets?”
“Not so fast,” the recruiter counseled. “Asking clients to settle for less is a ‘race to the bottom.’ Your client base will shrink to the size that your reduced workforce can handle, or worse. If we accept the needs and wants of your client as a given, I think we can recruit based on whichever these options might be acceptable to you and your management.”
The Abel Recruiter shared the following:
- Reorganize into teams. Each client would be assigned a team of two. The team members could flex as long as coverage of the week and needed office visits could occur. The teams could have part-time staff, but only if this arrangement does not increase the client cost. It would also allow knowledgeable coverage when one team member was on vacation or otherwise out.
- Determine what salaries could be paid to the new staff, and adjusted for existing staff, in a way that would still allow full coverage of existing and new client needs – thereby meeting or exceeding revenue goals – and still yield an acceptable margin of profit.
- The client brings on a staff accountant and a temp to handle invoicing which would bring the client up to current with their billing.
- The Abel Recruiter sources for a Staff Accountant who is willing to work onsite. Some employees are realizing that they’re ready to return to the office after working remotely (salary would still need to reflect what is out in the job market). Part of the benefits package could include additional PTO time and/or the flexibility to work remotely x number of times a month.
Maureen was intrigued but needed to run some numbers and discuss these options with her senior management.
As the Abel recruiter emailed Maureen copies of the two slides that had been shared, she cautioned, “If the candidates you have seen are requiring higher salaries or more flexibility than you are delivering to your existing staff, which is what I’ve been seeing, then there is a risk that your competitors are going to contact your staff and offer them higher salaries and benefits. Sometimes we need to realize that a high-profit experience is coming to an end for a while, rather than think we can always see high profits regardless of changing economic conditions.”
“Funny, that sounds like the advice my firm gives to our clients!” Maureen chuckled. “Sometimes you need a vendor partner to help you discover what you already know.”