Keeping good talent: your practice’s greatest risk
Peter Towers
Founder of ESS BIZTOOLS Pty Ltd | Certified Public Accountant | Business Advisor | Mentor and Coach
Keeping good talent: your practice’s greatest risk
In the May edition of the Accounting Market Pulse, CommBank claimed that the greatest limitation accountants have to sustained growth is a worsening talent shortage.
Since that time, that talent situation has become even worse.
Full employment, it seems, is a first world problem and nothing to joke about.
An article in Accountants Daily earlier this year pointed out that 70% of employed accountants were looking around to see if there were better prospects elsewhere.
Only a few weeks ago, the Tax Commissioner poured cold water on the tax compliance industry and turned more than a few heads.
His comments raised concerns amongst employed accountants about the type of work their company is currently handling.
The Commissioner said “you must understand that if your business model is high-volume, low margin, simple tax returns, your business will not be viable in 3 – 5 years.”
A lot of employed accountants are currently working in practices that are just like that – grinding out tax compliance work and little else.
The Tax Commissioner pleaded with accountancy practice partners to “diversify to remain viable for the longer term.”
In fact, he urged them to “focus on becoming a brilliant and trusted advisor.”
During a compelling interview on the ESS BIZTOOLS podcast this week, Jordan Lowry from Blackstone Business Group indicated:
Jordan also pointed out how many employees now assess any offers they receive to join another firm.
He put forward two important recommendations to consider when you’re trying to recruit new staff:
How do you address these issues within your firm?
A few months ago, Australian accounting legend, Andrew Geddes, who was also Chair of the ASX Top 200 company, Green Cross Ltd, for 10 years, made some interesting comments about attracting and retaining young accountants.
Andrew said that partners of accountancy firms often complained there are not enough young accountants around.
But he disagrees.?
He says there are enough of them, but they’ve chosen not to work in accountancy because they’ve only been asked to do compliance work.?With targets of 80% productivity, young accountants were left saying “I’m not sure I want to work in that environment.”
According to Andrew, accountants need to take their in-house team members out on client visits so they can see the outcomes their stakeholders want.
Andrew says the reality is that firms have got to pay young accountants more, teach them, and importantly, the partners and directors have got to make themselves available as mentors.
He says it’s important for younger accountants to work with you as your shadow when you’re dealing with clients. It’s also essential for them to work in your project teams because they learn how to improve the business, how to communicate with clients and they’re gaining experience that develops their skills base.
Andrew Geddes believes that the accountancy profession has got to make itself more attractive for people to work in and that means ensuring your practice embraces technology and is always innovative.
American accountant Adam Hale made some interesting comments in our webinar about 6 weeks ago, when he revealed to Australian accountants that “the US is already experiencing an upheaval with less work now required by accountants when preparing tax returns.?This is because their software and business systems are directly transferring data to the tax office.”
These processes are reducing the amount of time accountancy staff need to put in.?Adam Hale’s firm was very concerned that they’d lose their highly-experienced in-house accountants if they couldn’t offer new services to clients to keep them occupied.??
This led to the creation of their virtual CFO services that Hale’s firm, and now many others in the US are offering.
The American experience has shown that SMEs have responded enthusiastically to a broader range of advisory services being made available by accounting firms.?The same evolution is likely to occur here in Australia.?In fact, some firms have already started.
Accountancy firms can achieve significant benefits when attracting and retaining talent by having a range of new business services available for them to work on. These types of services create interesting and challenging work for your employed accountants and allow your accounting practice to offer a well-trained team of professionals to help your SME clients add value to their businesses.
You can round out your practice’s business offerings with value-adding services for SMEs, while still providing them with tax returns and advice, together with virtual CFO services.
ESS BIZTOOLS has a complete range of products available.?Please visit us at www.essbiztools.com.au.
We would like to congratulate Success Tax Professionals at Mooroolbark VIC on winning the Holiday Accommodation Package!?We hope your firm nominee enjoy their well-deserved holiday.
We’re giving away another holiday accommodation package this week!?Click here to enter.
The next winner will be drawn on Wednesday 12th October 2022 at 9.30am AEST/10.30am AEDT.?Good luck!
Accounting News
Cyber security – big conversation topic this week
Cyber security has been the big conversation topic this week following the massive data hack at Optus.
Directors and senior management teams across the country are hoping they’re not going to be next.
With the fallout from the Optus cybersecurity breach still fresh in the minds of corporate Australia, Deloitte has added a dedicated cyber consultancy to provide advice and protection for its clients.
Since the breach, many public company directors have become concerned about their personal liability for data security.
The creators of Hacktive, a 2018 start-up, have been brought into Deloittes to head up their cyber risk advisory.
Hacktive will become part of the group’s Australian Cyber Intelligence Centre.
Along with the Hacktive’s original owners, a team of 10 specialists will also be making the move.
Deloitte’s risk advisory partner, Steve Jansz, says managing cyber risk is critical for every business migrating to the digital space.
Are you taking the right steps to protect against a cyber attack?
Article from Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
The recent cyber attack against Optus is a terrible reminder that companies of all sizes can be vulnerable.
If you or your business are an Optus customer, please monitor for activity on your accounts that is not you and be alert for unusual contact from scammers.?Optus says its email and SMS notifications will not have hyperlinks and customers should not click on any links sent to them claiming to be from Optus.
Similarly, do not provide passwords on emails, text messages or social media and don’t allow access to your computer from anyone who contacts you, even if they seem credible.
Sadly, we know that vast numbers of small and family businesses every year are being compromised and, in some cases, profoundly damaged, by a range of scams and cyber attacks.
The Australian Cyber Security Centre has declared October to be cyber security awareness month and is releasing updated step-by-step guides to help individuals and businesses protect themselves against, and respond to, cyber threats.
This includes a tool to help you assess if you’ve been hacked by guiding you through a range of scenarios with advice on how to best respond.
The guides will be available here and there is more information in the article below.
I urge time-poor small business owners and managers to stay secure online and practice good cyber hygiene habits.
You wouldn’t leave the shop unlocked when you go home at night or your van or vehicle with the keys in it and motor running. So please don’t leave your online business similarly vulnerable.
There are simple steps that you need to make time to do:
Importantly, trust your own judgment, listen to your “spidey” senses.?We often hear hacking victims say it didn’t quite look right but I clicked it anyway and then realised the sender wasn’t quite right or the link had a different address to what I thought it would.
My clear message is don’t be on autopilot. If it doesn’t look right, feel right or make sense then don’t click it and seek help from a trusted adviser.
If you believe you have fallen victim to cybercrime, you should immediately contact ReportCyber.
If you are concerned that your identity has been compromised, contact the national identity and cyber support service IDCARE.
The Australian Cyber Security Centre has provided advice for current and former Optus customers.
Optus says customers who feel they’ve suffered any loss as a result of the cyberattack should contact the company on 133 937.
Cyber Security Awareness Month 2022
Article from Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
October is Cyber Security Awareness Month and the Australian Cyber Security Centre’s (ACSC) theme for 2022 is “Have you been hacked?”.
Throughout October, the ACSC will focus on a number of weekly themes, including “Is your email secure?”, “How to act now to stay secure” and “It’s time to take action!”.
To complement Cyber Security Awareness Month, the ACSC has also built a helpful tool – also titled “Have you been hacked?”, which is available at cyber.gov.au.
The first steps to staying cyber secure are turning on automatic software updates, regularly backing up your devices, switching on multi-factor authentication, using passphrases, securing mobile devices, and watching out for cyber scams.
The ACSC has free resources available for all Australians, including step-by-step guides, quizzes and advice to help stay cyber secure.
Cyber Security Connect Special Live Stream
Cyber Security Connect presented a live broadcast, with a panel of industry specialists detailed the essential lessons that all Australian businesses need to know following the Optus hack.
Click here to watch the live broadcast.
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Director ID Deadline
Article from Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
Many small business owners don’t realise if they run a company or a registered body, or are a director of one, then they are required to have a Director Identification Number (Director ID).
The deadline to register is 30 November 2022.
You do not need a Director ID if you are running a business as a sole trader or partnership.?But this can be confusing, so it is worth checking with a trusted adviser or the Federal Government’s Australian Business Registry Services.
It is free to apply, you only need to apply once, and you keep your 15-digit Director ID number forever.
Director ID has been introduced to crackdown on the use of false or fraudulent director identities and catch people who might engage in illegal phoenix activity, move interstate or even change their name.
Illegal phoenix activity is when a company is liquidated, wound up or abandoned to avoid paying its debts. A new company is then started to continue the same business activities without the debt. Yet employees miss out on wages, superannuation and entitlements, suppliers or sub-contractors are left unpaid and other businesses are put at a competitive disadvantage.
Scam targeting Australian SMSF busted
A call centre in the Philippines used to scam Australian super funds has been raided but its British owners are yet to be charged.
The raid by Philippines National Police was carried out on a cyber warrant issued by a court in Manila.
Foreign scammers are getting more daring and more desperate as they look to score off unsuspecting marks in many wealthy western countries.
The latest targets in their sights are Australian Self-Managed Super Funds (SMSF).
Security company, IFW Global, had been watching the Manila call centre since 2020 gathering enough information to convince local police to take action, which they did with a full-scale raid this week.
People in the call centre had been using sophisticated technology to pose as Australian Securities Administration Limited staff and convince SMSF trustees to reveal their financial security details.
29 Filipino workers were detained and mobile phones and computers were seized.
However, the 53 year old British business owner was questioned and released without charges being laid.
RBA’s “unconventional” rate hike move
Australia’s RBA is copping some flak internationally with claims that the central bank has wimped out on the fight against inflation.?
On Tuesday, the RBA hiked the interest rate by only half of what most economists were expecting.
With other central banks around the world raising interest rates often a half-a-percent or more each month, most Australian economists were stunned when the Reserve Bank Governor, Philip Lowe, announced a modest increase of just 25 basis points this month.
Following his announcement, the ASX finished with best day in quite a while.
The Governor had indicated a mildly dovish approach during a speech at the National Press Club in September, but only the Commonwealth Bank expected a pullback from the last four 50-basis point rises.
CBA Head of Australian Economics, Gareth Aird, says the RBA was right to take a wait-and-see approach.
Despite this month’s less aggressive rate hike, the RBA says it’s committed to returning inflation rate to between 2-3%.
Queensland government backflips on the controversial land tax scheme
Interstate property owners with investments in Queensland can finally breathe a sigh of relief.
The Queensland Premier has been forced into an embarrassing back down from her controversial land tax plan after other state leaders rebelled against her.
Described as a “cash grab”, the Queensland Government’s proposed changes to land tax would have seen property investors in other states having their state tax assessed on the total value of all their holdings Australia-wide.
This would have significantly increased the rate they would have had to pay.
More than 10,000 investors would have been paying Queensland around $20M a year extra.
The backlash to the tax announcement was immediate and resoundingly loud, with media across the country condemning the move.
NSW Premier Dominic Perrottet was the first state leader to refuse to provide home ownership information to the Sunshine State.
In light of the strong nationwide opposition, Queensland Premier Annastasia Palaszczuk had to finally admit defeat and dump the tax.
Australia’s top 500 private companies revealed
If you’ve ever had the feeling that in accounting you’re working in a “go nowhere” industry– think again.?
It turns out that accounting services now make up nine of Australia’s top 500 private companies.
Australia’s biggest private companies are nothing to scoff at.?They’re big business.
The largest of them, Hancock Prospecting, turns over an eye-watering $19B and Visy holds down second place with $9.3B.
Yet, even surrounded by company like this, Australia’s top accounting firms can feel right at home.
EY was ranked number 8 with a turnover of $2.75B. PWC took 11th place on $2.6B and Deloitte were hot on their heels at 14th with a $2.49B turnover.
To qualify as a private business, the operation must be a privately held company, a partnership, co-operative or non-listed public company.
The survey was conducted by IBISWorld.
‘Laissez-faire’ Productivity Commission calls for incremental innovation and diffusion
With more worrying signs about business innovation in Australia, the Productivity Commission has proposed shifting policy focus from incentives, grants and public research to create our own inventions to importing ideas and adjusting market settings through tax, regulatory, and immigration reform.
Click here to read the full article from Innovation Australia.
HECS-style loans for student startups as soon as next year
HECS-style loans for university students and recent graduates to launch innovative new companies could be on offer as early as next year, with consultation on the federal government’s planned “Startup Year” program now underway.
Click here to read the full article from Innovation Australia.
Grants Update
There are number of grants for which your SME clients might be eligible.
Want to know what they are??Click here for a list of current grants, prepared by ESS BIZTOOLS.
ESS BIZTOOLS - New Subscriber Benefit
For a limited time, ESS BIZTOOLS is offering you a complimentary holiday accommodation package.??
You can enjoy a 4-day/3-night stay in a wide range of idyllic destinations throughout Australia.?Simply subscribe to one of our packages (paid 12 months upfront or in 4 equal monthly instalments) to claim.
Our featured product package this week is Starter Package
Click here to find out more.
ESS BIZTOOLS - Podcast
Peter Towers, Managing Director of ESS BIZTOOLS and Jordan Lowry, Director of Blackstone Business Group, discuss attraction and retention of accountants and other issues facing businesses.
Latest Social Media Post
ESS BIZTOOLS has presented a series of posts over the last week.
Free Webinars
You are invited to participate in the following webinars, free of charge.?Click on your preferred event to register your attendance.
Biggest Risk – Talent Attraction and Retention Do You Have Strategies? – Thursday 20th October 2022 at 11.30am AEST (12.30pm AEDT)
Previous Education Event – Offering Virtual CFO Services
Want to know more?
Visit www.essbiztools.com.au.?You are also welcome to visit www.essbizgrants.com.au, a website that can assist in the identification of government grant(s) suitable for your clients.
If you would like to have a discussion about how this concept of virtual CFO services can be supplied by Australian accounting firms please ring our Managing Director, Peter Towers, on 1800 232 088 and we will arrange a complimentary 45 minute Zoom meeting to discuss your firm’s position and to give you our advice.
We believe that this is the blueprint for the delivery of an enhanced range of services by Australian accounting firms to assist SME businesses to add value to their businesses and to assist accountants not only to attract but to retain outstanding talent who want to be involved in the delivery of “real accounting services”.