The partners of a small accountancy firm have just made a radical new appointment: the firm’s first HR manager. The firm, which has 9 partners, has grown to 150 employees. Now, the partners feel their people management activities need more professional support. They have always prided themselves on running a friendly, caring style of staff management but other firms like them, with around 100 to 300 staff, typically appoint HR specialists.
Accountancy might seem to be about numbers but they know that running an accounting firm is actually a people business. It depends on recruiting good staff, training them in the key practices of professional accountancy, paying as well as you can (but not over the top), doing your best to hang on to high performers, and so on. Every year, the partners collectively monitor each other’s profit performance and engage in the soul-searching process of deciding who, if anyone, will be offered the ultimate accolade of being invited to join them in partnership. The firm is successful and being a partner is hard work but very rewarding.
The new HR manager has actually arrived from the public sector but from no ordinary part: from an elite department within it. This is a branch of government which only recruits people with first-class honours degrees from the top universities and which invests heavily in their ongoing development. The department, which will remain nameless, is not one of the mainstream parts of the public service, where budgets are always under pressure, but a small, select cadre dealing with the crème de la crème, much as the French do in the higher echelons of their public service. Its HR policies are well established, well resourced and well insulated from other branches of government.
The new HR manager, Sue, was an HR advisor there and, like everybody else, has a first-class degree from an elite university and, in her case, a flair with foreign languages. Even though she had no private sector experience, she told the partners she was keen to get into private-sector HR work and develop her career further on this basis. She feels more attracted to the private sector than the public, despite the excellent conditions she enjoyed in the elite unit. She clearly sees herself as rising, in due course, to a position as HR Director in a top-100 company. The partners responded warmly to this and decided to recruit her because they considered her experience in the management of professionals would have carry-over value to their firm.
Things went well for the first three months. Sue immediately threw herself into helping the firm with its annual recruitment of new accounting graduates. This greatly relieved the managing partner and his PA, who had previously handled this work themselves and could now rely on someone to handle campus liaison, presentation of the firm at recruitment fairs, and initial screening of candidates to create a set of ‘good possibles’ that the partners could review.
Now, however, the partners are worried. Their staff have been coming to them to discuss what they (the partners) consider to be unrealistic expectations for personal
development. From these conversations, they discern that Sue has been talking freely with staff about the career development programme where she worked previously. There, it transpires, staff were encouraged to enrol in postgraduate degrees at the employer’s expense (all fees paid) and were, in fact, allowed plenty of paid time off to attend classes and also to prepare for exams. This largesse was available after only one year with the department. Sue was talking freely about this personal development policy as an HR ‘best practice’ and staff were getting the idea from her that the firm should adopt more generous HR policies and become an ‘employer of choice’ in the industry.
They decided to call Sue in for a meeting to hear her views on HR issues in the firm. Sue started by talking about ways of improving their employee selection practices through some tests to assess cognitive ability rather than relying on university grades and a more formal method of reference checking for experienced job hires. All this sounded good and the conversation ran along in a non-threatening way for some time. Then, Sam, the managing partner, decided to grasp the nettle:
I think I speak for the partners when I say this is all very good, Sue. We like your ideas on how to make this firm a more effective recruiter and I know I’ve benefited already from your assistance with this year’s graduate recruitment. However, something has changed in the last 3 months that we are not so sure about. Staff have been coming to partners with the idea that the firm should pay for postgraduate study for them and give them generous time off for study. We’ve never done this sort of thing before and, more importantly, we try not to raise these sorts of expectations. After all, everything we do has to be charged to clients and, as we explained to you at your recruitment, we’re not a first-tier accountancy firm… We’re in a tier of small and mid-size firms where we try to pay well relative to our competitors and can look after people, up to a point. People often come to us because they don’t want to work in a huge firm where nobody takes any notice of them. They’re not the A students but they are good B students who can do the job well enough. We have a personal touch with our people. When Jayne, who has worked for our tax section for 28 years, had a stress breakdown last year when her husband died suddenly, we gave her 3 months of paid leave to help her recover. That’s the sort of thing we do but we’re never going to be big spenders on further education for new staff. There’s always going to be a high rate of attrition among new accounting graduates. At least half of them will leave us after 3 years, that’s the reality. We see their best development as taking place through the experience we give them, not through more education …
Sue thought for a while and then responded:
Well, I think you are in the game of managing professionals and professionals have these sorts of expectations these days. I think you have to change or … die. Yes, I think it’s as serious as that: you need to evolve beyond a small-firm mentality. Any HR professional will tell you the same thing. How do you expect to become more successful if you don’t embrace best practice?
At this point, another senior partner, Joe, chipped in:
But we are successful! Your view is simply not commercial. It’s not something accounting firms operating in the private sector can take seriously. If one size fits all in ‘HR’, then I say, ‘HR be damned’.
This brought a nervous laugh or two and, as it was now after 6pm, Sam, sensing the need to de-stress the situation, suggested they adjourn to the pub. Perhaps they might be able to take the matter further there, in a more relaxed vein ….
The questions
1. Why do you think the partners are comfortable with Sue’s ideas for improving the recruitment process but antagonistic to her ideas on employee development once employees are hired?
2. Has Sue misjudged the context in which she is now working or has she rightly started a healthy process of challenging the traditional culture in this firm? Does her concept of ‘best practice’ show sensitivity to the importance of cost-effectiveness when it comes to evaluating ideas for HR policies? Why/why not?
3. Do you have any comments to make on how:
a) the partners have managed Sue so far?
b) Sue has approached her relationship with the partners?
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