Grow Your Own Talent: Hire for Attitude, Train for Skills
Written by Greg Crabtree
You have watched your newest hire work for their first 30 days and you are looking back at their great resume and 15 years of experience. All you can think is, “Does he really have 15 years of experience or just one year of experience 15 times?”
It was this experience that led us to make “you have to love training” one of our core values. As we tried to differentiate our CPA firm from our peers, we chose to have professional staff that could do five core areas of work instead of just audits or tax returns. Every time I would try to hire someone with experience, they would be competent in only one area out of the five. Since they also had “years” of experience, they demanded a premium pay that bore a poor relationship to profitability.
Instead of just passing on the cost to my clients of my paying too much for labour, I decided to solve the problem a different way. By growing my own talent, I would be able to keep access to our services more affordable and fulfill our mission of serving businesses between startup and $5 million in revenue. But, I would have to prove we could train people and stay profitable. We would also have to accept the slower growth curve that comes with growing your own talent.
The first step was to identify the five core areas in which we needed them to be competent. For us, that was personal tax, business tax, accounting system implementation, financial statement preparation and forecast modeling. The next step was to identify the personality characteristics needed and screen for those with our test from Caliper. Using Caliper has been like having a corporate psychologist on staff. For a onetime fee of $285 for the test, we get an email with basic results within 24 hours and a call from their consultant to discuss the results. After the call, we get a written report with even greater detail findings within three days. Since we have tested all of our team with this service going back to 1998, the consultant can give us incredible feedback on how new hires will work with an existing member of our team as well as guidance (all included in the original cost of the test) as we transition existing team members into new roles.
Once we hired our prototype employee, we had to schedule the work for them to stretch but not break them. We employed a 70/20/10 training philosophy that we told them when they were hired. 10 per cent of your training will be classroom, 20 per cent will be one on one mentoring and 70 per cent will be throw you off the deep end of the pool to see what you can do. You will take a lung of water, but we won’t let you die. Until I throw them off the deep end of the pool, I do not know what they really can do.
When we started this process in 2003, I had just asked some partners to leave that were not aligned around this mindset and we were at breakeven profitability, down to nine employees and $1 million of revenue. Up to this point, when we added an expensive person with narrow experience, we could get some growth but no profit since they could not be used for more than one service offering and they were resistant to expanding their skill sets. When they would leave by our choice or theirs, we would start the crazy cycle all over again.
By 2010, we were on pace to do $1.8 million in revenue and had 21 employees and were on target for 10 per cent pre-tax profit. The employee we hired as our prototype is still with us and is one of our top client managers. We had only one client manager leave to take a job with a client and only one new hire did not make the cut. Going from turning over one to two professional staff each year to turning over two professional staff in seven years is a pretty good turn around. We have always had plenty of new business opportunities; our only bottleneck was how quickly we could add the right people. This process allowed us to peg our growth rate to our talent development rate.
What did we learn?
- New hires have no baggage to unlearn
- What we thought would take 4 to 5 years took only 2 to 3
- We found new services to sell to clients that also served as training work for our developing team
- People love the opportunity to grow
- We have the capacity to grow 2 people per year
- Hire for attitude, train for skills really work!
GREG CRABTREE has worked in the financial industry for more than 30 years. He founded Crabtree, Rowe & Berger, PC, a CPA firm dedicated to helping entrepreneurs build the economic engine of their business. Crabtree leads the business consulting team, helping clients align their financial goals with their profit model and their core business values. He is the author of Simple Numbers, Straight Talk, Big Profits! For more information, please visit: http://www.seeingbeyondnumbers.com.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.