Undoubtedly, the biggest problem facing CPA firms today – whether they have one employee or 1,000 – is turnover. The most recent AICPA research suggests turnover rates, on the rise for the last decade, have reached a staggering 26 percent in public accounting.

Understanding what drives today’s professionals is critical and must be the first step in the process of developing and implementing new paradigms for retaining young professionals.

Who Are These People?
Baby Boomers – in the age range of 41 to 61 – certainly dominate the upper management levels of CPA firms. Succeeding generations, Gen X (age 30-40) and Gen Y (under 30), are at the crux of the CPA profession’s employee retention conundrum.

A simplified profile would show some significant differences between the Boomers and the Gen X and Gen Y workers. For example, these young professionals:

• probably grew up with a working mother
• saw parents lose jobs and a watched the labor market turn to “employment at will” (thus, decreasing loyalty to organizations)
• work in a more demanding 24/7 global economy
• grew up with technology
• experienced the events of September 11th at a formative time in their lives, particularly Gen Y.

In a comparison to senior level CPAs (partners, directors, senior managers), Gen X and Ys are much more likely to be part of a dual wage earner family. Nearly 80 percent of the married population consists of dual wage earners, while only 50% of partners fall into that category. That means most young workers do not enjoy the same support system on the home front as senior level CPAs.

Perhaps related to this increase in dual wage earning families is a shift of household chores between generations. Research shows that women are still doing the majority of what has been coined the “second shift,” that is, household and child care after working outside the home. However, as compared to 25 years ago, men are now spending approximately 42 minutes more a day on household chores whereas women are doing a comparable amount less. Gen X and Y men also spend 50 percent more time with their children than Boomer men with the same age children.

One of these ways these types of differences can be encapsulated is by looking at work/family priorities. Sociologists have classified people as family-, work- or dual-centric. This refers to placing higher priority on family, or work, or equal priority on both. Gen X and Yers are generally dual- or family-centric, and are much less likely to be work centric than Baby Boomers.

While it may sound good to be work-centric, work-centric employees aren’t necessarily more desirable. Dual- and family-centric employees have significantly better mental heath, greater satisfaction in their lives and higher levels of job satisfaction. It boils down to this: more satisfied workers are less likely to leave.

So does all this suggest that Gen X and Gen Y are a bunch of slackers? Clearly data does not support this supposition. Gen X employees actually work more than their comparable age employees did 25 years ago. This is means that they are actually rising to meet the challenge of a more demanding 24/7 global economy. However, at the same time these employees place higher value on time away from work, and face greater at-home-demands, than their Baby Boomer superiors.

I Just Want To Be Valued
While these generational differences show how the younger people in your firm see the world, it is just as important to recognize that the world itself is changing.

Across all generations, research shows interest in advancement is declining.

Over the ten-year period of 1992-2002, the number of men interested in advancement dropped from 68 percent to 52 percent. For women, the decline was even more significant: 57 percent in 1992 compared to 35 percent in 2002.

Looking specifically at public accounting, we know that the majority of professionals enter public accounting not planning to stay to the partnership. In fact, only 51 percent of senior managers want to be partners, and the percentage is considerably lower for female senior managers.

These numbers clearly show that promotional opportunities may be important to some, but many are not motivated by possible advancement along the partner career path. Instead, firms must begin to think creatively about how they can link innovative motivational rewards to the younger generations’ values system. The proverbial “golden carrot” of the partnership no longer has the same glitter for Gen X and Yers that it did for Boomers.

Moving Forward
Understanding the changing demographics of today’s young professionals is the first step in developing opportunities and policies which will stimulate long-term loyalty and employment.

About the Author
Elizabeth Dreike Almer, PhD, CPA (California) is Associate Professor of Accounting and Meadows Faculty Fellow at Portland State University, Oregon. She serves on the AICPA Work/Life and Women's Initiatives Executive Committee. Dr. Almer can be reached at elizabetha@sba.pdx.edu.