“You have to get in an advisory mindset, so you can provide value to your clients,” says every expert on the accounting profession. If you don’t adapt to this mindset and become invaluable to your clients STAT, you’ll be irrelevant faster than a blacksmith with a fax machine.
Small problem: Changing a “mindset” and providing “value” aren’t very specific! In order to define these for your firm, you’re gonna have to think.
That’s why we’ve developed this guide. This guide will discuss how accounting firms can begin building a HR advisory service to offer their clients. Here’s a quick table of contents that will allow you to bounce around:
|Table of contents:
– Why HR?
Yes, this is an area that many firms may have never considered, but it’s a perfect place to start if you’re ready to upend your mindset about advising clients to bring them even greater value.
Where all the CPAs are above average.
For several years now, the “trusted advisor” has been the chosen moniker of firms hoping to stand out from their peers.
The only problem is the “trusted advisor” label struck a chord a little too well. Nearly every firm out there now claims to be a trusted advisor to differentiate itself. It’s like the professional services version of the climactic scene in Spartacus.
“I’m a trusted advisor!”
“I’m a trusted advisor!”
“I’m a trusted advisor!”
So if everyone claims to be a trusted advisor, the obvious question becomes: Who really is a trusted advisor? There seem to be some Certified Poseur Accountants out there.
There are a lot of good reasons for choosing HR advisory that we’ll get into later, but for now, let’s start with some basics.
You might think that HR is something only big businesses need to worry about. That couldn’t be further from the truth. Since small businesses have limited resources, most won’t have a dedicated HR professional—which means they need help the most to handle tricky and sometimes litigious team issues.
Having their accounting firm advise them on how to best tackle these issues will be immensely valuable.
How do we know that it will be valuable? Science! A 2016 study found that “companies with a formal engagement strategy in place are 67 percent more likely to improve their revenue […] on a year-over-year basis.” An engaged workforce is a more productive one no matter the size, and that increased productivity leads to more revenue for a business, and a better bottom line.
“What does HR advice have to do with employee engagement,” you ask? In a small business, driving employee engagement falls to the owner or owners of that business. This can include:
- Letting employees know how they can make a difference in the business;
- Compensation policies that incentivize employee engagement;
- Communicating company strategy and goals that employees can understand and connect to;
- Providing paths for career growth and development;
- Recognizing and rewarding exceptional performance;
- Offering benefits that show they care about their employees’ well-being.
Newsflash: Many small business owners don’t have time to do this!
HR areas like recruiting, training and development, compensation, and performance management can all have an impact on employee engagement and business success. So accounting firms that commit themselves to building expertise on these issues will position themselves as an invaluable resource.
What does the HR function entail? Off the top, it includes:
- Payroll — This covers everything from taxes to overtime pay to raises to direct deposits.
- Benefits — Healthcare is the big one, of course, but also retirement, family leave, and more.
- Hiring — Finding and retaining talent, interviewing, onboarding, assessing performance, etc.
- Managing — This includes things like assessing performance, learning and development, developing workplace policies—all while communicating effectively with the team.
- Compliance — Oh look, everything above has a compliance component to it: Did you remit payroll taxes? Is your business subject to federal and state unemployment taxes? Are you required to offer health insurance? Have you—gulp—unwittingly discriminated against someone during the hiring process? Have you made all mandatory communications? Egad, this is a lot of work.
Depending on the business, this list might be just the tip of the iceberg—or it could be overkill. Again, knowing your client and their needs will be crucial. The whole idea is you’re going to advise clients on these HR matters, so you’ll need to build knowledge and credibility in these key areas.
How can you best advise them, especially when you’re just getting started? Here are a few ideas:
- Use the tools available — Most small businesses, believe it or not, rely on manual processes to manage HR. Not only is this unnecessary, but it’s wildly inefficient. There are lots of technology solutions out there to help businesses organize and automate a variety of tasks, from payroll to recruiting to benefits to employee engagement. Firms that use these tools will have access to the experts and can start to develop their HR chops.
- Crunch some numbers — I know, sounds wild for a bunch of accountants, but hear us out. Assuming your clients like you, that fondness is probably because you can make numbers dance like Fred Astaire. (No? Okay, Michael Jackson. Or maybe Misty Copeland if you want to keep it highbrow.) The point is, put your skills to work by plotting out a few scenarios that show how investing in HR technology and personnel might affect their bottom line.
- Consider outsourcing — Sometimes the best thing you can do to help is take something off your client’s to-do list. We’ve seen this trend in bookkeeping as many online (aka cloud) accounting software solutions have allowed countless firms to take this task over from their clients. Some firms are already doing this with HR, too. Whether this means your firm takes on the task by working with a third-party service or you choose to handle it yourselves, your knowledge of the potential solutions will demonstrate your ability as a problem solver. Presenting options, the pros and cons of each, and making recommendations will go miles toward building trust with clients—and could lead to winning more business.
This all sounds good, right? Yes, of course, but you may be a little confused about where to start. Fortunately, we have a few suggestions:
Stuff to consider:
- Find your champion — It will be vital for someone to lead this new HR/benefits advising service. Ideally, that person would:
- Want to do it.
- Already have some knowledge on HR and benefits.
- Not be afraid of making mistakes, taking risks, or trying new things.
In a pinch, you could probably settle for someone who meets conditions A and C. Maybe this will be a current partner or employee. Or maybe it won’t, meaning you’ll have to hire someone. All this stuff will require some noodling. You’ll want this person to be committed to leading and learning this new service area of your firm.
- Pricing — Speaking of vital things, how your firm prices the HR/benefits advisory service will be a big part of making it successful. Because you’ll want to have regular touch points with clients, obtain some new knowledge and skills, and spend a lot of time just figuring things out, billing clients by the hour will not be a good option.
- Talk to your team about the value that HR and benefits advising would bring to your clients.
- Once that value has been identified, shape the service offering. Will the service be ongoing? Or will you simply provide setup and implementation guidance?
- Find clients who are willing to give you feedback on these proposals. You’ll learn a lot about what they want (or don’t want) from you in this new service offering. Value pricing and alternative fee arrangements will help your clients achieve the outcomes they want without feeling like they’re being nickeled and dimed for every 10-minute conversation. Settling on an equitable scope of work and price up front—before work begins—will put everyone’s minds at ease around a very touchy topic.
- The pitch — If your clients aren’t expecting it, the idea that you’d like to advise them on HR and benefits might catch them by surprise. Prepare for these conversations by:
- Knowing your firm’s story — It will be vital that you know it and tell it, especially if some clients seem skeptical.
- Be prepared for lots of questions — Skepticism means questions. Be honest about why you’re developing this offering. This isn’t just about your firm making more money (although that’s always part of it); your firm is building a business that wants to be indispensable to the success of its clients.
- Give them options — Beyond the story, you’ll want your service offering to be clear, and you’ll want to give your clients options. Everybody loves having options. Present them in tiers, metals (e.g., gold, silver, bronze), or something else that provides clear choices with different levels of service.
Actions to take
- Bone up — Once you have your champion, then it’ll be important for them to begin building up their skills, expertise, and relationships with technology and other potential partners. The issues are vast and sometimes complicated, so no one should take the foundational work for granted. If you already have an expert on staff, they can train and educate others as necessary.
- Ask your clients questions — If you’ve never brought up HR before, then obviously this is the perfect time to do so. But don’t overthink it! Questions like: “How’s hiring going?” and “Do your employees ask about health insurance frequently?” or “How does your team feel about your benefits package?” will get the discovery going.
- Always! Be! Closing! — If you can hire Alec Baldwin, then good for you, but you probably don’t need him. This is the part you already know: You don’t get what you don’t ask for.
Next stop: Trusted Advisorville.
You’re well on your way to actually being that essential business advisor to your clients and not just slapping some words on your website. By establishing an HR and benefits advisory offering, you’ll be providing value to your clients that directly impacts their bottomline.
If you want more insight into building an HR advisory practice and benefits advising, check out our full guide with examples and more suggestions for getting started.
How you build these tasks and how they are executed will be up to your teams, but we hope this guide gives you some things to think about and some actions to get you rolling.