June 10, 2021
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“Help Wanted” advising
Lately, a popular topic in this newsletter has been what accounting firms will do next now that the Paycheck Protection Program (PPP) gravy train has tapped out. One way to think about this is to ask: What’s the next problem accountants will help their clients solve?
The most recent problem solved was their clients’ survival. The pandemic threatened many businesses’ existence, and PPP emerged as a popular option for stopping or slowing down that threat. Many accounting firms consulted clients around PPP, cash flow projections, and other services that were critical to scores of businesses surviving.
Now that the pandemic is easing and businesses are reopening in earnest, a new problem has emerged: a lack of workers. Earlier this week, the US Bureau of Labor Statistics reported that there were 9.3 million job openings on the last business day of April, a record. Meanwhile, 4 million people quit their jobs, also a record. In other words, there’s a lot of competition between employers for an increasingly choosy and confident workforce. A workforce that, the New York Times recently reported, is not growing nearly as fast as the number of job openings:
Population growth for Americans between ages 20 and 64 turned negative last year for the first time in the nation’s history. The Congressional Budget Office projects that the potential labor force will grow a mere 0.3 percent to 0.4 percent annually for the remainder of the 2020s; the size of the work force rose an average of 0.8 percent a year from 2000 to 2020.
More not exactly great news: A recent Goldman Sachs survey “found that of the 71 percent of small businesses currently hiring, 81 percent are finding it difficult to recruit qualified candidates, citing a limited labor supply, generous unemployment benefits, and high labor costs.”
Also, more anecdotally, virtually every restaurant I see—from McDonald’s to a local fondue joint—has “Help Wanted” signs. Something’s going on, people!
So how can accountants help their clients solve this problem? Assuming large-scale human cloning is out of the question, one possibility is to advise businesses on how to best attract and retain employees. Put another way: Be a better employer. Because small businesses aren’t going to be able to compete with what big companies are doing:
Determined to lure new employees and retain existing ones in a suddenly hot job market, employers are turning to new incentives that go beyond traditional monetary rewards. In some cases, the offerings include the potential to reshape career paths, like college scholarships and guaranteed admission to management training programs.
Despite an unemployment rate of 5.8 percent in May, the sudden reopening of vast swaths of the economy has left companies scrambling for workers as summer approaches, especially in the service sector. What’s more, in many cases the inducements are on top of increases in hourly pay.
The result is a cornucopia of new benefits as human resources officers and employees alike rethink what makes for a compelling compensation package. And in a pathbreaking move, some businesses are extending educational benefits to families of employees.
So while large businesses throw money at the labor shortage problem, that won’t work every time. As one recruiter told the Times: “Employers are becoming much more cognizant that yes, it’s about money, but also about quality of life.”
And since small businesses don’t have infinite resources to finance scholarships or comp appetizers, defining or improving the “quality of life” for their employees will have to be the opportunity to attract and retain new people. If you’re an accounting firm that advises those businesses, that might be your best opportunity, too.
If you follow the world of auditor regulation, then you likely heard about the recent drama at the Public Company Accounting Oversight Board that happened late last week:
The Securities and Exchange Commission on Friday removed the chairman of the U.S. audit watchdog and took steps to replace its entire board, as the SEC’s new Democratic leader begins to shape the regulator.
The SEC, which oversees the Public Company Accounting Oversight Board, said the departure of William Duhnke was effective immediately and that it appointed board member Duane DesParte to serve as acting chair. It didn’t provide a reason for the changes.
The Commission also announced that it’s looking to fill all five board seats. So, look, I’m not throwing my hat in the ring—but I, for one, think I’d make an exceptional auditor regulator. You wouldn’t even have to make me the chair. I’d be perfectly fine with the $547K that the run-of-the-mill board members pull in.
Well, the Excel Twitter account continues with the pleasant surprises:
The official Microsoft Excel Twitter account has now claimed that financial modelling is an esport, and it promoted an upcoming tournament that will pit top modelers against each other in head-to-head competition.
I’m not an esports person myself, so I don’t have a strong opinion on whether this actually qualifies. Still, I don’t think you can dispute that it’s a competition of a “non-traditional sport” that involves “careful planning, precise timing, and skillful execution.”
Eight spreadsheet jockeys from eight different countries will compete to “use the most of Excel’s capabilities to solve complex problems in no time,” according to the event description on Smash.gg, a platform that is also owned by Microsoft. “… After the battle, we will make sure to share the financial models with the viewers. Use this opportunity to learn some tricks used by some of the greatest minds in financial modeling.”
At the very least, you have to concede that it’s the Excel Olympics. Catch the fever!
Oh. Too soon? Too soon.
Fresh from Gusto
- Nayo Carter-Gray explains Form W8-BEN.
- Jenna Lee takes a comprehensive look at SBA loans.
- A 2021 guide to city and state minimum wage rates.
- A Coaching Experience: Goal Setting with Amber Setter on June 14.
- How to Hire Virtual Accountants Into Your Firm with Jeff Phillips of Padgett Business Services on June 23.
- Ethics: The 4 Most Common Rationalizations Used by Horrible People with Greg Kyte and me on June 30.
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