Small Business HR Strategy for a Growing CPA Firm

Introduction

This paper presents a small business human resources plan developed for a specific scenario: a company approaching one hundred employees that still lacks a distinct, dedicated human resources department. The goal is to fill that void by proposing a coherent HR direction. A certified public accountant (CPA) firm familiar to the author serves as the basis for this analysis. The points of analysis include the company's strategic direction over the next five to ten years, an overall human resources strategy, the competitive advantage associated with that strategy, and an HR scorecard covering the four standard dimensions of financial performance, customer service, internal processes, and learning, growth, and sustainability. While human resources is not a distinct priority for many small to medium-sized businesses, it is a function that should be taken seriously and handled thoroughly.

Company Overview and Growth Strategy

Growth prospects over the next five to ten years depend entirely on the nature of the industry and the opportunities available within it. The firm under analysis is a CPA firm that handles tax filings for small businesses and individual clients. The accounting and CPA industry is growing quickly, and tax laws are added to or modified virtually every year in some form. The need for qualified accountants and similar professionals is at an all-time high, and that demand shows no sign of diminishing unless a revolutionary overhaul of the tax code occurs — an unlikely prospect.

The firm's overall strategy is to grow through online advertising and word-of-mouth referrals. Referrals, in particular, represent a significant business driver. The firm strives to provide excellent customer service and has demonstrated genuine competence in doing so. This commitment has generated a large volume of new clients who come to the firm based on recommendations from family or friends. The high referral rate has allowed the business to avoid heavy advertising expenditures, which benefits the bottom line considerably.

Given that the firm already employs approximately one hundred people, adding a dedicated human resources function is an absolute necessity. Relying on reporting managers and other personnel to self-manage HR tasks would be inadvisable. When too many hands are involved in human resources processes, inconsistency across managers and departments becomes nearly inevitable. Moreover, professionals in non-HR roles should not be expected to focus their attention on functions such as hiring, onboarding, and orientation. Reporting managers can and should remain involved in employee reviews, disciplinary decisions, and final hiring approvals, but a dedicated HR department can absorb the initial screening of applicants, policy communication, and other administrative responsibilities. As the company continues to grow, centralizing these functions will be vital to maintaining consistency and allowing staff in other departments to concentrate on their core competencies (Reed & Bogardus, 2012).

Human Resources Strategy Frameworks

Most companies tend to gravitate toward one of four general human resources strategies. Understanding each provides the foundation for choosing the right approach for this CPA firm.

The loyal soldier strategy emphasizes hiring and retaining employees who will perform whatever tasks are assigned to them. Roles in this model are typically broad, and recruitment focuses heavily on organizational culture fit. The firm works quickly to build a strong bond with new hires in order to reduce turnover. Employees are often recruited early in their careers and given extensive training.

The bargain laborer strategy prioritizes employees who do not command high wages. Because accountants are typically well-compensated relative to the broader labor market, this strategy is not applicable to the CPA context and will not be discussed further.

The committed expert strategy focuses on hiring and retaining individuals with deep expertise in a specific discipline. Accounting is a quintessential example of a field that naturally suits this approach.

The free agent strategy centers on individuals with critical, in-demand skills who are unlikely to remain with a firm for the long term. Like the bargain laborer strategy, this approach does not align well with most accounting firms, where retaining skilled employees is a clear priority over short-term staffing or high turnover (Stewart & Brown, 2011).

Conclusion

The CPA firm analyzed in this paper is performing well. However, it must create a distinct human resources department and centralize HR functions to ensure that those functions are handled consistently and efficiently. This centralization will provide a meaningful competitive advantage: the absence of a structured HR system is a drag on business efficiency and performance, and eliminating that gap positions the firm to scale more effectively over the coming years.

References

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EEOC. (2015). EEOC home page. Retrieved July 17, 2015, from http://www.eeoc.gov

Reed, S., & Bogardus, A. (2012). PHR. Hoboken: John Wiley & Sons.

Stewart, G., & Brown, K. (2011). Human resource management. Hoboken, NJ: Wiley.

Appendix I — HR Scorecard

Financial: Our mission is to spend money as needed, but in a way that is ethical, grows the firm, rewards our employees with good wages, and provides our customers with quality service.

Internal Business Processes: Our internal business processes should generally be transparent to the customer and should function in a consistent, streamlined, and practical manner.

Customer: Our customers are the core of our business, and we would be nowhere without them. As such, we must value them and deliver excellent service at all times.

Learning & Growth: Our organizational mission should include facilitating the learning and professional growth of our associates so that they can realize their career and knowledge goals.