As Canadian organizations take their first tentative steps into the economy of the 21st century, the need to employ the best and the brightest in human resources has never been so clear. This is especially true for accounting firms that earn their revenue as a direct result of the skills and efforts exhibited by their staff. It has long been part of the strategic planning of such firms to at-tract the best candidates, especially in a shrinking labour market. Tremendous financial resources have been allocated to achieve this goal, the most obvious being the dramatic increase in salaries for new CAs and those starting their studies. In fact, salaries paid to cooperative education students have increased by more than 13% in one year, based on recent surveys from Wilfrid Laurier University in Ontario. Other techniques used to attract top candidates include a strong recruiting presence on university campuses, state-of-the-art recruiting presentations and written material, attractive UFE financial packages and exam-writing support and more lucrative signing bonuses.

While the wine and dine approach may be age-old, it is still very effective. A recruiting lunch in a five-star restaurant can go a long way to impress students who have sustained a diet of fast food and Kraft Dinners during their university career. 

Ironically, however, some of these firms have yet to allocate the same level of resources to keep their star employees in the fold once they obtain their CA designation. The brain drain, most notably to industry, within the profession is a real and pervasive problem that has not been adequately researched. How can firms hold on to their top performers? For starters, they can adopt a planned approach to employee retention and become an employer of choice. Several tools can be utilized to achieve this goal.

Orientation programs
In far too many organizations, formal orientation programs consist of a tour of the office, signing payroll forms and an introductory lunch with co-workers. Yet, many human resource studies have shown that companies with formalized, successful orientation programs are more likely to retain key employees -- especially within their first year of employment. Management tends to ignore the fact that the orientation experience can impact either positively or negatively on the morale and attitude of employees.

A positive orientation program will include the following:

• An overview of the history of the organization and description of its markets, products and services
• A review of the organization and management structure, and of the key organizational and human resource policies
• Introductory training material
• Introductions to staff and managers
• Training on firm technology including computer network, e-mail, photocopiers, fax machines and voice mail.

It is also advisable to link up new recruits with a buddy who will assist them in absorbing the information and introduce them to the informal culture of the organization. A relevant and positive orientation program helps start the employment relationship on the right foot. If implemented properly, such a program will assist the new employee in developing a positive first impression about the organization. This can prove to be extremely valuable in retaining that employee. A bad orientation experience, such as poor training or nonexistent organizational policies, can make an organization appear apathetic and unprofessional. This impression is likely to stay with an employee, who will look for other negative aspects within the organization to reinforce the initial belief system.

Performance management
Employees often complain that the traditional performance appraisal can be one of the most demoralizing and/or confusing experiences of their professional lives. This is usually because most managers charged with conducting reviews intensely dislike the process. Therefore, they do not devote the energy or time to make the procedure a mutually valuable experience. In addition, organizations often do not allow their managers the proper amount of time required to make a performance review effective.

Here are some ways to improve an organization's performance management system:

• Provide training to managers on the methods to properly conduct performance review meetings. This should include instruction on conflict resolution.
• Employees should be encouraged to set their own performance objectives at the beginning of the period. This should be developed using their prior performance review and the organization's business objectives as guidelines.
• The objectives that have been set should be monitored by both the manager and employee on a regular basis (at least every three months).
• Employees should conduct self-appraisals and be prepared to comment on their performance during the meeting.
• Compensation increases should be clearly linked to the level of performance indicated during the review.

Professional development and training
Organizations that provide continuous learning tend to retain their employees. Learning organizations will also be more productive since their employees are developing new skills minimizing turnover. A recent survey of 1,000 companies with 50 or more employees conducted by the US Bureau of Labor Statistics found a negative correlation between a company's turn over and its level of training expenditure. Effective organizational training systems will include the following aspects:

• There should be a clear link between an employee training plan and an individual performance review. The need for a development program is the by-product of effective performance management. Many companies throw training at an issue or implement a program simply because it is the flavour of the day.
• Employee training programs need to be followed to ensure the skills learned have been effectively transferred to the job. Most organizations fail to implement this step and many times employees either forget what they have learned or do not utilize the new knowledge because of their comfort with tried but true practices.
• Employee development programs should include a component on career planning. Many organizations fear this term since they assume that is the sure way to counsel employees into a different career path. This is especially true for the accounting profession. However, career-planning programs can actually increase employee loyalty when they see the organization taking a sincere interest in their future. It offers the firm a chance to show the employee what a future career will look like in the current organization and helps identify which employees will most likely stay for the long term.

Corporate policies
Today's employee has different priorities and objectives than did the employee of 25 years ago. Organizations have had some difficulty adjusting to this change, and the accounting profession is no exception. Employers do not command the same loyalty from their current employees. In addition, employees are much more concerned about maintaining an effective balance between their family and professional lives than ever before.

In order to retain key employees, organizations must respond to this new dynamic by implementing work polices that can address these issues. Surprisingly, the high-tech sector has been the leader in this area, despite the demand it places on employees" time. According to a 2000 study by RHI Consultants, 88% of US chief information officers polled said offering programs that meet their employees" needs is more important than it was five years ago. Some policies that should be reviewed by employers include the following:

• The implementation of flextime capabilities where employees are allowed to set their own hours. This is most applicable for professional employees who work with clients. In many cases, employers who have implemented flextime have actually experienced an increase in hours worked by their employees. In the above-mentioned survey, 73% of the respondents felt flexible hours was the most important employee issue.
• Employee wellness initiatives that allow for maintenance of a healthy lifestyle while working -- the provision of a company fitness centre or the payment of fitness club fees. Other methods include providing an employee assistance program or ergonomically sound equipment. Some employers also provide financial and nutritional consulting.
• Resources and time allowances for employees to work from home, which allows them a balance between their professional and personal lives.
• The promotion of employee volunteerism in the community. Many employers are encouraging employees to participate in community activities. This allows the employee to again balance personal and work issues and also promotes the firm as a benevolent corporate citizen.

Communication
One of the main complaints found in exit interviews of departing employees is the lack of communication with management. Many employees do not know where the organization is heading and how it plans to get there. In most cases, management has developed a clear mission and strategic plan but has failed to effectively communicate this information to its employees.

Some methods for encouraging communication between employees and management include:

• A company newsletter or e-mail bulletin that encourages employee participation. It's important they don't view this tool as corporate propaganda.
• Meetings with management to discuss key changes to corporate strategy and its impact on employee activities.
• An employee suggestion program to encourage their input on improving work procedures.
• The implementation of an employee recognition program whereby the company can communicate its own success stories and reward individuals for behaviour congruent to the overall goals of the organization.

This is a brief synopsis of the options available to employers for creating a workplace that will foster employee loyalty and retention. One obvious retention strategy not mentioned is compensation. It goes without saying that an effective and competitive compensation system must be in place in order to create a stable workforce.

However, if other critical areas are addressed properly, organizations will find they will not be required to buy the loy-alty of their employees with outrageous compensation targets. Employers will sim- ply need to be competitive within their market and other nonmonetary programs will keep the firm as an attractive alternative to those professionals who are in demand.

While the programs suggested here require expense due to the time commitments to implement and operate them, these costs pale when compared with escalating salaries associated with buying quality employees or the staggering costs of employee turnover. By making the investment now to become an employer of choice, accounting firms can yield tremendous dividends in the future.