Millennials in the workplace: Disengagement has serious financial ramifications

Written on Mar 29, 2018

By Molly Ryan Kowaleski, OSCPA content & community manager

When an opportunity arose to assist with research taking a deeper look at the accounting profession and one of its greatest pain points, Josh Goldman, OSCPA’s vice president of learning, leapt at the chance.

Hilda Carrillo, an accounting PhD student, along with Joseph F. Castellano, PhD, a professor of accounting at the University of Dayton and Timothy M. Keune, PhD, CPA, an assistant professor of accounting at the University of Dayton, wanted to look deeper at engagement within public accounting firms and the implications of unengaged employees in the industry.

OSCPA members have identified talent management as one of their top business challenges.

“The study aligned well with what we already know about talent management, recruitment and retention issues in the profession,” said Goldman.

The research the team collected 353 survey responses with the help of OSCPA. The respondents, according to CPA Journal, represented a wide range of professionals:

-          18% were staff accountants

-          17% were senior accountants

-          18% were managers

-          47% were partners

Additionally, “respondents were spread among international firms (26%), regional firms (26%), and local firms (48%). Most of the respondents were in audit service (38%), tax service (44%), or a combination the two (12%).”

“The levels of engagement among each of these groups was not surprising,” said Goldman, “The one stat that shocked me was just how small the percentage of millennials who are actually engaged is.”

That number, according to the survey, is a lowly 39% compared to 55% of older respondents.

The authors note “the millennial respondents not only know that they lack excitement and focus for their jobs, but they also appear to believe that their colleagues are more engaged. Furthermore, older employees appear to know that they are motivated and engaged in their own jobs but do not perceive the same level of engagement from their millennial colleagues.”

The survey also found millennial respondents felt less positive emotions at work than other respondents, and the percentages were even lower for feelings of inspiration, enthusiasm, empowerment and control.

Goldman noted there are serious implications for the organization that can’t get their employees excited about their jobs or empower them.

“There’s an altruistic reason you should pay attention to your employees being excited and enjoying their work,” he said, “but the reality is there’s also a financial implication.”

He went on to cite a Center for American Progress study that reviewed the cost of turnover for businesses, which found that companies can incur costs up to 213% of an employee’s salary after losing that employee.

“They found that losing an entry-level CPA in the Midwest at an average salary of $55,000 can translate into $165,000 of turnover cost,” he said. “Do the math at your organization. If there’s 15% turnover per year of staff and you take that salary amount and multiply it by 213%, what’s your annual cost?

“Hilda’s work on engagement is critical to better understanding what drives that workforce engagement so we can prevent some of these costs.”

Unfortunately, the low engagement levels reported in the survey conducted by Carrillo, Castellano and Keune suggest that turnover rates are likely to stay high unless firms can find ways to better engage millennials.

The authors in CPA Journal do provide a few suggestions for building a better work environment. Among them: autonomy, empowerment through personal development, mentoring and creating more brainstorming opportunities.

Most people understand they need a “good” work environment to attract and retain employees, but saying that and doing it are two different things, so what does an organization that’s doing it right look like?

According to Goldman, it’s “the simple stuff.”

“Focus on culture, recognize that people are your number one asset and make intentional decisions about the culture you create, support and incentivize.”

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