Employee Turnover - Only Cost or Possible Opportunity?

I was at lunch today with my husband who works for another CPA firm as their IT Director. As often happens when we lunch, our discussion turns to firm management (yes, we are an exciting couple). One of the things we discussed was the companies we know that appear to be "overpaying" for audit and tax services. In each of those cases, the CFO at the company is alumni from a Big Four firm that "gave" the work directly to their old firm. Sometimes without a bidding process. I wondered aloud how many firms are seeing a return on their former employee's new companies?

There are many reasons that former employees are so loyal to Big Four firms. One is the clubbish atmosphere that there are certain things only a Big Four firm can accomplish. Even large local and regional firms can successfully push this atmosphere. In real life, there are small firms everywhere that specialize in various industries and transactions that can also get the job done, but until you have seen that in person, it is easy to believe that if you want quality service you have to go to a Big Four firm. (I am not going to get into all the reasons that your actual experience may differ from this assumption - under-trained staff, inadequate supervision, etc. Conversely, in some cases, it may absolutely be true.)

Another reason the big firms engender loyalty is the on-going offering of CPE to alumni, the alumni phone books and the general attitude that once you are family, you are always family. Whether or not they do it on purpose, these firms seem to plan that people will leave and work towards having them as walking marketing people even after they go. You can hate public accounting, but you don't hate Deloitte. Ever.

Other large firms that I know of don't do this well. When they turn over their staff, for whatever reason, they choose to be wounded that the individual would choose to leave the firm and they "cut all ties". Firms like that do not seem to pick up as much business from former employees as they should or could. The lesson here seems to be that public accounting, as great as it is, is not for everyone and in your marketing plan, you should determine how you can turn the employees that leave into future business for your firm. Turnover is always a cost, but I believe that there is also opportunity for recovery in future business.