Today is April 11th. Along with being my nieces’ 25th birthday (Happy Birthday Katie), it is the final weekend of the 5th season (Summer, Fall, Winter, Spring, and Tax). With the final weekend comes a tremendous amount of chatter on or among Twitter, blogs, and the water coolers about pending layoffs. Frankly, post busy season terminations have frequently troubled me. They trouble me because too many of the impacted professionals are caught off guard. And I find that level of surprise to be unprofessional. Not unprofessional for the impacted ones, but for the weak leadership that is doing the “impacting”.
Earlier today, I posted a similar response to a post by Rick Telberg on his CPA TRENDLINES CPA Trendlines Twitter account. Rick was mentioning the apprehension about pending layoffs. I responded questioning if Firm Leaders were both ethical in their dealings with people and in reality will the “right” people be let go. I was clearly implying that instead of terminating the workers and the newest (youngest) members of the Profession that maybe, most firms would be better off to terminate some of the partners.
EdithO EdithO Twitter Link responded with a great question: “(Are You) calling for a ‘going employee opinion'”. I think that is a gem of a question. I challenged, via my Twitter posts (side bar: 140 characters is difficult to post challenges and responses) whether the leadership in these firms that are contemplating massive layoffs as to their ethical leadership. In other words, are these leaders treating the human capital ethically? I think some of them may treat their pets better then their team members. At least they feed their pets.
Before I delve deeper into this missive, I need to separate truly seasonal employees from others. Seasonal employees are hired for the season and understand that their jobs will end at the end of the season. There are no expectations generally implied other than perform at or above expectations and you’ll have an opportunity to repeat or possibly apply for a permanent position but heck, this is a tax season position. Also, I am not a Socialist that believes everyone deserves a job. Frankly, I believe that we are all self-employed in the end. That we are individually responsible for our successes and failures, but that is a post for another day.
I am writing about those firms that hire people under the implied “permanence” of the position and opportunity. I am not suggesting that people can’t be terminated but generally terminations shouldn’t be a surprise when it happens. Leaders have one role and that is to facilitate the success and vision of the people they are responsible for and responsible to. Leaders (ethical ones at that) do not hire people under the guise that the employment is essentially a busy season test and then a determination will be made. (I am fine with this if that is part of the deal – but what I have witnessed over 25 years of tax seasons (this is my Silver Anniversary) is that people are hired and they are duped into believing they are achieving what their employers desire and then “Womp” out they go.
Under Kantian ethics such a process would fail. Under Aristotle’s Virtue, this would fail. Under any real ethical framework that can withstand scrutiny (so Ethical Relativist can sit down as that isn’t a framework worth discussing) duping ones fellow colleagues and employees is simply wrong. If people are failing to meet the needs and wants of their employers, there should be a process for communication. Team members may ultimately be a wrong fit, but when that occurs, leaders need the courage to terminate early. If these people lack a future, is it fair to work them until their value to the firm reaches zero at which point the firm can show them the front door without warning? I think not.
If your firm is about to terminate (isn’t that a weird concept – sounds like a firing squad is going to gather) a number of employees, please consider whether you have been fair to them. A firm’s value is predicated on their reputation. Earn the reputation for abuse of busy season team members and once this recession is over (it probably is already except for the negative media reports and lagging indicators that are floated like they mean something of importance other than to fill quiet airwaves and to fill print on dying newspapers), a firm’s ability to recruit and retain talent will be weakened because of short term decisions that properly indicated the true value of human capital in the leadership’s eyes, minds, and action.
Now to my second point. Lets assume that the firm was forthright and honest with the team members and hey, busy season is almost over and frankly don’t need to increase overhead without cause. That is fair. I can live with that. So, who goes? Generally, the partners decide to terminate the team members when in fact the truth is that most firms are “over partnered” by maybe a third and upwards in some firms by half. To be clear, lets assume that you work in a 10 partner firm, I am suggesting that 3-5 of them are excessive and aren’t really partners but function more like “supervising seniors” with an equity position. Firm’s struggle with this all the time. They admit partners that they shouldn’t and then they don’t fix their problem. So they live with toxic partners, and liability risks thereby driving the firm’s value down.
I think that firm’s with over capacity need to determine if they aren’t frankly too top heavy, before they start lopping off at the bottom. The newest and youngest team members may actually drive more future value then the mature guard. So if a firm has to reduce capacity – how about starting not at the bottom but at the top for failing to deliver services so outstanding that customers remained with firm, or for failing to be realistic about what their human capital needs are, or how about allowing poor customer selection, and any other number of valid reasons to suggest that the firm’s condition may be partly (if not fully) the responsibility of its leadership. Again, if the employment agreement was clear and continued/open communications about performance and expectations are maintained, I don’t have an issue. No firm or employer owes a job (just like the US Government doesn’t owe a job to an auto worker, banker, stock broker, or farmer – but I digress because our government and too many of its citizens are confused on this point). But I do believe that employers need to be honest and candid (it is in the AICPA Principles that we are; go ahead and look it up). And honesty and candidness clearly indicates that we don’t use/abuse people merely as a means to an end. That isn’t leadership. That isn’t professionalism. That is toxic behavior.
Next week, it is likely that thousands of accountants will be blindsided. It isn’t their introduction to the unemployment office that bothers me as I have faith the talented ones will survive. The untalented ones should move to another profession. I am simply asking those responsible for “pinking” our colleagues, were you ethical in your treatment or were you not. You’ll know. Those impacted will know. And one last thing, the benefits may be short lived.
People issues are difficult and sticky. Don’t make a bigger mess trying to clean up the one you already created.