Magazine article The CPA Journal

Reduce Turnover with Realistic Job Previews

Magazine article The CPA Journal

Reduce Turnover with Realistic Job Previews

Article excerpt

Employee turnover is a persistent and expensive problem for public accounting firms. Turnover rates for staff and senior accountants are typically 25% per year, and each separation costs firms $4,000 to $8,000 in training and recruiting costs. The cost of losing outstanding accountants also extends to losing the value of their superior performance. While some accounting firm managers feel low levels of turnover help to keep a flow of new talent into the organization, there is no question that excessive turnover takes a severe toll, especially during peak periods. Some human resource managers use a technique called the "realistic job preview" (RJP) to reduce turnover.

What Are Realistic Job Previews?

RJPs are any method to give recruits a balanced picture of the job they are considering for employment. RJPs are typically brochures, videos, or personal presentations that inform recruits about both positive and negative aspects of the job. Positive aspects might include training and development opportunities, interacting with interesting and influential people, and the opportunity to use their acquired accounting skills. Negative aspects might include long hours during busy season, frequent travel, and repetitive tasks. Based on a complete job description, recruits form an accurate and realistic picture of the job.

The RJP approach differs from the traditional sales approach of emphasizing only positive job aspects. The traditional approach might point out that staff accountants have frequent contact with client personnel--the emphasis on working with new and interesting people. The RJP approach would add that client personnel can become frustrated with continual requests for documentation.

The staff accountant is then faced with finding a way to win their cooperation while maintaining good relations.

Realistic Job Previews--The Bottom Line

The primary benefit of using RJPs in the recruiting process is a decrease in turnover. According to S.L. Premack and J.P. Wanous in a 1985 Journal of Applied Psychology, a firm with an initial turnover rate of 50%, using RJPs should result in a turnover rate of 38%, a decrease of 12%. Firms with 25% turnover should be able to reduce their levels to between 15% and 20%. A reduction in turnover of one staff and one senior accountant at a firm would result in training and recruiting savings of approximately $12,000 to $14,000. It is important to note that these figures are conservative since they include only direct training and recruiting costs such as hiring recruits and sending them to training seminars. They do not include the costs resulting from the lower level of performance of replacement employees--the learning curve.

The cost of obtaining these savings is usually small. Using a brochure to convey a realistic job preview can be inexpensive and could be used by local, regional, or national firms. Devoting a part of the on-campus interview to an RJP is also inexpensive.

Video presentations cost more money, but regional and national firms may have one video produced for all of their offices. The cost would then be defrayed by the decreased turnover at multiple offices. In a regional firm with five offices, the benefit of an RJP program could conservatively be $300,000 if it decreases turnover by one senior and one staff person each year at each office for five years. Benefits could be much larger for a national firm.

How Realistic Job Previews Work

Human resource managers believe RJPs work in several ways. Some recruits will recognize that the job does not meet their needs even before interviewing. RJPs reduce turnover by helping recruits develop more accurate initial job expectations. Experience on the job, consistent with expectations causes people to stay with the firm, while employees with high expectations that are subsequently jolted by the reality of the job often leave. And, RJPs help employees cope with job demands simply by giving them an awareness in advance. …

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