The Importance of Staff Continuity for Regulatory Compliance
Messmer, Max, Strategic Finance
Corporate accounting departments have a full plate these days addressing the requirements of the Sarbanes-Oxley Act and related regulations. Publicly and privately held companies alike are paying close attention to corporate governance and the establishment of sound internal controls over financial reporting. In the rush to comply with the new rules, accounting managers must make sure they don't overlook an element critical to the success of these efforts--maintaining continuity of core staff.
An improving economy and strong demand by organizations in all industries for talent to help them focus on regulatory compliance and the integrity of financial data are resulting in more employment opportunity for accounting professionals. The market for skilled accountants, particularly those with internal audit experience, is more competitive now than it has been in recent memory. In this environment, your most talented staff may be tempted by offers from other firms, and finding replacements and training new hires can be costly and time-consuming. As a result, employee retention is once again a top priority for accounting and finance managers.
An Ongoing Compliance Need
Regulatory compliance isn't a onetime event. Sarbanes-Oxley requires ongoing remediation efforts to improve controls, annual testing of these controls, and the development of long-term compliance processes and programs. Perhaps even more far-reaching is the way in which the new requirements have made companies rethink their accounting and financial reporting processes, which often leads to a new layer of control and infrastructure as well as additional staff. This long-term emphasis on the quality of internal controls reinforces the need for staff continuity.
Employees who know the organization's procedures and policies inside-out can more easily identify errors or irregularities in financial reporting. They also will be better equipped to assist any outside experts brought in to help evaluate business risks and internal controls.
Executives at public companies now must attest to the accuracy of their organization's financial reporting, which requires a great deal of confidence in the accounting function. Senior management want assurance that their questions are being answered competently and completely.
How to Ensure Staff Continuity
Retaining your core staff isn't as simple as increasing salaries and refining the benefits package, although your compensation and benefits should be competitive. In the current environment, it's wise to review current salary levels of your staff and make appropriate adjustments if there are those in the group whose salaries are below market.
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