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THE CPA MANAGER
FIRMS SHOULD DETERMINE AN EMPLOYEE'S JOB FULFILLMENT as early as possible and rectify complaints as early as appropriate or feasible.
While keeping a trained staff of employees is difficult, so too is funding the high cost of employee turnover. One international public accounting firm estimates that hiring and replacing an existing employee costs 150% of that employee's annual salary. Given such expensive personnel costs, firms need to understand why entry-- level accountants are leaving their jobs and where they are going.
The accounting profession is changing the work environment for entry-level accountants, trying to increase the level of job satisfaction and organizational commitment in the hopes of improving retention rates. To this end, the authors conducted a survey examining the initial employment and migratory patterns of recent accounting graduates that left their first place of employment for another. The data can be compared to a practice's internal research to evaluate retention success.
The Survey
A questionnaire was mailed to more than 1,200 accounting graduates from three universities and 573 responded (47.8%). All of the participants had received their accounting degree within three years of the survey. The average age of the respondents was 23.5.
Exhibit 1 presents a profile of the respondents' first and second jobs. For their first job, 55.8% of the respondents chose public accounting, 30.1% chose private industry, and 8.2% chose governmental and nonprofit accounting. International firms (the Big Five and private industry) accounted for 62% of the respondents' first jobs, and local firms, 23.9%.
Exhibit 1 reveals that 20.1% of respondents changed jobs within the first three years of their employment. Of those, 23.5% chose public accounting and 51.3% chose private accounting. Of the respondents that changed jobs, 32.3% left public accounting firms, with the Big Five experiencing the largest exodus.
When analyzing turnover by year of graduation, significant increases result the more time the respondents had been a part of the workforce. Eight percent of the respondents that had graduated within one year of the survey had already changed jobs. Of the...