Talent is Key for Success in Client Advisory Services

Client Advisory Services (CAS) is the fastest growing area of consulting in public accounting. Building the right team to start or expand a CAS practice can be challenging, especially given the pressures CPA firms are under in general on staffing. But a blend of strategies, such as automation, expanded hiring and flexible work opportunities, can help practice leaders meet their goals and keep team members happy.

CPA.com and the American Institute of CPAs’ Private Companies Practice Section (AICPA PCPS) recently put out our latest CAS Benchmark Survey, which offers insight into the challenges firms face in this fast-growing service line, as well as best practices from top-performing practices. The topline results – a 20% growth rate and profit margins for top performers that outpace traditional practice areas – underscore the opportunities in CAS, which we define as a practice area in which firms advise clients across a spectrum of financial and accounting related decisions, with the goal to deliver higher value and deepen the trusted advisor relationship. When it comes to talent development, the survey’s insights fall into three main categories:

Increased Focus on Recruiting and Retention. Acquiring and keeping talent has been challenging throughout the profession, and broader business trends such as increased turnover (what some call the Great Resignation) are also causing headwinds. On a positive note, our survey found that CAS staff were paid on par with other professionals in their organization, so a brain drain to what could be perceived as higher-reward practice areas shouldn’t be occurring.

We found a majority of firms use traditional online advertising, social media, internal recruiting and campus recruiting to fill their staffing needs. However, top-performing firms (defined by us as those in the top 25% of all CAS practices in terms of net client fees per professional) were more likely to pay a recruitment bonus and rely on internal recruiting than their peers. We also know many non-traditional firms look beyond just CPAs and are recruiting data analysts and others with critical skill sets essential to this category.

When it comes to retention, more flexible working arrangements can be a means to convince staffers to stay. The good news is a majority of firms in our survey (59%) said they adapted to remote work surprisingly well during the pandemic and another 13% reported being completely remote – that’s a solid baseline to build on. Another advantage for the category: Unlike tax practices, CAS work is subject to less seasonality, so work-life balance can be easier to achieve.

One key element for firms to focus on is workplace culture. In a recent AICPA Town Hall, for example, Elinor Litwack, CPA, a partner at GRF CPAs & Advisors, said the firm’s emphasis on shared values and respect within the workplace was a critical driver in its growth.

“One thing that really resonates with us at GRF is leading the ‘people first’ culture,” Litwack said. “We’re nothing without our people. It’s not just a talking point.”

Sharpening Skills. Top-performing firms were far more likely to use dedicated staff for their CAS practices than other firms (52% versus 32%). This focus allows firms to provide better engagement efficiency and increased quality in service delivery.

Our survey also showed an across-the-board increase in training hours for CAS firms since 2018 (37 hours per full-time equivalent position versus 27 hours), and an even sharper increase among top-performing firms. The latter are more likely to have staff attend vendor training or certification programs, sit in third-party workshops or conferences, and otherwise invest in outside learning. Some 68% of top-performing firms, for example, said staff had attended one of CPA.com’s CAS-related workshops for practice development. Jennifer Wilson, partner and co-founder of Convergence Coaching, says core training should include soft skills, such as leadership and communication, which are essential to advisory practices.

Emphasis on Efficiency. Billable and total hours were up over 2018 for CAS team members in our survey, probably due to the net fee growth practices experienced. Introducing automation and repeatable processes is key to maximizing staff. Top-performing firms are more likely to use workflow tools (87% vs 77% for all CAS firms), dashboards and alerts (78% vs 66%) and are also more likely to employ artificial intelligence and robotic process automation.

Top performing firms were also more likely to limit the general ledger software programs their clients use to three or less, simplifying staff training and easing client onboarding. Rather than doing custom work for everyone, they are more likely than other firms to productize service delivery, creating defined, repeatable client deliverables to increase team efficiency, scalability, and margin – and, more importantly, free up staff to focus more on advisory work.

Building your CAS practice

The CAS Benchmark Survey offers a wealth of information on staffing practices that firm leaders can review to see how they stack up against their peers. CPA.com has a number of resources to expand training, from our CAS workshops and certificates to our signature Digital CPA conference, which has a considerable focus on CAS. Moving forward, we’re committed to providing new tools and learning opportunities for firms to move into the next level of CAS, an array of higher-order advisory services we’re calling “CAS 2.0”. Talent development will of course be key to this transition.

Phil Quimby is CPA.com’s Product Marketing Manager for CAS