On my podcast, we talk a lot about the talent crisis in the accounting profession. With crazy high turnover, especially among experienced staff, firms struggle to attract and retain enough employees to handle all the work.
This pressing issue is why I was so eager to speak with Wayne Berson, CEO of BDO USA, about their bold, outside-the-box move to become an employee-owned firm.
Earlier this year, BDO became the first major U.S. accounting firm to roll out an employee stock ownership plan (ESOP). This means BDO employees now become owners and share in the profits and growth of the firm.
Wayne explained that the ESOP helps BDO USA take on its biggest challenge - retaining talent and stemming the average 35% turnover rate in public accounting. Here are some of the key benefits:
Employees are granted an ownership stake on day one. This gives them something to build throughout their career, whether or not they are on the partner track.
Employees receive an allocation to their ESOP account each year equal to 10% of their annual salary. This vests over six years to keep employees committed.
The ESOP boosts morale and loyalty. Employees start thinking like owners, which is great for a firm that wants to grow, not just bill a lot of hours.
It makes BDO more competitive than more traditional public accounting firms and even helps them compete with the stock options at tech firms and startups.
Wayne shared valuable insights into how the ESOP works, why BDO decided to pursue it now, and his advice for firms considering this kind of employee-owned model.
Some key takeaways:
The ESOP allows BDO USA to maintain control versus bringing in private equity investors.
It directly addresses their pressing talent retention issues.
Leaders should think outside the box like an ESOP to stay competitive in attracting talent.
Listen to the entire conversation to hear precisely why and how BDO is charting a new and exciting course for the accounting profession. At a time when talent is scarce, this kind of fresh thinking around employee engagement and ownership is critical.
