Employee Experience and Private Equity: Navigating Change with Anshul Chawla

Anshul Chawla is the Director of Corporate Development at Chawla & Chawla, PC, a position he has held since the start of 2024. With a career that spans over a decade in the field of accounting and finance, Anshul brings a unique perspective to the firm. He began his professional journey at two of the Big Four accounting firms, later pivoting to investment banking, spending several years at a private equity firm, honing his skills in business valuation, scaling, and transitions from family businesses to larger professional organizations.

At Chawla & Chawla, Anshul has been instrumental in driving growth and modernizing operations, focusing heavily on enhancing employee experience, communication, and retention. He is passionate about blending traditional values with innovative practices to bring the firm into the modern age. Anshul’s multi-faceted approach and extensive background in both public accounting and private equity make him a valuable asset to his family’s firm and the accounting industry at large.

Transcript:

Hey folks. Thank you for joining us here today for another episode of CPA Life Podcast, it’s the podcast that shows you that yes, you can have a life and have a career in public accounting. We spend time on each of the episodes talking to firm owners, industry leaders within the profession who are passionate about building more modern-minded, future-focused firms that are really employee-centric firms—firms that are profitable, but not at the expense of the lives of their people.

And today, we’re joined by someone who brings a little bit of a different perspective to the table. Anshul Chawla is the Director of Corporate Development for CPAs in Gaithersburg, Maryland. And after spending the first part of his career not only working for the family CPA firm, but several years at two of the Big Four firms, if I’m not mistaken, correct?

That is correct.

So two of the Big Four firms. Anshul then spent the last eight years as a leader with a mid-sized Northeast-based private equity firm. So not only are we going to talk about the firm, the growth they’ve gone through, some of the things that they’re doing to move forward in the industry today, but we’re going to get his take on PE moving into the space as well. So Anshul, welcome to the show.

Thank you, John. It’s a pleasure to be with you and build the relationship we have over the last six months. You know, I started my career out at PwC and KPMG, really learning how the Big Four does things and the best practices. During that time, I had a lot of thoughts around my own family business, which I worked at a young age and got to understand the different positions that are within the organization and started imagining, you know, where can we take this business?

And with that, I always envisioned, you know, learning how businesses are valued, how are they sold? What are best practices in scaling a business that would be helpful long term. And so with that, as John mentioned, I decided to pivot my career and did a couple of years in investment banking. And then several years with a lower middle market focus, private equity firm, to really learn those skills: How do you make these transitions from a family business to a professional, large organization, which can be very challenging at times.

And, you know, during that time, investments into the CPA space started to increase. And I thought it was a good time to come back and try to bring those skill sets that I learned in private equity back to my family business. And we’ve been working on it the last six months and really trying to implement a lot of change to bring our firm up to the modern day age.

I know that, like you said, we’ve worked together now for a few months, so to be completely transparent, you know, we spend a lot of time on the show talking to firm leaders who we connect with through different avenues. And from time to time, we’re fortunate enough to be able to have one of our clients on the show. And that’s exactly kind of the situation that we’re going to be talking to today. We’ve had the chance to work together now for almost six months. And as you’ve stepped in, working collaboratively with your family who started the firm, what, 30 plus years ago now?

That’s correct.

Your focus has really been on building that next chapter. So talk about what was the impetus that brought you back? You know, I think you and I talked in the past about a conversation that you had with your dad about a year and a half ago about, in essence, what does chapter two look like, kind of thing, right?

Yeah. And we grew up, we started the firm in our basement and, you know, run again, very much like a family business, just day to day blocking and tackling, appreciative of every new piece of business we got, not really always sure about where we’re going. And fortunately we were able to build a great business. We, you know, we have 40 employees, we have an office in India that we’ve established now. But to get to the next level, there needs to be more structure. There needs to be more thought process around how, why, what, where, when. And so we spent a lot of time talking about where do we want to go, who do we want to be, what markets do we want to serve, and why does that fit us?

And so with that, we’ve spent a lot of time in one of the most challenging areas in CPA firms right now, which is hiring and retaining talent. And we look at most CPA firms in the market right now, I think the average turnover is anywhere from 20 to 30 percent. And when we started, given that we hadn’t always thought through the evolution of an employee experience at our firm, we were missing the ball a little bit, and we were having a struggle with the same struggles that many in the industry were having.

So we really wanted to take this early days to really establish, you know, what could we do better to enhance the employee experience? So our big theme for this year is enhancing employee experience. And that starts in a lot of ways. And I think one of the most important parts is communication. You know, the old way of thinking of, you know, the executive team is going to hold back information and live in fear about what an employee will do with what you share, I think is long gone. I think you have to sell the vision. You have to get buy-in from the team, especially once you get to this size of an organization, everyone has to row together. And the more people are informed, the more people are excited about where you’re going, the more they’re engaged, the more they can help you be successful in that journey.

So we’ve really spent a lot of time telling people here, this is what we’re going to do and then doing it. I think, you know, saying is one thing, executing and committing to what you say is equally as important. And so spending the first six months here, creating a plan, communicating with the team, but also ensuring that we’re meeting the goals. And if something changes, explain to the team why it changed. And I think that’s really got a lot of buy-in from the team.

I think one of the other changes we made was finding the right cultural fits for our firm. You know what we realized? Not everyone is the right fit, but there is a huge talent pool that is, and so we want people that really love what they do, that enjoy being in the industry, that are passionate about it, that want to learn, that we can bring on and we can nurture that talent. One of the things that we’ve done great in our history is take people with no accounting experience and make them into accountants. And that says a lot about the training and support we give our employees.

That being said, there’s the next tier, you know, talent, I think, wins in this industry. And so we spent a lot of time bringing in younger talent and setting them up for success. And that is by creating training manuals, creating onboarding manuals, creating videos that show them how to do things. So those first 30 days of their experience is a smooth experience. And that’s really gone a long way for us in helping us retain employees. And one of the KPIs I’m most proud of most recently is typically after every tax season, you end up losing a few people. This year, given some of the changes we made, we haven’t lost one employee, and our employee satisfaction overall is up by 20 or 30 percent, which speaks volumes to some of the little things we’ve done, even in a short period of time.

Yeah, I think that you hit on something that, for so many years, people have run their business—let’s just feed them as little as we have to. Let’s just give people the basic data for what they need. I’ll go out on a limb and I’ll say based on the conversations that I had with people when I came there and met with your team and met with you and met with your dad and your mom, it was really interesting to me that the people that had been there the longest, and we’ve talked about this, the people that have been there the longest, when I talked to them about what kept them there, what attracted them, what kept them, why did they stay, they all had the same answer and it was Arun Chawla, your dad, which told me a lot about the respect that they have for leadership, the desire that they have to want to perform for leadership. And you’ve got a team that is very seasoned. It’s not a large team of one to two year people. I mean, obviously there’s a lot of younger people in the firm because the firm’s grown, but there’s a good core of people that have been there for eight, 10, 15 plus years.

And when we started talking to them about why they felt people had left recently, it was always interesting me that I heard a similar answer. And that was because those people that left, they don’t know Arun Chawla, which again, talked to me, we dug into that with some of your employees and what they talked about was the fact that he was always honest, candid, forthright, straightforward. And it seems like sometimes as business grows, we get running a hundred miles an hour and we forget those things. And you stepping back in, I think has created that bridge to make sure that stays top of mind with leadership.

100 percent and I think it’s all about connecting, right? You know, as time goes on, you do end up having some generational gaps, right? And you have to fill in those gaps. And I think one of the things that we’re really focused on is taking our mid tier people, who have 10, 15, 20 years of experience, and highlighting them and getting them to continue to get more engaged in the management of the business, the management of the employees. And using that as a way to connect also with the younger employees. And also finding time to reorganize our business, our schedules, so we can make time for employees. I think people want to feel heard, they want to feel engaged, they want to have a voice. And a lot of these young, talented people, and even people with 10 or 15 year experience have great ideas, and they want to make sure that they have a platform to speak. And so I think making that time and having an avenue for that communication to happen and reach the executive level and then circling back with them and showing action has been extremely powerful for us. I think that’s really important.

And the other thing that, you know, we’ve all experienced over the last two years is inflation has been tough and it’s put a lot of financial burden on many people in the industry and in our communities in the country as a whole. And one of the things that we like to really do is support our employees. We, you know, one day we’re immigrants that came to this country. We didn’t have a lot. We realized how hard it is to establish yourself in this country. And we want to help our employees establish themselves as we did. And so we do a lot of things around helping people buy cars or homes or creating programs so they can be hopefully as successful as we’ve been in our careers and financially as well. And so I think that’s really paid dividends and has added a lot of longevity to our employee tenure and our employee list.

I think that those are things that people hear about, people hear those things talked about potentially, but, and I was even kind of the same way, you and I had talked about some of those things before I came to Maryland, met with your team, and then I sat and talked with your team and heard story after story firsthand from people that had talked about those types of things that the firm had done for them in a desire to make sure that their family was taken care of, to make sure that they had transportation, to make sure that they could focus on the things in their career that they needed to focus on and not get distracted by a lot of the fluff that’s going on, you know, around us.

You said something a minute ago, and I want to get your take on this: You mentioned about the necessity to have a voice. There’s a generation in the workforce, the baby boomer generation, my generation, that we didn’t have technology at our fingertips. You know, what I’ve said for years is that I grew up in a time where there was a finite number of microphones in the world, and you had to prove, whether it’s via education or experience, you had to prove that you were worthy of having a microphone to speak into. And outside of that, you just, you didn’t say anything. Right, wrong, or indifferent, that’s just how the world ran.

Well, in the world that we live in today, there’s an infinite number of microphones. Everybody has a voice. And so I think that in the world that we live in today, from my perspective, based on what you just said, I think that part of the challenge that we deal with in leadership is we’re hiring people that are 21, 22, 24, 25, 26, 30 years old, and all they’ve known is a world that they have a voice in. Whether that voice is Facebook, LinkedIn, Reddit, GoingConcern, Google, you know, whatever it is, they have a voice. And so to expect those people to come in the four walls and not have a voice is completely foreign to them. What are your thoughts on that?

No, I totally agree. I mean, the world has changed and it’s evolved quickly and people are used to, as you said, having a voice. And if you don’t give them that platform, you get disengagement. And once you get disengagement, it’s only a matter of time until you have turnover. And so I think it’s really important, creating those avenues and channels and those moments for people to speak up. But I think more importantly, John, I think you have to give people a voice because the world is evolving so fast. Technology’s moving so quickly that it’s almost impossible for one or two people in an organization of size to keep their eyes and ears on the ground for everything. And so the more people you’re hearing from, people are reading, they’re following, they’re hearing from their friends, they’re hearing from their colleagues at other places, what worked, what didn’t work, and you can get that feedback. And then you can use that information to make change and implement what you think works and will fit your structure and your company and your culture versus what not.

And I also think people are also receptive to feedback in more ways because they have a voice and they do, people make comments back and forth. So I think we took the time to say, yes, I hear you. You have a point, but here’s some things that I’m considering and why this may or may not work or why I’m prioritizing this over that, I think also helps. It also helps their growth in their career and understand what the next level is thinking about, right? Because until you’ve been at the next level, you’re only seeing it from your vantage point, but by giving them that feedback, they’re also learning and growing and understanding maybe something they were not seeing or missing. And I think that long term pays dividends because, as you know, you want everyone in your organization to move up over time. I want someone reporting to me to take my job, and I want to take the next person’s job, and I want that person to take the next person’s job. That can only happen if they’re getting that feedback, that communication, and are learning. And the quicker you can bring them up to speed, the quicker they can get there. And I just think that makes the organization better overall.

Yep. And that open door communication, it does so much for that. You know, there’s so many things when we talk about talent acquisition, talent retention, there’s so many things that are Intangible. You could argue that experience is tangible, intangible, whatever the case may be. But, you know, I think that we can agree that three or four or five years at Firm ABC may not be the exact same as three or four or five years at Firm XYZ. But there’s also some pretty tangible things. And the way that I’ve kind of approached recruiting with my team for years is, Hey, there’s enough things that we’re never going to see coming that are going to bite us in the butt. So the things that we know can be issues, let’s just avoid them. Let’s just not deal with them.

And I think that so many times, you know, you made a comment a minute ago that there are a lot of different places that people can be successful. The talent pool is small, but the opportunity for what you’re looking for, if you have a really clear idea and picture of what you’re looking for, that pool can be pretty big. One of the things that we did through the discussions and that you brought to life when we started talking about some of the observations you made when you joined the firm full-time back coming in, the people that have been there the longest that are successful, they live within a 10 to 15 mile radius of the firm, because you guys are in-office. The people that have not been successful, they either, they’ve left voluntarily or there were issues with attendance or issues with time or issues with productivity, whatever the case may be, those people live farther away, their commute was longer. How do you address that, how do you deal with that, again, from the standpoint of, hey, we got to find people in a small pool, but we know what we’re looking for. We don’t have to waste our time hiring somebody that lives, you know, on the other side of Bethesda, and hope it works, you know, that history says it’s not going to work. Is that something that you guys have made a conscious decision to kind of focus on? Hey, let’s find people closer to home, so to speak.

Yes, no, it’s definitely been a conscious decision. You know, as you said, John, you and I have talked about this and there’s data to support it, right? And I think what COVID taught us a lot is commuting is not fun, right? And I think there is a lot of other data that you can find that statistically shows the longer the commute, the lower the quality of life. And so we are really focused on that this year, is finding people that live in the area because we want people to have a high quality of life. So that’s important. If you’re happy at home, you’re probably happier at work. If you’re happier at work, you’re more productive at work.

And so, you know, that is a factor that we take in, but there’s other factors. You know, we’re trying to create a culture and a community within our organization where people really feel comfortable. Comfortable in their skin, can be authentic with who they are, their backgrounds and the diversity in their backgrounds is accepted and welcomed and is actually an advantage in a lot of ways. And we really talk about that. We’re fortunate enough that we have such a diverse client base that people’s different backgrounds can be extremely helpful, whether that’s even career-wise, you know, people have worked a lot of different jobs or ethically, that can speak a lot of different language, those are great things, and great value that come to our firm. And we try to highlight that because I think when you do that, people feel welcomed and wanted, and then they want to come to work.

So we’ve definitely tried to encourage that, but we’ve also made some changes. You know, we have recently deployed a work from home on Fridays in the off season. This is our first foray into a hybrid system, and our goal is if this is successful to potentially expand it there. But we also know that there’s an advantage of being together. You know, interestingly, while this program has been out there for a month, I’d say about 50 percent of the people are still coming to the office. Some are doing it because it’s the best way that they get the exposure to have conversations with clients, right? To be on those meetings with senior people where they’re learning about what’s going on, how to present different information, how to answer different questions, how to deal with different personalities that come across in our client base.

There’s those reasons. So there’s other reasons that people have chosen, whether it’s family and they’re just more productive being in the office that goes a long way. And so we want to give people the flexibility and the opportunity to work from home, you know, if it’s right, but we, you know, the office is open and we want a culture that when you’re here, you want to be here. And so it was actually really encouraging and exciting to see people say, hey, you know, I like to come to work because I get to have the water cooler. I get to have the laughs. I get to have the jokes. I get to talk to this person. We go out to lunch together and catch up more. And, that’s the kind of culture we’re trying to cultivate and continue going forward.

Yeah. It’s that, I refer to that as the hanging around time. That hanging around time is truly priceless. I’m a huge advocate for remote or hybrid, but at the end of the day, you can’t argue with the fact that when people are, you know, in the same confines together, there’s some things that happen. When you rub up against each other, not physically, but you push back, you have those conversations. I think that it’s incumbent upon people also to understand in a hybrid situation or remote situation, are they the kind of person that is proactive enough to raise their hand and say, hey, I need help, because so many times when that person needs help, if they’re not the type of person that’s going to raise their hand, pick the phone up, send a Teams meeting request, send an email, a text message that says I need help. In a business where time is money, you’re 15 to 20 hours into a return that you’ve got a 20 hour budget on, and it’s because that person doesn’t want to say I need help because I don’t want to feel like I’m bugging anybody. But the funny thing is you put that same person in the office and they have no problem sticking their head in someone’s cubicle, they pass in the hallway and say, hey, while you’re up, I have a question. Those magic moments don’t happen because I don’t know about you, but I always tell my staff, I’m not going to show up at your door at nine o’clock in the morning every day to say, Hey, how’s your day going?

No, it’s so funny when you say that, John. And I’d say, you know, some of, many of the recent hires you’ve talked to that have a couple of years of experience that, you know, dealt with COVID or started their career in COVID, they actually like the fact that there is some in-office culture here, you know, and there’s actually strong in-office culture here, because that was one of the issues they faced when they started their career is hey, I’m starting off, I’m not sure, but no one’s available to ask. And one of the beautiful things I think we do here, and I have to give credit to a lot of our team and our managers and our senior managers, they will go around and make sure multiple times during the busy season, they’ll ask you, are you stuck on anything? Are you having trouble? Can I walk you through anything? They’ll make sure that they come to you as much as you’re coming to them to keep things flowing, to keep things helpful, to keep the stress down.

Because one of the analogies I make in our office often is we have three tanks. We have a physical tank, we have an emotional tank, we have a mental tank. And when you’re stuck and you’re spinning your wheels and you feel unproductive and the work is piling up, it’s draining your emotional and mental battery. And once one of those goes, you know, you’re not, you can’t produce nearly what you could otherwise. And so if I can save that energy and I can help you use that energy either to take it home to your family that probably needs it as well, or to use it on the client that some days can be difficult or allows you to have the patience to deal with them, because that is a big part of our job, I’ve not only made you more successful, I’ve made the firm more successful.

It’s something that we really focus on and pride ourselves on is giving you that support and coming to you even if you’re shy and it’s not necessarily. 100 percent in your nature to ask for it, we’ll do it ourselves and make it, make that door open and welcoming, so you don’t feel that way.

Yeah, I think that was one of the biggest pieces of feedback that we got when we did, you know, the post season survey of employees. That really was one of the biggest shining spots that I saw looking through the data was that leadership, whether it was their direct report, whether it was a senior, they were working on something on their manager or you, somebody was always there to answer a question, to help them out. They never felt like they were on an island by themselves. And I think that is something that is significant, especially in a firm that’s growing like you guys are, running a hundred miles an hour, that there is a focus on making sure those people get the tools they need to succeed.

Yeah. And I think reactiveness, you know, one of the things that I’m really trying to implement here, which is a little bit of my learnings from my private equity days, but also seeing VC firms or VC backed companies that have scaled quickly, right, is let’s implement, right? Let’s see what’s working. You don’t know what 100 percent is going to work or not until you try it. I think Jeff Bezos has a comment that you have to be able to make decisions with 65 percent information. And so we try. If you bring up an idea and I say, okay, this does seem like a problem, or this does seem like an issue, I don’t know what the exact solution is, but let’s try something.

I think that it creates a lot of encouragement too, that, you know, we’re going to try new things. We’re not going to continue to do something the old way. We’re not going to be afraid of change. I think just in the six months we’ve seen that really play out well for us, where we’ve learned some things that are working, we’ve tried some things that haven’t worked, we’ve reiterated from there. But we’re continuing to improve, and it’s showing impact in our responses from our clients and their satisfaction, but also our employees, and it’s helping the firm overall grow, financially.

Well, I think it shows the people that there is the willingness and the desire to think outside of the box and think outside of the box doesn’t necessarily need to mean something completely out in the left field. Thinking outside of the box, if you’ve been a very traditional firm for three decades, like you guys have, thinking outside of the box, may be something that someone else has been doing for 10 to 15 years, it just hasn’t been done at your firm. And I was telling my team, we can always go back to the way we were doing it before. If this doesn’t work, we can always go back to what’s comfortable. Doesn’t mean we have to like it, but if this doesn’t work, we can go back until we find something that we think is better.

Yeah. And that’s the thing that, you know, I’ve realized: there’s two way decisions, there’s one way decisions. Two way decisions are, Hey, I tried this piece of technology out. Hey, it didn’t work. Okay, we’ll get rid of it and try a new one, right? It’s easy to reverse and go back. And there’s one way decisions of, you know, sometimes hiring someone in a really high executive position or, you know, making an acquisition or selling a business or bringing on an investor, but once those decisions are made, it’s hard to go back. And so you want to be really thoughtful with those one way decisions. On the two way decisions, you know, make sure you collect enough information, but move forward, try.

And I think that iterative process that we’ve implemented, that continuous improvement mindset that we’re employing here has served us well, and we’re continuing to serve it, and we’re bringing other people within the organization along to provide those feedbacks and be a part of that journey because we can’t do it all alone. It takes a village to make this successful. And a lot of people have a lot of wonderful ideas up and down the organization. I’ve gotten some great ideas from my admin team, from my payroll team, from staff to my senior team. And so everyone has thoughts, and especially for the executive team, you know, it’s really important for us. There’s a time when we’re too far removed from the day to day process of something. You know, I don’t really know. So I rely on my team to tell me, Hey, this is working or not. And if I tried something and it’s still not working, let me know and let’s work on a solution. There’s definitely gotta be a better way.

I think my big philosophy is you can’t tell me what we’re doing is the best thing ever, you know, and there’s no way to improve. There’s definitely a way. And let’s try it and we’ll put the time and effort and the resources in to figure that out. And I think once you find the solution, you kind of go on to the next problem, and when you block and tackle like that, over time those building blocks build on each other and you really move forward in a positive manner.

Yeah, I think we get so caught up in focusing on what doesn’t work. We don’t spend enough time looking for solutions. And I think when you’re forced to look for solutions, forced to look for different ways to get things done, it’s amazing how creative the mind can really be. I want to touch on something we’ve talked a little bit about. And I think that, talk about some of the specific success that you guys have had and what’s come out of that.

You know, when I was there in January, we talked about the concept of doing something remote. And I think that where you guys ended up was, hey, we can’t do it now. We don’t have the tools. We don’t have the KPIs. We don’t have the communication systems in place. We don’t have the assets in place in regards to hardware. But we’re going to communicate with the team and we’re going to let them know that this is a goal post-busy season. You had that discussion. What was the reaction with the team? And then what was the reaction when you guys got post busy season and said, okay, here’s what we’re going to do, and here’s the goal while we’re doing it? And talk a little bit about kind of the production that you saw last year from April 16th to, you know, September, October deadlines and what you’ve seen thus far this year with the slight changes you guys have made?

I think it’s a great question, John, and I think it goes back to some of the comments and discussions we had earlier, right, which is communicating, telling people where you’re going. Now obviously it’s a big change from, you know, what we’ve done historically. So you obviously get some resistance or people that are unclear if it’s really going to happen. I think as an executive team, we’re really focused on, we’re going to say what we do and we’re going to do what we say. And so we started building the foundation to be able to do some remote work during the busy season, making sure we had thought process on processes, KPIs, getting some technology in place. We needed to invest in some laptops to allow people to do that, but we did so. And then explaining to people why this is going to not only improve their experience, but what we’re going to do to make this productive, right?

And so the way we’re doing it is there’s productivity goals for the week, Monday through Thursday. And if we hit those goals, then Friday is a work from home. And what we’ve seen from that is that people are incentivized. They like the ability to have their work from home. And we’ve gotten about 30 to 40 percent better production this point compared to last year after the busy season. And I think the other thing that we try to emphasize to our team is guys, you know, I understand busy season is tough, but you know, if we don’t push now, the push will be there, it’ll just be in the second tax season. And we said, we really want to avoid that second tax season as much as possible. And so let’s work judiciously. Let’s work within the hours we’re given, not any extra hours, but let’s use that time effectively to avoid that because it only comes back and bites you later if you don’t.

And I think the team has been really receptive to that overall in understanding, and we really put some numbers on paper. We showed kind of what happened in our productivity, you know, two years prior during the off season, we dropped, you know, we had done call it 40 percent of our work, you know, in the first tax season, only 10 to 15 percent got done in the off season, which is, you know, as long, if not longer as the busy season. And so we’re trying to balance out the peaks and valleys. It’s obviously a difficult task and, you know, we’re really working with our clients as well to give us the information on time, I’d say between employee retention and getting information is probably the two most difficult parts of our job. So we’re working diligently on that to make that better so we can get the productivity we need in the off season so we can avoid that second tax season. And I think doing that load balancing long term is just going to help our employee retention, the employee experience, and help our firm grow overall.

You know, talking about getting information from clients. I’ll raise my hand and admit that up until about three or four years ago, I was that client. And before our CPA firm went to a subscription based model, one of the last conversations I had with the owner of the firm, who I had known for a while, we were talking about. Productivity of people, you know, when you hit those crazy hours versus when people are fresh. And about three or four weeks later, I still hadn’t gotten information to them for my taxes. And he called me and his nice comment was, look, you have a choice. The person that’s going to do your return can do it on Tuesday morning at about 10 o’clock, or they can do it Saturday night at about 11:45. One of those ways is probably going to cost you a whole lot more money in taxes because they’re not going to be as mentally sharp. Your choice.

And ever since he said that, it was a clear indicator of, you know, when people are fresh, they’re going to do their better work. And I think if clients understood that, and maybe they do, they just don’t wrap their heads around it. But there’s a lot to be said for having your people doing things 35, 40, 45 hours into the week versus 65, 70, 75 hours into the week.

I totally agree. And it’s so interesting you bring that up, ’cause it’s one of the biggest things we’re focusing on or having our senior team and our executive team do is that, you know, let’s see what the productivity numbers are, right? One, I think by sharing those KPIs with the team, what you realize is your team is also as driven as you are in many ways. And in some ways they don’t realize, right? If you don’t give them the visibility to see what’s happening, they don’t even always know what’s going. But once they say, oh, productivity is falling off by this much, you know, all right, you know what, let me drive forward. That doesn’t feel good. They have as much pride in their work and wanting to be productive and drive value as you do.

So I think that’s gone a long way. But we also, it’s our job at the executive level and the senior level to remove hurdles and roadblocks. So one of the things we’ve done is create some scripts for our team to really engage with the clients and explain to them, you know, why it’s important to get the information out. And it really relates to a lot of what you just said here. I can deliver you a better product with better service now, in this season, if you send it to me on September 30th, you know, I’m already stretched thin and I’m already working 70, 75 hours. I am bound to potentially miss something. And I can’t do right by you at that moment as much as I can today. So help me help you.

And it’s been effective. Clients have responded to that. And I think giving our team the talking points, the tools, the encouragement, the confidence to speak to clients and respectfully explain why this is important, and not shy away from the conversation has really worked out for us. And we want to do that. We believe that, you know, in our organization, the staff level to the executive level produces, engages with clients, in that way, it’s very flat. You know, we don’t have that mentality that, well, you’re a staff person that you don’t get to talk to clients. So everyone gets to talk to clients and we want to, it’s probably, you know, 30 to 40 percent of our job, right? Almost at any level. And we want people to get that experience early on so they can grow and continue to prosper in their career.

I want to spend the last couple of minutes talking about the move of, private equity into the accounting space. Everybody has their own opinions on it. Is it good? Is it bad? Is it right? Is it wrong? Is there value? Is there not value? I don’t think that there’s a silver bullet answer, but I’d like to get your perspective from two places: One, from a guy that spent seven, eight, nine years of your life in that space, as well as now part of a firm that is growing and that’s something that’s on the table. Is it on the table from the standpoint of definitively what we’re doing, or is it on the table that it’s an option from a growth, it doesn’t matter. It’s on the table. So I’d like to get your thoughts on good, bad, indifferent with respect to PE coming into the space.

Yeah, I mean, you know, one thing I think if you look back in history is that the PE world is a large world. I think there’s some $2 trillion of capital in the space. And just like any industry, you’ll find a lot of different flavors of people, viewpoints, personalities, and you know, one of the things that I learned in my experience in private equity, when I looked at the most successful investments we made, what’s really important is the relationship between the management team and your investor. The stronger the relationship, the better alignment there is, the better a cultural fit there is, the more, the better the returns were. It’s almost one to one for every investment that we made.

And so when I think about it that way, I think private equity can be a great thing for the industry. You know, I think the industry has been a little sleepy, has been slow to evolve. I think accountants in general are conservative. They don’t necessarily like change. I think what happened is you, the world woke up and said, wow, it’s changing. And COVID helped that or accelerated that I should say. And we need these remote policies. We need to find efficiencies. Something like 20 percent of all accounting professionals have left the industry in the last five years or some stat like that, and so the old way is not working. And for us to continue to survive and thrive, we’re going to have to find new ways to do it. And a lot of it does take some type of investment.

And I think for individuals or practice owners, it can be a tough decision, whether it’s an ERP implementation, whether it’s an acquisition, whether it’s opening an offshore office, or even moving work to a third party offshore. How do you do it? What do I need to worry about? What are the concerns? I think bringing a good partner in that can provide guidance, balance, perspective, give you resources and thoughts on how to do that well, and give you a sounding board, I think a lot of these practice owners are also, you know, it’s maybe one or two partners that say, I think, what is it, 70% of all CPA firms are solo practitioners or, two partner practitioners.

Yep.

And there, you don’t necessarily have the guidance or feedback you need to make the smartest decision. So I think bringing in that partner can be really valuable because it can give you the eyes and ears and the resources you need to make smart decisions. But you have to be careful. You know, one of the things that we’re really thoughtful about as we continue to evolve is maintaining our culture. How do we professionalize our business, do things better without losing who we are and what got us here? And therefore we try to maintain certain events, maintain certain policies that, you know, other firms or private equity owned or backed businesses may not want to invest in because the potential ROI on paper is not there.

But we see it not just from a numerical standpoint, we also see it from a qualitative standpoint. There’s some things you just can’t quantify, but you know it, you see it, you feel it, you hear it, it shows. And so we very much believe in that. And so, you know, for me, I think private equity in the space can really help accelerate. The competition is getting hard, the investments are big, finding the right tools and solution is a journey. And having that sounding partner and that capital partner can really accelerate your growth and help you help prevent make some mistakes.

Yeah, it’s one of those things that again, it’s a double edged sword. You got to really understand what it is that you’re getting into who is it that you’re bringing on board and obviously like you said, with the number of dollars out there and the number of firms, it’s creating a brand new relationship. And there’s a lot of things you need to look at, not just the dollar aspect of it. Like you said, it’s got to be somebody that aligns with who you are from a people perspective, a values perspective, a culture perspective, and not get too enamored with the dollar aspect of it, because if it’s not right, it’s one of those one way decisions like you were talking about, correct?

Yeah, totally. And, you know, what I say to everyone is, you know, people get enamored with the number on the paper, right? And while yes, there’s value, most of these times in these types of CPA acquisitions, you know, you’re going to have to maintain some equity in the business. This is your first institutional investor coming in. So you’ll get another bite at the apple. And that, you know, second bite of the apple is, you know, the terminology is typically used in the industry. It can be as lucrative, if not more lucrative than the first one, if you find the right partner and there’s that right alignment. Otherwise, it can be really tough. And so I think being thoughtful about that, and that sometimes maybe taking a little bit less to have the right partner can be the better long-term financial decision than just going after the highest bidder the first time out.

Yep. Some of those decisions can have drastic consequences if there’s not really good alignment with those things. I know that again, we’ve talked about, hey, what does the next chapter look like, and you guys have looked at, or still looking at considering, hey, what does that look like? Is it private equity? Is it a little bit of M&A activity on our side without private equity in the space? If you guys did look at other firms, I mean, do you take those same things into account when you’re potentially looking at an acquisition?

Yeah. I mean, I think one of the most important things and I keep repeating myself and it’s culture, right? And culture is such a fluffy word, but what it really means is, do we think alike to a degree, do we have the same values? Do we treat our clients in a similar manner? Do we want to treat our employees in a similar manner? You know, even the small things in a fully remote firm versus a fully in office firm. There’s a difference in culture there, in thought process, and what makes acquisitions typically most impactful is the alignment it can create over time. But if you’re so far apart that it’s impossible to get to alignment, then it may not always make the most sense.

And so for us, I think, you know, right now we’re really focused on building our infrastructure and our processes and building the right team and the right setup. You know, we’re working and focusing on that over the next year or two. And then, I think we’ll be opportunistic with the opportunity to come. There’s certain subsectors and verticals that we have a presence in where we can find some specialty that could add a lot of value for us that can help differentiate our services to our clients and really help them solve some of the problems they’re facing. So we look at that. We look at continuing to expand the talent pool. I think talent, again, talent wins in this industry. And so we look at it from that angle. And we’d be strategic.

But one of the things that is really important to me and, you know, my parents and the senior people in this organization is maintaining who we are, you know, and I think we want to continue to support our employees, the diversity we have in our employee base, our clients, nurture those things, and we don’t want to lose that as we continue to go on that journey. So for us, that will always be the first question we ask ourselves: Is this going to be accretive or dilutive from a cultural standpoint? And does this align with our values or not? ’Cause those values are what got us here. And we know for us to get to the next level, we’ll have to continue to keep those values intact.

So true. And it’s a hard thing sometimes to hold onto when people are looking at just the numbers aspect of a transaction, the necessity to pull that emotion off the table and look at those things is hypercritical. I mean, you’ve obviously put a lot of work in over the last few months, laying the foundation for a really bright future for Chawla and Chawla. So congrats on the groundwork that you guys have done, the ground that you’ve covered and what I know will absolutely be a continuation of the success that you guys have already seen over the last three decades.

So if someone is interested in learning more about the firm, about the road that you’ve traveled, some of the bumps and bruises and twists and turns and, you know, some of the potholes you’ve hit, maybe someone’s going through down the same path as a firm owner, what is the best way for somebody to get ahold of you, or even somebody that’s in the area that’s thinking, hey, I may be looking for a new opportunity. What’s the best way for somebody to reach out to you to get ahold of you to talk about those things?

So we have our website. You can always obviously reach out there. There’s a job posting there. You can also reach out to me at my email. It’s Anshul@candccpa.com. I love talking to people in the industry. I’m a big advocate of being part of these roundtables and these community organizations, just hearing about what’s going on. And I love to be a mentor and help however I can, you know, I’ve seen some different angles and I’m still learning a tremendous amount about the industry. So I’d love to kind of share thoughts with people who are also active in the space, or even looking from the outside in about what’s working and what’s not, and share ideas.

I don’t think you can ever stop learning in this industry and especially in an industry, things are ever evolving and changing. You know, we’ve talked about it from the PE side, but we also forget kind of the rules and regulation are also constantly changing and creating complexity to our business, which also creates new challenges and hurdles. And, you know, I think we’d love to say Congress has thought about every little thing once they pass the bill, but I think we know otherwise, but it creates opportunities, right? For us to differentiate ourselves in an industry. That can be tough to do so. And so we welcome all in every discussion, whether it’s another practitioner in the space, CPA firm, an employee, you know, someone in college is looking to see if they want to be in this industry, you know, I’d be happy to talk and it’s something I really enjoy doing.

You bring a pretty interesting perspective to the table, so I wouldn’t doubt if there are either firm owners that are looking at a PE play or vice versa, PE firms that are considering stepping into this space, you bring an interesting perspective to the table, not only just in the role of, that you’ve been serving in the last six to eight months, You know, as the operations leader for the firm and trying to build a turnaround system, but just the big picture perspective of where things are today and where it’s going in the life that you lived for eight years in the PE space. I think you can probably help some people that are trying to scratch their heads and figure out what path to take. So we’ll make sure and have your email address in the show notes, as well as a link to the firm’s website. Anshul, thanks a lot for joining us today on CPA Life Podcast.

It was a pleasure, John. Thank you so much for your time and look forward to continuing to work with you.

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Employee Experience and Private Equity: Navigating Change with Anshul Chawla

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