Pipeline Pulse: The Three Hiring Mistakes Killing Your Growth
On Episode 97 of CPA Life, John Randolph returns to the Pipeline Pulse, a quarterly deep dive into what’s actually happening inside the hiring market in accounting. Firms keep treating capacity planning as a tax-season scramble rather than a year-round discipline, and it shows, with one East Coast firm losing a quarter million dollars in business before realizing they needed to hire thirteen people in a single year. Candidates aren’t chasing bigger paychecks either, with one example, a senior with fourteen years of experience who turned down a manager promotion because it demanded 2,000 billable hours. Simply put, she valued flexibility over title. Meanwhile, firms keep recruiting for advisory skills nobody’s training for internally, and they treat their talent pipeline like a faucet they can turn on only when a seat opens up. Trust, reputation, and relationships built long before a vacancy exists turn out to matter more than any resume count, and that’s a shift in mindset that separates firms building real staying power from those stuck reacting month to month and quarter to quarter.
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Transcript:
Hey everybody. Welcome to another episode of the CPA Life Podcast, the podcast where we spend time digging into a lot of the different issues and challenges that locally owned, CPA firm owners, managers, partners, and leaders are facing in today’s marketplace surrounding talent, capacity, building cultures where people have the ability to not have to sacrifice their life and their family at the altar of their job. That’s really where we spend a lot of our time at the intersection of people and firm leadership and building people-centric cultures within your organization. And today we’re going to start with a new episode that we’re going to call the Pipeline Pulse. Really, it is an opportunity to dig into what is going on behind the scenes as it pertains to people, as it pertains to building firms that people are attracted to becoming a part of, talking about some of the key drivers that people are talking to us about when we interview them on a consistent day in and day out basis.
So here’s the first thing that I want people to understand as we’re sitting here talking about this: First of all, this isn’t theory. This isn’t what should be happening. This is what we’re actually seeing right now in the hiring and the talent pipeline across what we refer to as locally owned CPA firms, advisory firms and consulting firms. This is coming from conversations with partners, conversations with managers, conversations with candidates who are quietly exploring, hey, what’s next in the marketplace for me? As a firm, we are speaking to anywhere between 25 and 50 people consistently on a weekly basis that are currently working for other local firms, regional firms, national firms, and we’re talking to them about what it is that’s driving them to a point of saying, hey, either one, “Get me out of public accounting, don’t want to be a part of it any longer, or “Hey, I love what I do. I just need to do it somewhere else. And here are the things that are important to me from a career perspective that I’m looking for that I’m not getting right now.”
So we’re going to talk about three or four of the key issues each quarter that we see constantly bubbling up that are facing firm owners, firm leaders, and are not being addressed appropriately, or issues that we’re seeing with candidates in regards to their possibilities of making a move in the marketplace. So here’s the first thing that I want to talk about that we are seeing as a challenge whenever we’re talking to candidates about types of opportunities they’re looking for, and then we sit and talk to clients, potential clients about what they’re doing in regards to hiring and building organizations that people want to be a part of.
First thing is capacity planning is still reactive. That’s something that just blows us away, that blows me away, because one of the biggest challenges that we see right now is that it’s being treated like a busy season problem instead of a year-round leadership discipline. Most firms are constantly asking, “Hey, how do I get through tax season? How do I get to April 15th, April 16th, without blowing up my staff without hours exceeding 60, 70, 80 hours on a weekly basis?” What we don’t see firms consistently asking, is “What kind of work do we want to say yes to next year, and who do we need to support that?” The issue isn’t always about headcount, it’s really predictability.
See, capacity problems aren’t caused by too little staff. They’re caused by. Unclear priorities, and if you really want to dig into things where we see the problem occurring more than anything, whenever we talk to clients that are not getting ahead of the curve from a capacity standpoint, where we see the problem is in pricing—the way that leaders are pricing their business in relation to what type of people and how many people do I need to be able to solve the problems that my customers are currently having, or the types of customers that I want to go out and pursue are currently having. If you are not getting on the front end of this from a pricing standpoint, you are not going to be able to build the backend support that you need to build the kind of firm from a headcount perspective that you want to see.
I’ll give you an example of a firm that’s doing some things right. We’re currently working with a firm that’s on the east coast that came out of the 2025 tax season with a very clear vision of what they wanted to avoid going into 2026, and that was anything that resembled what last year looked like. They thought that they had planned enough capacity into their headcount, but what they didn’t plan on proactively enough is the fact that they were going to lose a couple of people going into tax season. So where they thought they had just enough people to handle the workload that was already there, what they ended up with was before January was even over, they were two people down. And then as they started to get into the thick of tax season, they realized that they were short probably a couple of strong preparers, and definitely a strong review person. They ended up in a situation that they had no capacity to say yes to any potential business that knocked on their door early in the tax season, January, February timeframe. By the time April 15th arrived, the firm owner had recognized that they had walked away from about a quarter million dollars in potential business in the first quarter of 2025 alone.
So we had a conversation coming out of April 15th, and that conversation was very clear: “Hey, just to stay level, if we bring no new business in, just to stay level between now and the end of 2025, we’re going to need to hire probably five to seven people. The reality is to grow though, we’re probably going to need to hire 10 people. That’s just to handle the growth that we’re seeing. That is not taking into account the fact that we are probably going to have some turnover, we’re probably going to miss on some hires, and we’re probably going to lose some people that don’t want to be a part of a firm that’s growing that fast.” So by the time 2025 was over, they had hired 11 people. And then coming into January of this year, they did another assessment of, hey, where are we? Do we feel good about where we are? They revamped some of their pricing. They purged some of their clients that weren’t fitting into the mold of what they were looking to do. They decided they needed to hire two more people in January, so in the last three and a half to four weeks, they’ve hired another two people, one person to do nothing but a high level review. 100% of that person’s work is doing nothing but review. To be able to alleviate some of the pressure of the managers that are managing the day-to-day business in their pods.
Let me make that clear and give you a synopsis of those numbers. They’ve hired a grand total of 13 people since the end of tax season last year. 13 people from 2025 tax season to 2026 tax season. That’s a firm that understands that if we are going to get in front of the capacity issue, if capacity planning is going to be something that is going to be a proactive discipline within leadership in the firm, we are going to have to address it much earlier in the year, we’re going to have to look at where do we want the firm to be, what does headcount look like to get us there, and assuming not only headcount growth, but potential turnover, what is the net add that we’re going to need to do—and just enough is no longer the solution in today’s marketplace because you are always going to have that last minute resignation, especially if you’re a firm that is paying year end bonuses. Stereotypical people are going to wait until they get the year end bonus, they’re going to resign in December or January, and then you’re going to find yourself having to fill key critical positions to get you back to where you needed to be, just to stay level. So again, the number one issue that we’re seeing right now that continues to be a problem for a lot of firms is capacity planning is still a reactive issue.
The other thing that we’re seeing is that compensation is still the headline, but it’s not the hook. So let me tell you what I mean by that. Despite what you as a firm owner believe, money is rarely the primary reason that candidates make a move. Let me tell you what we’re not hearing whenever we talk to 25, 30, 40, 50 candidates on a weekly basis: We do not hear, quote, “I do not like the money I’m not making,” or “I need to make more money than what I’m making right now.” Now what we do hear is, “In relation to the hours that I’m working in relation to the expectation of utilization and realization, I’m not happy with what I make.” But at the end of the day, when they look at what they’re making as a driver for why they’re looking to leave, that is very low on the priority list. Now, don’t get me wrong: that does not mean that people are going to make a move for less money. That does not mean that people are going to take a step back in compensation. What it means is that if you are leaning on your ability to pay market or above market compensation as the driver for people to potentially consider a role with your firm, you’re missing the boat. Because here’s what candidates are asking about: “What does growth potential actually look like at that firm? Who do I become if I stay here in three years versus if I go over there for three years? Will I have clarity? Will I have flexibility? Will I have a life?
I’ll give you a perfect example. We talked to a candidate who is out of a top 25 firm. She’s been there six and a half, almost seven years with the firm. She originally started with a smaller regional firm that was acquired by a national firm that was acquired by another national firm. So she has shown almost eight years of loyalty through two acquisitions and three name changes. Prior to that, she worked for another firm for six years. So she’s got almost 14 total years experience. She’s a senior, not a manager, master’s degree in tax, CPA, passed it on the first sitting. I asked her one very simple question, tell me why you’re not a manager. ’Cause I’ve talked on and off to her for six years. I assumed she’d be a manager by now. Tell me why you’re not a manager. Her answer real simple: “To become a manager at my firm, I have got to have north of 2000 billable hours on a yearly basis and I’m not going to do that.” Her quote exactly, “I do not live to work, I work to live. I’ve got a family. I want to be present for them. I want to be a part of my family’s growth and my kids’ future. And the only way I can do that is I’ve got to put fingerprints on their hearts today.” That’s what’s important to her.
So she interviewed with a firm on her own where the work hours at that firm are going to be somewhere in the neighborhood of 60 hours a week, 55, 60, 65 hours a week during tax season, nothing south of 50 hours at all. She’s going to have to be in the office at a minimum three days a week, sometimes four days a week. And her comment, as we talked about that comparison to where she sits today, is, “I might as well stay here and dance with the devil I know, because at least here I’ve got 6, 7, 8 years of credibility. If I don’t want to go into the office, I’m okay. They don’t make me go into the office. They know I’m going to get my work done. If I have to take off early to go pick up my children at school, they know that I’m going to get my work done. If I can’t come in until later in the day, ’cause I have a doctor’s appointment, they understand that, I’ve got credibility, I can stay here and I can deal with those crazy hours. They know what I will do, what I won’t do. But I don’t want to stay here and do that. I want to find a place that I can build a future that isn’t going to ask me to continually sacrifice my family at the altar of my job.” Compensation is important to her, but it’s not the biggest driver for her. She will make a lateral move for a place that gives her a trajectory of growth that doesn’t ask her to have 2000-plus billable hours on an annualized basis. So again, if you are at a firm where compensation is what you are selling on a consistent daily basis, you’re missing the mark because that is not what candidates are buying in this marketplace. Compensation, if it was the real issue, your pipeline would already be full with top quality candidates.
So again, just to recap, the number one thing that we’re consistently seeing is a challenge that firms are still facing is that capacity planning is still a very reactive process for a lot of firm leaders. It’s something that has to be given a lot more proactive attention consistently, at least on a quarterly basis, if not a monthly basis, when you’re looking at what does our hiring pipeline look like, what does our sales pipeline look like, what does delivery look like, what type of people do I see as a part of the firm and how am I going to make that happen?
The second issue that we’re consistently seeing is the compensation is something that firms are leaning into and selling, which is great, everybody wants to be paid competitively. But that’s not the biggest thing that candidates in today’s marketplace are buying. That is still the issue that we’ve got to get past is firm owners and firm leaders have got to understand that you are going to have to build a firm that is more people-centric, that has a clearer path of growth, has a clearer path for people to come in and build something for the future.
One of the things that we consistently talk to candidates about when it comes to looking at your future is, you know, we’ll have candidates that we’ll engage with, and one of the things that they’ll constantly say is, “Hey, I don’t know if now’s the right time for me to make a move.” We tell them to do one very simple thing. Take a look at the lives of the, depending on what level they’re at, take a look at the lives of the seniors if they’re staff, managers if they’re senior, senior managers if they’re a manager, directors and partners if they’re a senior manager. But take a look at the lives and the quality of life and the hours expectations, the anxiety level, when they’re getting to the office, when they’re leaving the office, all of those things. Take a look at the lives of the people above you on this ladder and ask yourself one very simple question: Do you aspire to that life? Do you envy that life? Do you want that as your life? And if the answer is yes, then stay there. Stay there, because that is where you need to be long term to get what it is that you’re looking for.” But more times than not, what we hear from candidates, a preponderance of the time is not only no, but hell no. “No, I do not want that life.”
Well, that life has nothing to do with compensation. That life has nothing to do with how much money they’re making or not making. It has everything to do with work life balance. Has everything to do with quality of life. What am I able to sow into my family versus sow into my job? Do I have anything left in me to sow into my family after I’ve done sowing into my job? After I’ve put in 10, 20 hours consistently, whenever I’m working 60, 70, 80 hours consistently for half the year, do I have anything left in the tank to be able to give to my family? Those are the things that we’re constantly talking to candidates about, not compensation. So those are the two biggest issues that we face.
The third biggest issue that we face that is a challenge, I believe, on both sides of the equation, both the hiring side and the candidate side, is that too many firms are hiring for yesterday, while they’re talking about tomorrow. And let me tell you what I mean by that. We are constantly hearing from firm owners and firm leaders, “We need people that are more advisory focused. We need people that are more comfortable on the phone, on Zoom calls, on team calls with clients. This is a client facing role. I need somebody that can engage with customers.” That’s all great. But I’ve got a news flash for you: That’s not a talent that someone walks in the door with consistently. That is a talent that is trained, that is a talent that is developed, that is a talent that is built, and the reality is, upskilling internal talent often produces better long-term results than external replacement hiring or external hiring to fill a role that just isn’t being delivered on.
Now, to do that though, it’s going to require patience, it’s going to require coaching, it’s going to require clear expectations of your current staff and what it’s going to take to get them there. But I promise you, if you invest that time as a leader in your current staff, what’s going to end up happening is you’re going to build people that you can then begin to emulate their skills and their talent with the external people that you’re bringing in. Now, some of those hires that you may be looking at today may be the people you can bring in to help you train that, ’cause they have it already, but the reality is you are not dealing with a problem that’s in a vacuum. You’re not dealing with a problem, and you’re the only person in the market that’s dealing with the challenge of, “Hey, I need more people to be more advisory focused. I need my people to be more comfortable interfacing with clients day in and day out.” Every firm is dealing with that, so obviously if every firm is dealing with that, then it’s something that is missing in the people in general, not just in your firm. How do you combat that? Training, coaching, mentoring, development.
Advisory work requires a different operating system from a mindset perspective, and firms often underestimate how much client facing confidence, curiosity, and communication skills matter compared to pure technical execution. That doesn’t mean that we don’t need people that can’t execute, and it doesn’t mean that we don’t need people that can’t communicate. What it means is we’ve got to find that happy medium where those people can straddle that fence and can straddle it well, confidently and comprehensively, to be able to deliver for you and your customers the way that you need to have them deliver. But the growing gap between what partners envision advisory to be, and what they’ve structurally enabled their teams to deliver, are consistently two very different things, and the only way to fix that is training, development and building better systems to mentor your people to get there.
The last thing that I want to touch on today is a very simple thought process and mindset that the pipeline isn’t broken, it’s just being used incorrectly. And here’s what I mean by that: Most firms are treating recruiting as a transaction instead of a relationship. It’s going to limit your access to high quality passive talent, if you think it is something that you can turn on and turn off. If you are working with a business development pro, if you’re working with someone that’s teaching and training you or your team on business development or sales or marketing, I’m sure that it is something that you are putting a lot of time, energy, effort, and attention into. Even if you are not actively going out trying to build business today, the reality is that you’ve got some type of a mechanism within your firm that is consistently dripping and potentially creating opportunities for new business for you. It may not be at a consistent heavy flow, it may be at a slower pace, but the reality is you’ve got a system in place that is driving new business to your firm at the pace that you want and/or need it.
My question is, are you doing the same thing with talent? Because the reality is in today’s marketplace, you cannot just flip that switch and have people come into your pipeline. You have got to treat this as a relationship-focused business, and be able to build relationships and have conversations long before that talent is needed. You see, pipeline health is more accurately measured by trust, it’s measured by engagement, and it’s measured by reputation, than by the numbers of active resumes that you have coming in. You want people, ideally, that want to have conversations with you regardless of whether or not you have an open position, just because they hear about you in the marketplace, they see things that you’re doing in the marketplace. You have an advocate that is speaking to people in the marketplace consistently about who you are, what you do, and how you do it as it pertains to your people. Now that advocate is either somebody internally or that advocate is somebody externally, but there is somebody that is standing on the mountaintop and making sure in the midst of all of this noise that your firm and your brand is being sold, spoken about and talked about consistently. See firms that wait until there’s an urgent opening are competing in the most crowded and expensive part of the talent market. You’re competing for people that everybody is talking to, and that is the last place that you want to be. Because leaders who view recruiting as a leadership responsibility, not an HR function, they create stronger and more resilient pipelines that are present and existing long before those needs come.
So those are the biggest things that we’re seeing in today’s marketplace. We want to continue to give you an idea of what it is that you’re going to be seeing in the market, stay ahead of the needs that are there in what we’re now calling on a quarterly basis, our Pipeline Pulse. Let us know your thoughts. Let us know if you’re seeing the same thing. Subscribe to the podcast on the podcast platform of your choice, and let us know what it’s like in your marketplace and what you’re seeing as you continually live out this thing we call CPA Life.
We hope you enjoyed today’s episode. Be sure to subscribe on your favorite podcasting app, leave a five star rating and visit our website for links and show notes at CPALifePodcast.com. We’ll see you next time on CPA Life!