For or Against Mandatory Retirement? There’s No Easy Answer
We’ve talked a lot about the challenges facing CPA firms in today’s market, how to make staff happy, and how to snag the best talent coming into the workforce. One of the biggest issues firms are wrestling with is succession, and retirement in particular.
Recently, Marc Rosenberg – founder of The Rosenberg Survey – wrote an in-depth piece about the topic on his blog.
The debate, which usually falls along generational lines, is fraught and complicated. Is there a way to get everyone’s needs met?
Many older partners are still contributing members of the firm and don’t understand why they should stop working at what they see as an arbitrary age or date. Americans are living longer now than ever and managing partners who have dedicated their lives to building their businesses are reluctant to step aside when they are still successfully producing. They have established decades-long relationships with clients and are now helping them prepare for their own retirement. These clients have a great deal of trust in them, and have in turn referred many others. There’s no reason why they shouldn’t continue to provide the consistency and quality of service that has made their firm successful. They believe mandatory retirement amounts to nothing more than ageism.
On the other hand, talented CPAs can get discouraged about their career paths when they see there is no place for them as a managing partner. They watch as partners continue to hang on, when perhaps they’re not as sharp as they were, and aren’t producing quite as well as they were at their peak. Or maybe they’re not producing as much because they’ve branched out into leisure activities but still insist on working. These younger CPAs need to worry about their future and seek the security of knowing there is a place for them in firm leadership if they dedicate their loyalty and career to the firm. They get frustrated when they feel like they’ve hit a wall, and see that they won’t be progressing any further until a partner retires. If this goes on long enough, they feel their only option is to leave the firm. In doing so, they could be taking clients and even other staff with them.
Sometimes if the retirement isn’t well-planned, there is no formal plan in place to groom the next generation of firm leadership. There is no mentoring program or discussion about succession. Clients are not properly transitioned from the retiring partner to another CPA in the firm. No matter where you stand on this topic, it’s not going away and it needs to be discussed.
What are your thoughts about mandatory retirement and succession in CPA firms? Share our post and keep the conversation going with your colleagues!