Many small firms struggle with making the most of their staff and creating a sustainable, manageable workflow. The answer is not to try harder to make existing practices work. Instead, firms should rethink traditional approaches to capacity and talent. By doing so, they can create more time for rewarding advisory work while reducing stress in busy season and throughout the year. Here are a few ways to shift your mindset and reap the benefits.
Concentrate on abundance. Small firms have a lot going for them. Just a few examples include the unique expertise and experience that they offer clients; the relationships they have built with their clients and the business community; the agility that is natural to a smaller organization; and the opportunities that come from those strengths. Shifting your focus away from scarcity and short-term fixes and toward your firm’s strengths can help you think about capacity in a different way. When you build on your strengths instead of dwelling on limitations, you’re more likely to uncover new ways to create capacity.
Remember that it’s not just about people or adding more hours. Capacity is also about creating space for the work that matters most and being intentional about how you invest your time, energy, and talent. Don’t concentrate on how many people you have or how many hours they can work. Instead, consider how changes in processes, technology, client mix, and leadership decisions can enhance capacity. Small firms often assume they need more staff when what they actually need are better workflows, clearer boundaries, different technology, or a stronger definition of the right client base and services offered.
Firms that make the most of their resources constantly ask themselves two questions:
What work should only we do? Capacity will always be a challenge if you are trying to be all things to all people.
What work can be automated, delegated, outsourced, or simplified? Work gets done more efficiently when it’s handled by the right person or the right technology.
Focus on outcomes and goals. Technology offers huge opportunities for small firms to move away from analyzing headcount and begin considering how new tools can reduce manual work, improve efficiency, and free up their people for higher-value activities.
Firms can then think about the goals they want to achieve. Do you want to improve turnaround times? Reduce administrative work? Expand advisory services? Improve work-life balance? Start with your goals and then evaluate how technology can help.
Articulate your strengths. Capacity planning is also about retaining great people so you can avoid the disruption that comes with turnover. When talking with current and prospective staff, focus on what sets your firm apart: the ability to form meaningful client relationships, a culture that values and supports its people, work-life and career flexibility, visibility, growth opportunities, and the chance to make an impact on the firm and its clients and community. Make sure your people recognize how your firm delivers those experiences. Talented professionals are seeking a place where they can expand their knowledge. Being an employer of choice means being intentional about culture, flexibility, mentorship, and career development.
Give people time to hone their skills. Unfortunately, burnout is a real challenge at many firms, especially when their people are squeezing in training and development after hours. It’s hard to build a sustainable firm with exhausted people. That’s why it’s important to recognize training as an investment, not an expense, and to allow time for development during the workday.
Training is crucial for the health of the firm. It makes it possible for firms to adapt to new technologies, meet evolving client expectations, and prepare the next generation of leaders. It’s also a powerful retention tool for young professionals seeking greater career satisfaction and growth.
Similarly, challenging assignments and new opportunities help people grow, but workloads need to be realistic and expectations must be clear. Create an environment where people can continue learning without feeling they have to sacrifice their well-being in the process.
Spend time on succession and leadership development. Many of the conversations I have with small firms ultimately come back to the same question: Who's next? Building capacity, developing talent, and leveraging technology are all important, but they should support a larger goal: creating a firm that is positioned to thrive for the next generation.
Positioning the firm for success
Too often firms make decisions based on today's problems rather than tomorrow's vision. They're hiring to solve immediate pain instead of building the team they'll need three to five years from now. Once your firm vision is clear, however, decisions about hiring, development, technology, capacity, and even client acceptance become much easier. You're no longer reacting to constraints. You're intentionally building toward the future.
Capacity planning is becoming just as much about redesigning work as it is about staffing work. Firms should think about capacity and talent in the context of long-term sustainability. Capacity isn't just about getting through the next busy season. It's about creating a firm where clients receive great service, people want to stay, and future leaders want to invest their careers.
Seeking resources to help drive meaningful change in your firm? The PCPS Transforming Your Business Model initiative provides tools for modernizing your firm and solving capacity constraints. They include an article on becoming an employer of choice. Also check out a PCPS tool on Effective Management Through Generational Unity.
Stephanie Otero, CPA, is the Association’s Vice President—Small Firm Advocate. Have questions for Stephanie? Contact her directly at stephanie.otero@aicpa-cima.com. To stay ahead on issues affecting CPA firms, the PCPS Small Firm Success Series offers strategies on staffing, technology, compliance, and practice management. The series is free to AICPA members and provides CPE.
We welcome your suggestions and feedback on how the AICPA can better support small firms.