Necessity Is the Mother of Invention

Business valuation is unique in that jobs above a certain level in the functional hierarchy of a practice can only be filled by hiring someone from the industry itself.  The common approach to this conundrum has been to recruit like the dickens and pay ever higher salaries.

Some practice leaders we talk to are starting to focus more on bringing in talent from outside the industry using what might be loosely described as a “grow your own” philosophy.  At the same time, they are restructuring their practices to take advantage of this shift.

This change appears to reflect practical realities of the marketplace:

Although higher level, experienced talent can usually be immediately productive, they are harder and harder to find and hire; and more expensive when you do.  Revenue projections based on having this level of staff on board turn into little more than “if only” exercises.

Lower level talent may not have the requisite experience, but they can be hired more easily and at lower cost.  Business valuation is highly attractive to these potential candidates.

Training costs are likely higher for the less-experienced talent, both in terms of actual cash outlay and the cost from non-chargeable time spent in training them.  This cost can be offset, though, by the eagerness with which these employees approach learning and the accelerated curve that results.

Employees who reach a level of competence in exercising the judgment that is critical to success in the field usually do so through the incremental accumulation of experience.  They tend to forget what it was like not to know what they know, and often have difficulty imparting that knowledge to less experienced employees.

Requiring these employees to participate in the training and educating of less experienced staff, while pushing work as far as possible down the ‘food chain’, can be frustrating to them.  In the end, however, the practice benefits from a deliberate distribution of knowledge from the highest levels to the lowest, while contributing to a more constant flow of more loyal employees up through the ranks.

This approach, while not a ‘magic bullet’ for dealing with a chronic staffing shortage, will likely grow in popularity and relieve pressure and strengthen practices.