In Pursuit of Profit
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Cash-strapped startups need to be judicious with how they spend their money on everything from operating expenses to hiring costs. When there is just not enough room in the budget to pay an accountant market value for their experience, a startup may need to get creative with their overall compensation package, rethink their “ideal candidate” profile, and potentially even consider outsourcing as an option (at least temporarily).
Find out more in our guide to hiring a startup accountant:
Supplement with Benefits
In some cases, supplementing the salary with desirable benefits can help offset labor costs while attracting top talent. Benefits and perks can sometimes persuade candidates to give the role a chance at a fraction of the cost to the company of increasing the actual dollar value of the offer. Our partners at CFO Selections explain that benefits are one way to win the talent war in accounting and finance these days:
Creative benefit offerings like paying off student loan debt, lowering insurance copays and deductibles, increasing 401k matching for vested employees, including an HSA program, offering supplemental life insurance, or providing access to independent financial planning services are giving some employers the edge over their competition in this stiff labor market.
If added benefits do not help move the needle, a startup should start analyzing how they can rethink current and future compensation arrangements. When a startup does not have the funds needed to pay an accountant as much as their more established competitors upfront but expects that they will have the money to do so in the future, they can create a compensation structure that pays more in subsequent years. For instance, a startup can offer time or performance incentives on top of a base salary (essentially paying the accountant more later on when the company has more money). For instance, some startups will guarantee incremental salary increases after set periods with the company (one year, two years, etc.) or bonuses depending on the company’s revenue figures. This defers the full cost of an accountant, hedging on the success of the company over time. For well-funded startups, offering an equity share with reasonable conditions attached can also add to a senior-level accounting professional’s compensation.
Consider Late-Career Candidates
There is a persistent stereotype that startups are comprised of only hip, free-spirited, tech-savvy young visionaries. As such, there tends to be a stronger age bias in their hiring practices than might be found at later growth stage companies. However, overlooking candidates that are further along in their career can be a big mistake because it eliminates the applicants that have the most expertise to offer. Our own Quinn Finnigan says this of hiring late-career professionals:
There is often a stigma attached to late-career candidates that is uneducated at best, and at worst tantamount to ageism. But late-career candidates should be considered equally with all other candidates. …Remember, a candidate in the last third of their career is likely a subject matter expert. Review the candidate’s resume for a group of responsibilities and skills that show a pattern of specializing in an area that is meaningful to you. In addition, late-career candidates often have much more lived experience and bring much needed perspective, patience, and gained wisdom to many situations, whether in a manager role or as an individual contributor.
Quinn adds that contrary to common myths, they are actually more adaptable than their younger peers because they have had to grow and deal with change over a longer time period. He goes on to say that late-stage career candidates can be great hires because they are more motivated by the value they can add to an organization than their earning potential.
Evaluate Outsourced Accounting Options
If cost is the main barrier to hiring an experienced accountant, why not forgo it altogether?
Instead of hiring an in-house full-time accountant, consider outsourcing the role. While overseas accountants in low-cost labor markets are not a reputable way to go, utilizing a domestic accounting company that employs consulting professionals with knowledge of US GAAP (Generally Accepted Accounting Principles) is a shrewd business decision.
Outsourced accounting solutions pair companies with what is referred to as a “fractional accountant” to do less-than full-time work. This means an accountant will do your books and provide reporting (among any other financial tasks you need them to do) on an ongoing basis and you will only pay for the time it takes them to do so. You can use an accounting service provider to do as much or as little work as you need for as long as you need them (which can come in handy if you are still committed to the idea of finding that “unicorn accountant” to hire someday!).
In addition to the flexibility of this kind of a la carte accounting solution offers, outsourcing the role has the significant advantage of being less expensive over the short and long-term because you are only paying for what you need without added costs like payroll taxes, benefits, raises, etc. As your company grows and your accounting needs become more sophisticated, you can scale up the arrangement to offer more help. This kind of business relationship also turns the high fixed cost of hiring a full-time accountant into a lower variable expense, which is extremely helpful from a cash management standpoint.
If you are looking for an accounting services provider, we serve the Oregon, Washington, and Colorado markets with top-notch accounting staff. Whether you are looking for on-site, virtual, or a combination of the two, we have the consulting accountants to meet your individual needs.