As a result, these topics will become part of the normal course of business discourse in 2023. More specifically, here are five ESG themes that will be on the horizon this coming year:

1. ESG takes two steps closer in becoming just “business”

At its core, sustainability is about using fewer resources — natural, financial, and human — to generate increased efficiency and effectiveness in business performance, while reducing risk and identifying leveraging opportunities. John Friedman, Managing Director of ESG at Grant Thornton, advocates for the idea of calling sustainability “business” and reframing it in that way, because “no matter what you call it, it is just smart business to understand and manage those things that are levers for attracting more customers and investments [and] engaging your workforce, which all drive profitability.”

To underscore that point, a recent Deloitte study found that more than half of executives said they anticipate benefits from enhanced ESG reporting, including increased employee retention (with 52% of survey respondents citing this as a benefit), improved return on investment (52%), stronger stakeholder trust (51%), elevated brand reputation (49%), and reduction in risk (48%). Indeed, Infosys research found a strong correction between ESG and financial returns and realized financial benefits, including the lower weighted average cost of capital, according to McKinsey & Co.

2. Return to office is so 2022

Hybrid work is here to stay, and employees continue to crave flexibility. In addition, there is emerging evidence that remote working does not automatically mean a lack of engagement based on recent research of metadata gathered from virtual meeting platforms from 10 large global organizations, spoiling one of the major arguments for bringing employees back to the workplace immediately.

3. Employees still maintain an advantage over employers in major markets, albeit a smaller one

The tight labor market is likely to continue in major markets, despite the expectations of a recession in the U.S. and Europe in 2023. A key factor behind this is that labor force participation rates in the U.S. and in Europe continue to shrink over the long term. Further, attracting retirees back into the work force and shrinking net migration rates in the U.S. and the European Union are unlikely to fill in the gaps.

Moreover, one-third of European workers surveyed in mid-2022 said they were expecting to “quit their jobs, even amid the destabilizing conflict in Ukraine, rising inflation, and [as] growing fears of hiring freezes and job losses have created a difficult set of conditions for companies.” Against this backdrop, the European Commission is seeking to attract and retain foreign talent in the region through the Skills and Talents Package, a set of operational and legislative proposals to attract highly skilled foreign individuals, that was established last year.

4. Power skills get the attention of corporate boards

There is a growing need in the nation’s workplaces to rebrand so-called soft skills and instead refer to them as power skills, which can be key to motivating and engaging high-performing teams consistently, especially in the aftermath of the pandemic. In fact, “executives and shareholders are now crystal clear on the value of the human side of leadership, meaning the capability to connect with others, show empathy and compassion, be inclusive and resilient, and excel even in uncertainty.” As a result, boards of directors now want even more involvement in workforce issues.

5. The “S” rising in importance

The momentum of the human side of business has been building since early 2020. In addition, elements of the “S”  are quickly becoming a key success indicator of an ESG strategy. These include workers’ well-being, executive pay increasingly being tied to diversity, equity & inclusion goals, and pay equity and transparency, according to Brian Bueno, ESG Leader at Farient Advisors.

Jenn Ramirez Robson, Vice President of Employment Services at disability inclusion nonprofit Northwest Center, and Gayatri Joshi, former Executive Director of the Law Firm Sustainability Network and Partner at Vorgate Legal ESG Impact, both say that pay transparency and equity are emerging as issues of increasing importance, even as jurisdictions enact additional laws.

In fact, concentrating on the individual well-being aspect of ESG highlights other areas of ESG, such as a critical focus on the environment, Joshi explains. “When we can give respect and equity to all people, the S paradigm will often shift to support E.”

One aspect of how society gains greater awareness of environmental sustainability is through its impact on people, she adds. “When we don’t have equity, we don’t have equal power and choices, and it can translate to whether you can afford to live in a place free of pollution and climate risks or affording healthy food. It’s one of the reasons why the S is so important — we need all those stakeholders to have power and have a say.”

As we enter 2023, business will continue to become increasingly human-centered, and as a result, ESG and workers will keep moving to the forefront, gaining critical attention and importance throughout the coming year.

We spoke to Marsha Huber, Director of Research at the Institute of Management Accountants (IMA), and a pioneer in this emerging area of study since 2014, about the key findings from her neuroaccounting research.

Understanding the brain & how accounting expertise is developed

In the beginning, a novice learner, such as an accounting student, has a lot of technical knowledge and neurons in the brain that contain bits of knowledge. However, these neurons have not yet developed into neural networks that enable learners to connect the dots and weave concepts together. “A novice auditor can follow checklists, but it takes a few years for the neurons in the brain to form networks to fully grasp the knowledge to the point where they can tie concepts together that they could not have done as a novice,” says Huber.

As accountants build their expertise after 10 years in the profession, the neural pathways expand and grow together. This is why an audit partner has the ability to forecast potential problems and determine mitigating plans and actions before they occur.

Huber’s electroencephalogram (EEG) studies of the brain with accounting students and their ability to identify relevant and irrelevant financial accounting terms provides proof. The novices’ brains did not recognize accounting terms that did not fit within a particular financial accounting schema. The more experienced students’ brains, however, did identify the irrelevant terms despite not being asked to do so.

Key takeaways for team managers & accounting employers

By using the insights from neuroaccounting, accounting team managers and accounting industry employers could maximize team performance and engagement among their professional workers. Some of these key concepts include:

Understand learning is nonlinear and grows in spurts — The basics of learning are irregular and vary among learners. Indeed, it takes time to learn, and the brain also learns in context. A novice may not be able to apply learning to different contexts, whereas an expert can. In addition, a learner’s knowledge grows in spurts. Learners often forget what they initially learned, but as time goes by and the brain makes better sense of things, the learner will level up.

Learning can occur during a class for one person, when working in a group for another, and still, working independently for someone else, according to Huber. As knowledge develops in learners, accountants can experience mini a-ha moments when new knowledge breaks through to the conscious mind from the subconscious mind. Insights tend to come when not actively working on the problem.

Increase the creation of “flow” time — Huber recommends that accounting employers create opportunities for employees to experience flow. “Because of neuroscience, we understand that being ‘in the zone’ or ‘flow’ can produce exceptional output,” Huber explains, adding that this practice and bring amazing feelings of energy and focus to work.

Activities that enable flow are having no-meeting days and taking breaks, such as siestas, in the afternoon. Employers should allow employees to block off uninterrupted time to create time for flow.

Investing in time for rest allows for incubation, where neurons can figure out better solutions and develop the neural networks of expertise. In a study that Huber conducted, she found that accounting students napped more than professionals (and other students), hypothesizing that they needed to replenish the energy they expended while learning complex content.

Learning on the job is a recipe for success for accounting professionals, of course, yet it also makes sense to remove the stigma of napping and allow for incubation and the neural networks in the brain to build expertise from the learned experiences during the day.

Understand the brain science of manipulation on accountants’ ethics and decision-making — Finally, understanding the implications of neuroscience indicates that some accountants are more prone to being manipulated than others. “Mirror neurons” in the brain unconsciously will cause some to mirror or imitate the actions of others.

This has implications for the accounting profession. Researchers studied this phenomenon in controllers. In essence, because of the way the brain thinks and functions, friendlier controllers could be manipulated more easily than unfriendly controllers. Controllers that mirrored other people were more likely to make questionable ethical decisions when pressured by others.

Managers of accountants also benefit from neuroaccounting in team assignments — Huber highlights the key takeaway of her work: That managers need to understand better how their teams are wired and play to each team member’s strengths and preferences through four profiles, which are:

1. 1. 1. Clarifiers ask a lot of good questions to get the group moving in the right direction from the start;
      2. Ideators like to brainstorm and explore new ideas;
      3. Developers identify pros and cons and enjoy developing mitigation plans; and
      4. Implementers prefer to focus on execution.

To put this into practice, managers could give new problems to clarifiers to clarify challenges, then, hand the challenge to ideators to brainstorm solutions, who send potential solutions to developers to analyze pros and cons and recommend a way forward to address the problem, and finally, hand it off to the implementers to execute the plan.

As an advocate and researcher in neuroaccounting, Huber says she hopes that an increased understanding of how the brain learns will enable more efficient training practices and help to close the talent gap in finding employees for current entry-level roles in the tax & accounting profession.

“We aren’t using neuroscience to train our people at all,” Huber says. “And if we used neuroscience and understood it, people would learn better, and we would teach better.”

These preferences can be attributed to generational or gender differences, personal style or cultural preferences, individual reluctance to stray from their comfort zone, or feeling for better work/life balance.

If it was not clear before, the conditions and restriction placed upon workplaces during the global pandemic exposed the truth that the mindset of only one way — no options — is neither fair nor ultimately workable. Leaders need the ability to manage people with unique identities and from different generations and holding different performance capabilities. Then, leaders need to customize their interactions to each person’s uniqueness.

In the past, workplace norms were changed most quickly when clients demanded it, such as having women in firms on client teams and in leadership roles, or more recently, for flexible work arrangements. In general, with notable exceptions, clients have tended to be more open to flexibility on how and where professionals work and to diversity and inclusion factors, including generational preferences, than have their outside firms.

Carefully thought out approaches by practice leaders, managers, and the direct supervisors of matter and engagement teams within law and tax & accounting firms can help fuel the feeling that each individual belongs in the organization.

Working through the hybrid challenges

Not surprisingly, hybrid work adds complexity to internal relationships, especially those meant to serve and build connections with clients. Physical limitations — such as not being seen in the room and less opportunity for casual and spontaneous conversations — will decrease some professionals’ opportunities if not proactively dealt with by management. In particular, limits on physical proximity can lead to “familiarity bias” and “proximity bias,” which can lead to an out-of-sight, out-of-mind attitude from firm leadership when assigning work.

Those professionals working virtually also can have fewer opportunities to share their perspectives. That means that intentional effort must be made by managers to ask for their feedback during team and group meetings.

Norms around professional standards can also get murky over time, especially if there is no intentional scheduling of coaching, training, mentoring, and apprenticeship for business development. Without these career advancing practices, employee expectations and any desired upskilling can suffer because employees have fewer informal opportunities to develop relationships internally at the firm and with clients.

Actions for leaders & aspiring leaders

How leaders and managers can resolve the tendency to push employees back to pre-pandemic norms and mindsets that no longer serve personnel and firm goals is a necessary question with complex answers and a variety of related concerns over where and how work gets done. Some differences can raise strong emotions, including: the differing needs and desires among parents and non-parents; and among those workers who enjoy the camaraderie and nurturing relationships of an in-person workplace and those who don’t care about that as much.

Of course, the question of how those employees who are new to the firm, especially newly minted lawyers, can acquire the needed orienting and mentoring is vital, as is how they can make themselves and their skills known to the more seasoned lawyers. For many, it’s not a generational issue as much as it’s being driven by external motivations and the other factors.

To create better outcomes, law firms and tax & accounting firms need to increase their investment in developing managers at all levels. Daily actions of supervisors, such as using team norms for engagement, seeking multiple viewpoints during group settings, and ensuring team members are accountable all should be daily behaviors. Consistently practices, these behaviors can go a long way to establish productive connections and effective micro-cultures of collaboration and respect among their team members.

Tips for leaders and managers

There are several actions and changes in behavior that leaders and managers can undertake now to gauge the work preferences of their employees, including:

• • • ask questions to establish a more accurate view of preferences and needs without assuming that one size fits all;
    • conduct internal research on the expectations and wants of each generational cohort and level of hierarchy through one-on-one conversations or short surveys if possible;
    • encourage cross-generational discussion because the time spent will pay off in many essential ways;
    • assemble a multigenerational group of leaders and high potential professionals to have candid discussions in an environment of psychological safety; and
    • agree on a short list of desired leader attributes.

Importantly, law firms and tax & accounting firms need to realize that their leadership is situational and revisiting the needed leadership attributes and policies every few years (if not more frequently) is a good idea.

While the impacts of the still on-going pandemic are still being felt, adjusting to living with these changes long-term requires a mindset from all generations. Simply demanding that everyone returns to the office full time is not a workable strategy that will allow firms to retain their most desirable talent. Instead, showing an openness to changing needs is most likely to produce the kind of work environment that sustains and retains valued talent and is productive and profitable long-term.

Yet, what can managers in the federal government expect for future workplace attrition, and what best practices can they adopt to better attract younger workers to the public sector?

The retirement “tsunami” is still to come

The federal government weathered the COVID-19 pandemic with less volatility than state or local government agencies in terms of employee attrition. Indeed, record job vacancies in the public sector were largely seen as the result of the outflow of workers in local government and public education, according to Bureau of Labor Statistics data from the 18-month period between February 2020 and August 2022.

And one 2021 assessment from The Partnership for Public Service, found that attrition rates hovered around 6.1% within federal agencies, with slightly more than half of those leaving left due to retirement. This number was a slight increase from 2020 numbers of around 5%, but in line with pre-pandemic attrition rates.

Of course, these stable numbers may mean that the tsunami of anticipated federal retirements has yet to really hit.

More concerning figures relate to federal workforce age and incoming federal employees. A 2021 White House report, Strengthening the Federal Workforce, reveals that the percentage of federal employees over the age of 60 continues to increase year over year, while employees under the age of 30 continually decrease as a percentage of the federal workforce.

Younger employees simply aren’t joining the federal workforce at the needed pace to provide adequate succession planning for upcoming retirements. A 2022 Qualtrics survey on federal recruitment of more than 1,000 recent college graduates showed that more than half of those surveyed would not consider a career within the federal government.

Is workplace flexibility the key?

Understanding why a public sector career is unappealing to younger workers is a necessary first step to address the issue. Perceptions surrounding how and where federal work takes place appear to be the culprit.

In the Qualtrics survey, the top three reasons given by respondents on why they wouldn’t consider a career in government included: perceived under-qualification, lack of work/life balance, and experience gaps in their resumés. While many recommendations have been made about enhancing federal recruitment practices to successfully attract a diverse candidate pool, federal agencies would be well-served to highlight the flexibility of work that is already offered within the public sector.

Flexibility in how and where work occurs can be a key factor for attracting and retaining younger members of the workforce within the public sector. Fortunately for recruiting managers, the federal workforce already offers significant flexibility to current and prospective employees.

The federal workforce has adjusted in the current post-pandemic environment to offer remote working options that are either fully remote or in a hybrid fashion. In fact, the Office of Personnel Management’s 2021 Government Wide Management Report found that 57% of federal employee respondents worked remotely at least once a week, up from 23% just two years earlier.

Employee experience matters

Cultivating a culture where employees have the flexibility that they desire to achieve better work/life balance, and where they can feel connected and valued by their managers may seem like a daunting task to many government agency managers. However, managers can ensure that their culture puts people first by implementing several recommend best practices, such as:

Focus on building and maintaining connection with team members through short, regular check-ins — For remote or hybrid employees, managers can pre-schedule intentional meetings with a clear focus area.

Establish “buddy” or mentor programs to link up new and veteran employees within an organization — Programs that match new employees with peers (rather than supervisors) acknowledges the fact that employees may feel more comfortable asking some questions of a peer rather than their direct supervisor. Likewise, the mentor can provide the new employee with valuable insights about organizational culture. Mentorship programs also can be redesigned for remote or hybrid employees.

Offer diverse learning and professional development opportunities — The rise of hybrid and remote work has contributed to “Zoom fatigue” for many. Offering professional development opportunities that are a mix of webinars, in-person, or self-paced learning modules reinforces that employees are valued, while not contributing to the exhaustion that overuse of virtual video conferencing tools can generate.

Understand how your employees learn — Hand-in-hand with the point above, not all humans learn in the same fashion. Four dominant learning styles include aural, visual, kinesthetic, and reading/writing. Implementing learning style assessments into employee pre-boarding can help managers best understand how to most effectively train and on-board new hires.

Remember that team bonding is still important, remotely or in-person — As full-time in-person work continues to decline, some organizations have empowered employees to spend time together outside of work by volunteering, socializing, or even sharing a meal together. A lunch traditionally spent together in-person can be recreated by supplying remote employees with a gift card for food delivery or to a restaurant of their choosing. Managers also can prioritize scheduling a shared meal for hybrid employees when they are in-office.

Finally, it’s important to understand that the federal workforce has not experienced the rapid outflow of workers to the same extent that state and local government organizations have in the post-pandemic era. Yet, that doesn’t mean critical challenges around talent have been avoided for good.

In preparation for the upcoming retirement of aging members of the federal workforce, managers should consider adjusting their management style to be more people-centric and considerate of increasing remote and hybrid work preferences.

Complicating matters, associates are learning, observing, and practicing their skills in remote, in-person, and hybrid workplaces, so more support than ever is needed. Leaving BD skills to organically develop or providing a few sessions to inspire BD, likely won’t be enough to effectively or fully tap the potential of your firm’s associates to build and sustain thriving practices.

For law firms that want to offer more than aspirational platitudes, here are three strategies firms can undertake to better set up their associates for BD success:

1. Revisit learning & development (L&D) programs

Business development skills are akin to training for a marathon — you don’t run 26 miles without training on shorter distances beforehand. Similarly, law firms should be offering stage-specific learning & development training in business development from day one that should include normalizing BD training as early as possible. Even if associates aren’t expected to generate clients until much later in their careers, gradual introduction of BD concepts, service skills, and communication& interpersonal skills will allow associates to learn, practice, and work on these skills internally before turning their attention outward.

Firms should also build BD elements into non-BD sessions, which helps draw connections to the business of the firm and allows more voices to be heard. During a training session on mergers & acquisitions, for example, the presenter should share specific examples of how these transactions come to the firm, the key relationship aspects, and what factors aside from the legal work are important to clients.

It’s important for firms to use examples and stories in this way to bring the nuances of BD to life, while ensuring diverse perspectives (because BD isn’t a one-size-fits-all approach). Encourage associates to be creative and connect in ways that are authentic to them.

Other L&D methods include:

• • • emphasizing the small, consistent, daily BD skills. One-off grandiose efforts rarely win the race.
    • dispelling the extroversion bias. BD isn’t solely the domain of extroverts — in fact, some would suggest that introverts are often more successful with BD.
    • discussing what BD success looks like in all work environments and recognizing that just because some activities benefit from in-person interaction, doesn’t mean ignoring how BD can be done remotely.

2. Invest in firm systems beyond L&D

L&D programs aren’t the only source of support firms can offer. By using existing mentorship and sponsorship programs, firms can empower mentors and sponsors to strategize with associates on BD skills, provide access to networks, and guidance on approaches. This will help decode the unwritten rules around BD efforts that are most valued by the firm, as well as how these efforts are to be undertaken.

Mentors and sponsors should discuss how to build visibility, credibility, brand, and relationships in both remote and in-person settings. Indeed, sharing, strategizing, and supporting BD skill development is not always achieved through formal programs, unfortunately, and rather is often passed through informal channels. Firms need to be alert to this reality and encourage partners to pay closer attention to who benefits from informal mentorships and sponsorships and who doesn’t.

Too often, affinity bias plays a role in sharing critical development feedback and BD advice. Firm leaders should encourage a broader culture of BD sharing by all partners, For example, the fimr should encourage lawyers to schedule five-minute BD chats after meetings to review the relationship and BD aspects or opportunities with associates.

Mentors and sponsors should also be alert to the BD value of all firm and client opportunities and help advocate for their mentees and protégés. Access is just as important as skill development.

3. Build BD into formal and informal performance and career development conversations

Firms need to be explicit with associates about the expectation to do great work and to develop the foundational BD skills starting now. And this should include nurturing relationships, seizing stretch opportunities, attending networking events, developing client service skills, and more.

Telling junior associates to focus only on doing great work may disproportionately disadvantage marginalized groups. Those with access to networks and mentors will be investing in their relationships and BD skills, and those who didn’t know the unwritten rules and took the firm at its word will look up years later only to discover they’re behind their peers.

Firms need to build BD conversations into all performance and career development conversations while providing transparency and clarity around expectations. Help associates think about their unique strengths and how those might serve BD purposes. Development conversations should focus on actionable advice and hold people accountable for following up.

Firms should remember that remote environments may require more intention and structure — such as regularly scheduled meetings, for example — because there may be less opportunity for serendipitous interactions and informal run-ins with higher-level colleagues.

BD skills for associates should be fostered, developed, and supported from day one. As the legal industry adjusts to remote and hybrid environments, it’s a perfect time for law firms to revisit their BD skills training as well as explore how other firm systems can support associates.

Early, frequent, and intentional BD support has the added benefit of helping associates feel connected to the interests and goals of the firm, which could have associates feeling the firm is more fully invested in them and is seeing them  for their strengths and skills — all of which results in a deeper sense of job satisfaction.

Yet, despite all of the relatively negative workplace trends covered, the results from a Thomson Reuters Institute pulse survey taken in August didn’t uncover the depth of negativity among younger workers employed at tax & accounting firms the media would have you believe. In fact, more than half of all young workers surveyed in the US and Canada reported that they are highly satisfied across a number of workplace factors, including: i) individual factors such as a feeling that I can be myself at work, opportunities for growth and career progression, flexibility, and a feeling that I am treated fairly and with respect; and ii) firmwide factors such as their firm’s collaborative culture, current leadership, and direction and strategy.

Firm Satisfaction

Diving deeper into the data, you can see some differences in the top satisfaction factors between the US and Canada. In the US, for example, the top drivers of high satisfaction were a mixture of individual and firm factors, with individual factors sitting in the first and third spots. A large majority of respondents (79%) said they were very satisfied with the feeling that I can be myself at work; and 76% were very satisfied with the idea that I am treated fairly and with respect — and 78% said they were very satisfied with their firm’s reputation.In Canada, on the other hand, the top drivers of high satisfaction were solely individual factors — I am treated fairly and with respect was cited by 76% of respondents and flexibility was cited by 74%.

More consistency existed in the areas that were less satisfactory across the US and Canada with just over half of respondents saying they were highly satisfied with reward and remuneration and the firm’s strategic direction.

When respondents were asked in an open-ended question about what they like most, colleagues and clients were at the top of the list, with 40% of US respondent saying that and 30% of Canadian respondents. Not surprisingly, the second most popular factor that young accountants liked about their accounting firms was flexibility in the US, and the autonomy and the type of challenging work in Canada.

Drivers of flight risk

Flight risk among young accountants was significantly lower than their peers in the legal profession. The flight risk of accountants is about 25% to 28%, while the average flight risk for law firm associates is about 46%.

Interestingly, while drivers causing employees to move in the US and Canada are somewhat consistent across broader, cross-industry employment trends, it did vary for those young employees at accounting firms in the US and Canada. For example, compensation, lack of career progression, and unhappiness with firm leadership and firm strategy topped the list of reasons to leave your current firm for young employees in accounting firms in the US. And compensation, unhappiness with culture, and a lack of support from managers were the key reasons to leave among young accountants in Canada.

Recommended actions for employers 

Of course the challenge for accounting firms in both the US and Canada, especially those that want to retain the next generation of accounting professionals is finding ways to turn these insights gleaned from the survey into positive action, such as:

Double down on strengths — Being treated fairly and respectfully was a top area of high satisfaction for accountants in both the US and Canada. Fair treatment is a strong indicator of employee retention and is a disincentive to for young workers to leave their current employer. Indeed, it has been widely reported that among younger employees the thought of “being treated fairly and with respect was even more important than their income.”

Further, young accountants see authenticity at work as a strength for tax & accounting firms, and again, this is a strong factor in employee retention. Indeed, more authentic workplaces produce better retention and more productive employees, according to the Society for Human Resource Management.

Young accountants see authenticity at work as a strength for tax & accounting firms, and again, this is a strong factor in employee retention.

Finally, Canadian accountants valued their flexibility and saw it as a strength of their employer. Therefore, continuing to promote flexibility in terms of where, when, and how work gets done will encourage longer tenure by young employees at tax & accounting firms.

Increase the effectiveness of firm leaders and managers — If there were any actions for tax & accounting firms to address based on the fact that 25% of young accountants remain a flight risk, it would be to focus on ways to increase satisfaction with firm strategy, as well as with firm leadership and management.

Communicating and articulating the firm’s strategy from the top of the organization down to first-line managers on a consistent basis so that each individual can see how their role contributes to the overall strategy is vital to this process. In this way, employees — especially younger or new employees — can learn and understand the firm’s strategy while seeing how firm leadership and managers are conveying it. “Managers need to create accountability for individual performance, team collaboration, and customer value,” according to management consulting firm Gallup. “And employees must see how their work contributes to the organization’s larger purpose.”

Likewise, improving manager effectiveness by training managers to hold conversations about their life situation, strengths, and goals is a key mechanism for improving the employee experience and engagement, and avoiding burnout. The “best requirement and habit to develop for successful managers is having one meaningful conversation per week with each team member — 15 to 30 minutes,” according to Gallup.

These investments of time and energy will help tax & accounting firms to boost their retention of young workers. At the current cost of six figures in turn-over costs for most entry-level accounting roles, multiplied by the level of flight risk, managers who spend 15 minutes or more of one-one-one time with each employee seems like a worthy investment, relative to the cost of attrition.

In addition, there is a ripple effect on all of these factors that could spur the downward spiral of all. For example, with no time available to invest in addressing technology and leadership gaps, corporate tax departments are making their lack of technology and leadership experience worse, which is causing a pronounced lack of commitment to succession planning to worsen as well. And while there is currently significant corporate investment in technology to increase the efficiency in workflow and output to better deal with the expanding multi-jurisdictional tax requirements, it is not enough.

Without proactive efforts by corporate tax managers to address the top three drivers of corporate tax employees’ decision to leave employers — feelings of under-appreciation, lack of career progression, and dissatisfaction with corporate culture, according to the report — problems will only get worse in the future. As the red warning light continues to flash on talent, corporate tax managers would be smart to take these actions to stem flight risk and address their tax teams biggest concerns.

Build a rewarding team micro-culture 

Creating a supportive and inclusive micro-culture at work is a critical step no matter if your team is currently working in the office, remotely, or hybrid mix of the two. Unhappiness with company culture is one of the top three reasons tax department employees cite as their motivation to seek another job. Yet, many corporate tax leaders and managers continue to view culture through a pre-pandemic lens that is attached to physical space and referred to as the articulated culture. However, lived culture — the daily occurrence of specific performance outcomes and implied behaviors that drive norms of what is rewarded, permissible, intentionally ignored, and penalized in a work environment — is much more important to many professionals. Moreover, a lived micro-culture exists in the hearts and minds of your team, and you, as the manager, have great influence over this micro-culture.

To build the best microculture for your team, it is critical to make monthly attempts to give the team more clarity on how their individual and collective roles fit into the overall organization’s strategy; and grant them autonomy by being open to work preferences in terms of when, where, and how they want to work within a sensible framework that makes sense for their life.

Find out each team member’s career goals

One of the simplest ways to lower the threat of attrition from valuable team members is to build connection, especially on a personal level with those who report to you. One way to do this is to ask the following questions monthly or at least quarterly:

• • • Do you know how you want to grow in this organization? Do you desire to lead it one day? Or would you prefer to remain a valuable individual contributor? And it is okay not to know yet.
    • If there is one way that you could grow your skill set this year in an ideal world, what would it be?
    • What can I do to better ensure you have a rewarding career here?

Say “thank you” often

Flight risk of those next in line for leadership (usually those between the ages of 41 and 50) is at 30%, while it averages 28% across all of corporate tax professionals, according to the report. Showing daily appreciation for the contributions of team members and for those who are consistently working hard to deliver for the company is the easiest way to reduce flight risk. Saying thank you doesn’t require extra time or resources — it simply requires intention and effort during your normal course of meetings and work.

To promote further engagement, ask one of the following questions consistently on a monthly basis in each of your one-on-one meetings with your team members:

• • • How are you really doing?
    • How is your workload?
    • How is the mix between being in the office and remote going?
    • What can I do today, next month, and next year to ensure you have a rewarding career here?

Ideally, keep track of when you ask each question during the first few months to ensure proper habit formation, better respond to employees’ feedback, and build a positive and appreciative micro-culture. Taking these actions won’t do much to address the fact that almost two-thirds (64%) of survey respondents said the biggest obstacle preventing them from achieving their professional development goals was “lack of time,” but it might reduce the chance that your flight risk indicator will be flashing red.

That in turn, may give you some breathing room to work on the medium-term challenges that your corporate tax team faces, while giving your most valuable team members a micro-culture that better shows their appreciation for the work they do.

Burnout is a work-specific form of chronic stress, and its effects pose an increased rate of fatigue, stress, absenteeism, a loss of motivation, and decreased productivity.

Causes of workplace burnout for government employees

Of the six major causes of workplace burnout cited by the Mayo Clinic, four in particular may be more relevant to local government organizations in the post-pandemic era. These four include:

Lack of control — Local governments have experienced record employee attrition since 2020, with retirements and job openings at all-time highs. As a result, both managers and front-line employees are likely experiencing larger work volumes with fewer resources to manage them. This lack of control over deadlines, workload, or even routine functions such as scheduling can contribute to burnout. This is compounded by the increase in global economic vulnerabilities, government and international regulations, and quickly changing sanctions regimes — all of which add to government employees’ stress levels.

Unclear job expectations — Because of the volume of employee attrition, job expectations have been muddled in the post-pandemic era. Employees may be backfilling the responsibilities of a vacant role while struggling to fulfill their own responsibilities. Thin-stretched managers also are experiencing workload increases and may be unaware of the level of stress placed on their subordinates.

Work-life imbalance — The global COVID-19 pandemic brought with it a double-edged sword of rapid technological adoption (as a necessity) and the ability to work remotely more easily than ever before. The downside of that, of course, is that many employees may find that they are using time outside of business hours to catch up on work from their home or may be struggling to disconnect from their workplace responsibilities and workload even when off the clock.

Lack of social support — Health officials advised isolation in 2020 and 2021 to prevent viral spread, which adversely impacted employee mental well-being. Even as the world moves toward a new “normal” in 2022, there are a number of restrictions that limit social interactions and continue to add to feelings of isolation and loneliness.

5 tips to address burnout

Fortunately, there are ways for government agency managers to address their employees’ potential burnout. These practices include:

1. Increase checking-ins — Effective managers find and prioritize the time to engage with their subordinates. For example, Stay interviews are an increasingly common mechanism for gauging employee satisfaction and motivation and for preventing further attrition. Regular management interaction is key in identifying symptoms of emerging burnout, such as a noted shift in engagement, productivity, or motivation.

Framing interactions around employee support — with questions such as, What can I do to support you in your tasks this week? — can help foster a stronger sense of collaboration and trust within teams and manager relationships.

Communication check-ins might be as simple as asking subordinates to rate their stress or job satisfaction levels on a scale of 1 to 5 each week. Managers who are empowered with more information about their team members can more effectively engage with them.

2. Provide autonomy to employees — Effective managers grant flexibility to team members in how and when they complete their assignments and meet deadlines.

The level of trust that employees use to decide how they will spread work assignments across their day (wherever possible) is critical. Organizations might consider flexible scheduling concepts as well, to allow for employees to feel a greater sense of control over both their work and home responsibilities.

Managers that use regular communication check-ins to have employees share feedback on the results of their personal decision-making and project management open a vital pathway of communication that can relieve feelings of burnout.

3. Prioritize focus time — Managers should encourage their employees to block time for uninterrupted work. With the convenience technology brings also comes perpetual distraction. Email or chat notifications, phone calls, or customer walk-ins are all distractions that may interrupt focus work for the average employee.

As a manager, it would be important to:

• • • • • only schedule meetings when necessary — don’t hold “meetings that could have been an email”;
        • use an agenda and be sure to start and end on time when holding meetings;
        • schedule in a way that allows for cross-employee coverage to provide uninterrupted focus time for team members;
        • encourage employees to block off focus time on their calendar when possible; and
        • urge employees to open their email inboxes with intention several times per day, rather than leaving their email inboxes open all day (with notifications often interrupting their work).

4. Encourage best practices around work-life balance — Good managers need to ensure that employees feel empowered to take their earned time off each year, and should model this by example by following this practice themselves. Employees should be encouraged to not check their email or phone messages while on paid time off, and mangers should model this by example, as well.

Normalize and encourage the use of delayed send features within email platforms to ensure that notifications are not received by team members outside of business hours. This sends a message of respect to colleagues while allowing employees to work at the times that best suit them.

5. Create and support opportunities for meaningful social interactions within teams — Finally, today’s managers need to seek out creative ways to build team camaraderie in the post-pandemic era. Team building within a government agency might be a group volunteer project or an office potluck style function. This could also include connecting with professional organizations, both in person and virtually.

Whatever activity is chosen, gatherings that allow for government employees to express their creativity, their passions outside of work, or to connect with their colleagues on topics outside of their job can build stronger networks of trust and strengthen important social connections that can reduce burnout while increasing employee retention and job satisfaction.

The discussion came during The Independent Director Initiative, a two-day program designed to help individuals from under-represented backgrounds land board directorships in venture-backed private companies.

During the session, panelists warned CEOs not to rely solely on their networks or to strictly target C-suite credentials to staff a board. Company leaders need to reevaluate their criteria and methods for filling board seats and broaden their pool of candidates.

“It’s a loss for the companies that can’t see these candidates, and it’s a loss for the prospective candidates who don’t get to bring their expertise into the boardroom,” said Ann Shepherd, co-founder of Him for Her, an organization aimed at addressing women’s under-representation on corporate boards. It’s also a loss, Shepherd noted, for all those stakeholders who are invested in the company.

Search and reach beyond personal networks

Before starting Him for Her, founder Jocelyn Mangan interviewed more than 90 CEOs and sitting directors — all of them men — and found that all filled their last board appointment with someone from their personal network. “It makes sense if you’re filling a board seat to go to people you know and trust,” Shepherd explained, cautioning that such an approach often excludes potential talent, especially among people of color.

The key to disrupting this approach is to “teach boards and teach the people seeking board positions to fish where the fish are,” said panelist Keith Dorsey, an executive recruiter at global search firm Boyden. “There is rarely malice behind executives’ process for filling board seats — it’s just that people don’t know where to find a pipeline of candidates.”

Members of the panel on board diversity, held during the recent “Independent Director Initiative”

Executive search firms can help bridge the gaps between these networks and the diverse candidates that corporations hope to reach, said Dorsey, warning, however, that search firms also need to consider making changes to how they work with aspiring board members. His research showed that women in particular felt some reticence in dealing with old-line executive search firms, where they sometimes felt unheard.

“The talent is out there,” said Ozzie Gromada Meza, vice president of member and talent services at the Latino Corporate Directors Association (LCDA). Meza highlighted the work the LCDA has done amplifying the talents of those pescados — or fish, in Spanish — in the Latino community. When working with potential board candidates, Meza said it’s important that the individual’s mission and values match those of his organization.

Panelist Josh Green, a former venture capitalist and corporate director, said he believes those corporations that are genuinely committed to serving stakeholders are naturally motivated to pursue board diversity. “The principles of stakeholder capitalism give guidance to making that happen,” Green said, explaining that in stakeholder capitalism, companies orient their activities to satisfying the needs of shareholders, employees, customers, and the community in which they operate.

Too often, however, organizations mistake diversity goals for embracing representation — so-called “board washing,” Green noted. And in those situations, diversity candidates must be prepared to ask the hard questions of the interview panel and even step away, if necessary, he added. “If you truly see a focus and devotion to stakeholder capitalism principles, then I think it becomes of interest.”

Find your “you-sized” hole on a board

Seeking out diversity also means considering candidates with experience and skills outside of the CEO and CFO to other executives in the C-suite, panelists explained. “What we have to do a little bit differently right now is challenge those boards as to why they’re seeking yet another CEO or CFO,” said Dorsey. “If you have nine [board] slots and you currently have eight CEOs or CFOs today, what are you hoping to get from a ninth?”

Companies must look to other executives to find the skills that today’s rapidly changing business world demands, Shepherd said. She urged board hopefuls to evaluate and highlight their competency in a few key areas — such as functional and industry expertise, customer and business model experience, and scale — and then explain their specific value to boards.

Overall, panelists said that board seekers should do their homework and determine which of their favorite companies would be the best fit for their own skill set. “Clean up your LinkedIn, do your homework, and develop your value proposition by looking at the skills needed on several of your favorite boards,” Meza explained.

Beyond that, candidates should “know that you have a story to tell,” he added. Relying too heavily on the resumé gives short shrift to human elements that can make certain candidates more relatable. “How you deliver your message is going to be super-key,” he said. “It’s a brand thing that you’re trying to build, so just be very cognizant of that.”

When it comes to the mechanics of securing a board position and serving as a director, the panelists offered advice on everything from advisory roles to knowing the right time to leave. Fit is important, panelists advised, especially in the areas where boards typically focus — management, service, and governance.

In the end, “it’s all about serendipity… and finding the board with the you-sized hole in it,” Shepherd observed.

While many senior associates value the flexibility that comes with remote work, junior associates want to know what their future career path will look like and are more likely to value being in the office, gaining face time with the partners who will help craft that future.

Associate development was well established prior to 2020 — associates largely knew what was expected of them, partners had been through the process many times before, and the pattern was pretty set. The global pandemic, however, upended that process. First, the shift to fully remote work, then the struggles with the start-stop progress on return-to-office practices and the increasing prevalence of often work-in-progress hybrid working structures dramatically shifted the process. Indeed, in many respects this fall might be the first year in many years where the associate on-boarding process resembles the past.

Still, hybrid working continues to raise challenges, especially around the idea of ensuring that associates are being brought along in a timely manner. Beyond that, firms may also have several classes of associates for whom development has been such an issue that those associates might be behind where their predecessors would have been at the same stage in their careers. It’s no one’s fault, it’s just reality.

Setbacks in associate development not only impair the career potential for associates, but they can also have an appreciable, if sometimes hard to quantify, effect on law firm finances. Research from the Thomson Reuters Institute has found that “getting up to speed” and “correcting an associate’s work” are two of the largest sources of “unbilled time” for lawyers — time that could be billable because it’s done on client matters, but for whatever reason, is never actually billed out to a client. The costs associated with associates getting up to speed can easily exceed $10,000 in unbilled fees per associate, every year; while the time partners spend correcting their associates’ work can well exceed $40,000 per partner annually. Spread across an entire firm, this is a massive potential financial hit.

So how can law firms get their new associates on board while, hopefully, getting existing associates to move further along their own career development paths?

Using the SMART approach

It’s vital to be organized and methodical in approaching the answer to that question. Litigation associates must learn litigation-specific tasks such as legal research and writing, deposition and questioning skills, discovery management, and general oral advocacy skills, along with more general skills required of any lawyer such as how to manage matters, time, and most importantly, clients.

Different levels of experience will require different benchmarks, of course. For newer associates, the focus will be on more foundational tasks and basic litigation skills. Midlevel associates should be equipped to handle increasingly complex tasks with a much lower level of supervision. They should be able to independently handle basic litigation tasks and keep a matter moving in line with specific case strategy objectives. Senior associates should have command of litigation tasks and may even be ready to directly manage other associates’ work on matters, or even handle simple matters on their own.

To arrive at these benchmarks, however, law firms must develop and implement attainable and trackable goals for associate progress. The corporate world loves to talk about SMART goals — Specific, Measurable, Achievable, Relevant, and Time-bound; and it’s not a bad habit for law firms to embrace, either.

Of course, attention will have to be paid to the variety of skills needed among the different practice groups and legal matters. For example, litigation associates will obviously require development of different skill sets than will the transactional associates; but all associates should know what skills they should gain and the metrics they are expected to achieve, beyond just billable hours.

This means that frequent check-ins regarding associates’ progress are essential. Annual performance reviews, while necessary, are not sufficient to ensure that career development goals are being met. Formal reviews should be planned regularly, preferably quarterly. And while it is often discussed, the need to offer frequent feedback to younger lawyers is essential. If an associate learns about a performance problem for the first time during an annual performance review, it’s less of an issue that the associate underperformed and more of an issue that the firm failed to provide the needed training, guidance, and feedback to rectify the associate’s skills gap.

At this specific point in time in today’s legal ecosystem — an era where many of us are in different places than our work life would have normally placed us — it’s vital that professional career development be flexible enough to “meet people where they’re at.” And to do that requires planning, flexibility, and feedback.