Conference Highlights on Employment Agreements

Source: Accounting Office Management & Administration Report

Here are some ideas generated at the Association for Accounting Administration’s annual conference:

Non-compete Agreements:

• Don’t assume state laws are all the same.
• Charge a fee (percentage of revenue) for employees if they take clients.
• Require departing partners to pay for staff that leaves with them.
• To ensure proper legal consideration, make sure non-compete agreements are signed prior to the start of employment. To create an enforceable agreement after employment, make the agreement coincidental with a raise, promotion, etc. Some firms have all partners and staff re-execute their agreements every year.

Performance Evaluations:

• Most firms conduct them annually. Some do them bi-annually or quarterly, especially for younger staff.
• Some firms conduct all evaluations at the same time, and some conduct them on anniversary dates.
• Many firms keep the review process separate from, but close to, the time for compensation adjustments.
• HR personnel often participate in evaluation meetings.
• Appraising performance is difficult. Here are some thoughts/trends:
  • Use checklists found in publications.
  • Evaluate technical skills only.
  • More firms are evaluating “soft skills,” such as interpersonal skills.
  • Systems employing 360 degree evaluations can be effective only if the firm demonstrates that it is using uses the information to effect change.
• Engagement reviews are effective, though firms don’t usually find time to do them.
• Those being evaluated shouldn’t be surprised by what they hear. This can be controlled by practicing continuous informal communication on performance.

Retention:

Much has been written about first-year recruiting, but recruiting experienced staff is even more challenging. As a result, efforts are being shifted to retention. Retention programs include:

• Training.
• Career development.
• Mentoring.
• Flex-time.
• Maintaining contact with ex employees. If they return they’re good examples for existing staff.
• Conducting staff surveys, which can identify reasons for dissatisfaction and lead to corrective measures.
• Using health care benefits as a recruiting/retention mechanism.

Health Care:

Control health care costs by:

• Renegotiating with insurers.
• Increasing co-payments.
• Providing increased compensation for employees who choose to be covered outside the firm, such as under a spouse’s plan.

To read other articles on retention from our archives, click on this link: Practice Management Index and scroll down to Recruiting and Retention.

From Accounting Office Management & Administration Report, March 2007, p. 1. For subscription information contact Institute of Management & Administration, Inc., 3 Park Avenue, 30th Floor, New York, NY 10016-5902. One-year subscription $399. 212-244-0360, [email protected].