Hardcastle Burton, United Kingdom: Exit policy
Hardcastle Burton is a small accountancy firm operating from the city of Royston in Hertfordshire county in the southeast of England. The company was previously part of a larger accountancy group in the region, but for several years has been operating as an independent firm, although maintaining some professional links with its former partner offices.
Currently, the firm employs seven employees. The company is led by a senior accountant and company director, who has two deputies, one of whom is a certified accountant. All of these employees are men. It also employs the services of another self-employed accountant. Moreover, the company employs three support staff, including two women and one man. The age profile of the staff group indicates that the workforce is ageing somewhat, with three employees aged over 50 years, including the company director.
With the exception of the self-employed team member, staff work on a full-time and permanent basis. Staff turnover is low, and most of the current employees have worked with the company for many years.
Over the years, the company has established a strong local reputation and has increased the volume of its business, despite mounting pressures on profitability and more consolidation in the industry. It is possible that some potential clients may consider a firm with one senior accountant as being too small to represent their needs, and that clients with audit fees of £5,000–£10,000 (€7,400–€14,800) may prefer to look for a larger firm. It is harder for the company to cover its costs with the types of client fees it attracts. Moreover, new regulations are apparently making it more difficult for smaller accountancy firms to operate.
However, another possible view is that this type of company – a small firm, operating in a niche market and offering a personalised service – gives the company a competitive advantage, which needs to be sustained for the future. Hardcastle Burton and similar companies are more able to provide an understanding and open response to clients’ needs than a larger firm, by offering a more personalised service.
Moreover, the staff group feels a strong emotional attachment to the company as it is a small firm and they have worked there for a number of years. The employees at Hardcastle Burton are not members of a union.
The original initiative
The inevitable retirement of the current company director and his replacement has been an issue of concern for a number of years. Attempts to find a replacement director have been unsuccessful; as it will take some time for a new company director to settle into the role, the issue has become critical, raising questions about the future of the company in its present form. This has led to some uncertainty among the staff and to concerns about their own futures.
After learning of the existence of a research project being undertaken by the University of Cambridge and funded by the European Social Fund (ESF), the opportunity arose to invite the research team to work with the company. The aim of this initiative was to explore issues of concern among the staff members in relation to their own careers and retirement options, and to present recommendations to the company and its staff. Interviews were conducted among the majority of the Hardcastle Burton team members in February 2006 and covered issues such as careers, retirement, succession planning and the future of the company. The research group identified a range of issues facing the company and gathered a considerable amount of information on staff members’ perceptions of the company and of their own careers. The research findings were condensed into a report and presented for discussion at a structured feedback meeting with the entire staff group, which was facilitated by a member of the University of Cambridge team.
While the staff viewed the company favourably, some significant issues arose in their feedback. The high proportion of long-term staff was cited as a factor that could cause the company to become ‘stuck in its ways’, making the organisational structure difficult to change. Younger staff members had generally less clear career goals than their older colleagues, although older employees expressed a sense of uncertainty about their future. Among those approaching the retirement age, a phased transition to retirement was cited as the preferred option rather than taking early retirement. Financial preparedness for retirement was found to be varied among the staff. The issue of the current director’s succession was raised as a critical concern. Going forward, the staff members felt that the company needed to consider how it would retain its capabilities by planning ahead for different aspects of the business and the succession.
Good practice today
Feedback from this research project has been positive for the company. The opportunity to contribute to mapping the future of the company was welcomed by the staff group. In particular, the feedback meeting was viewed as a useful opportunity for a facilitated and non-threatening discussion on issues of concern and for planning a way forward for the company and its staff. Moreover, staff have also had the opportunity to reflect on their own career plans and aspirations. Since the original intervention by the Cambridge research team, one of the junior accountants in the organisation has agreed to take on a significantly greater management role in the company, with a view to taking over as company director at some point in the medium term, allowing the current director to gradually wind down. Other team members have also considered their work and life options, and one worker has decided to consider a major career change.