Hiring - 1st hire

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#1
fish  
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for those of you who went from just you to having an employee

what was the first hire? an admin person? professional staff?
 

#2
AlexCPA  
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fish wrote:what was the first hire? an admin person? professional staff?


I'm struggling through this exact dilemma at this very moment. I've been going back and forth with:

"hiring an admin will allow me to offload the non-technical work so that I can get more work done"

and:

"hiring a professional staff will allow me to offload the technical work but I'll still be doing all of the admin work."

Ultimately, my inclination is that hiring an administrative person will be more "profitable" if you will because I will pay someone, let's say, $25.00 an hour to free up my time which is billable at $325.00 per hour (a "profit" of $300.00 per hour). On the other hand, hiring a professional staff will cost, let's say, $100.00 per hour and may be billed at $325.00 (a "profit" of $225.00 per hour). This is my thought process -- I welcome feedback and discussion as I am still not 100% sure about my own analysis. :D
Even more of my antics may be found on YouTube:
https://www.youtube.com/channel/UCXDitB ... sMwfO19h7A
 

#3
wel  
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I suggest an admin person first, then a staff accountant.

My logic is that one good admin can provide adequate support for several professionals, while adding another professional first would likely increase the time YOU spend on admin functions.
 

#4
ATSMAN  
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My first hire was a seasonal admin person. After I offloaded initial data input, organizer preparation and mailings, completed tax return folder preparation etc. I gained enough time to be more productive preparing returns and answering tax related questions within a day. My suggestion is to take a look at all the non prep related tasks that take most of your time and figure out a way to make it more efficient and offload it to the admin person.

Right now it may be a challenge to find qualified candidates because other employers are also competing for workers.
 

#5
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ATSMAN wrote:My first hire was a seasonal admin person. After I offloaded initial data input, organizer preparation and mailings, completed tax return folder preparation etc. I gained enough time to be more productive preparing returns and answering tax related questions within a day. My suggestion is to take a look at all the non prep related tasks that take most of your time and figure out a way to make it more efficient and offload it to the admin person.

Right now it may be a challenge to find qualified candidates because other employers are also competing for workers.


I’m with you… to quote a business book I read and followed. Hire an assistant or you are one.

early years I hired an assistant year 1. I just did tax prep , meetings and direct contact. Assistant photocopied, scanned, e filed etc. ALL my time was billed at high rates. Doubled my production. They would check behind me. Multiple W2s they added to check me etc.

My assistant now makes 90 K a year as she passed the EA exam.
 

#6
ATSMAN  
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My assistant now makes 90 K a year as she passed the EA exam.


Very impressive. She won't be your assistant for too long! :o
 

#7
smtcpa  
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No question, an admin. My admin saves me so much time, I don't know what I'd do without her.
 

#8
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An admin. Your professional staff isn't going to be very good anyway, and you likely won't want to pay the money for someone good.
 

#9
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Admin assistant only!

And go CHEAP and only raise if the hire is good and becomes valuable. Don't promise ANYTHING.

My first hiring mistake was to try to hire an office manager with decent compensation (and health insurance as required by my state). She had a great resume and interviewed well but she was TERRIBLE and I paid through the nose for her. In March, she could see the writing on the wall and was suddenly in a fender bender (during tax time) and wouldn't come in but milked benefits with bogus doctors notes for like 9 months.

After expensive legal and PI fees, I was finally able to get rid of her.

The group here can blame me for bad hiring, that's fine, but this scenario is all too common.

So just go bare bones and start from there.

I also agree with IdunnoItDepends (from whom I did not steal a screen name, for the record, it's an inside training joke I make with my employees so they don't give tax advice on the phone. I make them answer "it depends" whenever I ask them a question).

Any GOOD professional that will work with you will work somewhere else for more money (usually a big firm with deep pockets due to the efficiency of having many employees) or on their own.

The remaining 98% of them will cost you more time than they will help. Hiring professionals is something that has never worked out very well for me, my mentor, or anyone that I know.

I have one who is extremely brilliant, actually, and we have an endearing professional relationship. Still, my margins from this one "diamond" are disappointingly low. It's practically break even to have her.
 

#10
MWEA  
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100% on an assistant as others have stated. I’ve seen the comments in regard to professional staff being unable to compete with larger firms for talent before and I’m not disputing it as I haven’t been down that road yet, but I’m close. However, it always raises other questions in my mind.

1. Do the larger firms have an advantage because they have higher billing rates per hour to be able to pay the higher salary? Or, is the career path that could lead to management/partner status the main draw.

2. What kind of salary levels do you think a small firm would have to offer to compete for talent? A competent professional that could manage a block of clients and lower level staff that would be relatively hands-off for the owner to focus on business development and managing relationships.
 

#11
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MWEA wrote:100% on an assistant as others have stated. I’ve seen the comments in regard to professional staff being unable to compete with larger firms for talent before and I’m not disputing it as I haven’t been down that road yet, but I’m close. However, it always raises other questions in my mind.

1. Do the larger firms have an advantage because they have higher billing rates per hour to be able to pay the higher salary? Or, is the career path that could lead to management/partner status the main draw.

2. What kind of salary levels do you think a small firm would have to offer to compete for talent? A competent professional that could manage a block of clients and lower level staff that would be relatively hands-off for the owner to focus on business development and managing relationships.


1) That may be part of it, but I think it also has to do with reduced costs.

A firm with 4000 clients, for example, pays "1/10 per client" for income tax software as compared to a firm with 400 clients.

Rent and CAM per square foot often decreases with more square feet.

You likely need less printers per client if you are bigger.

Insurance cost per client.

Digital fax service cost per client.

Etc.

2) This, IMO, almost totally depends on your need to maintain a quality and a brand.

I hired an extremely bright and qualified CPA/attorney to do a few clients in a spare office. Turns out, she became so caught up in researching simple items that she wouldn't respond to client emails for 3 or 4 weeks. She also didn't warn clients of specific local taxes and other things they needed (and they came back and blamed us).

Then there are other tax preparers that will have non stop technical questions for you, not allowing you to work. You could have done those returns yourself in half the time you spent helping the preparer.

The problem list here goes on and on.

You can be like "Block" and pay$10-$20 an hour, but Block employees have pulled guns on their clients.

My point is, the more you pay, in theory, the better your hands-off product's quality will be.

If you are a perfectionist, like most of us are with our practices, you're screwed.
 

#12
MWEA  
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That’s depressing! Maybe the easier way to scale is with write up work where an employee can be plugged in more easily and trained.
 

#13
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I would agree that a firm founder can find more labor related leverage with payroll and bookkeeping etc. as compared to tax preparation.

Still, be ready to spend a lot of time answering questions and being interrupted.

Maybe others will comment on the success of hiring tax preparers, specifically.

One more problem I face is that after building trust and making a sale, new clients are sometimes furious to learn that I will not be their ONLY point of contact for EVERYTHING, let alone doing their taxes.

Another idea would be to start another brand that you didn't so much care about, like "Capitol Tax Services" and this way you won't be so upset when your preparer team messes things up.

But anyway, for starters, I'm sure you will find an admin/data entry assistant to be helpful.
 

#14
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I attended a bunch of seminars last week, one mentioned this subject. Yes, smaller firms are having more difficulty hiring compared to larger firms for various reasons, upward mobility being one of them. BUT, one thing about the larger firms is that the partners, mostly baby boomers, are NOT retiring to create space for new partners and further upward mobility opportunities throughout the organizations.

Bifurcation was referenced as a strategy for elevating the brand of primary firm while maintaining certain clients under another entity. I personally like this approach and may implement it down the road. Willingness and ability to hire remote workers is already a big factor; larger firms have made significant investments over the past 18 months in systems to allow for remote work, whereas smaller firms have been resistant. Today's workers, especially Millennials and Gen Zs, want remote work options and flexibility. They are competitive, independent, want things now, feel entitled, want to dress casually, etc. They are very much so of the entrepreneurial mindset. I have the data in some slides but they were shockingly high--I knew they were high based on my own experience as a Millennial

Found the data that was presented: 26% of FT workers intend to seek new employers post-pandemic, 40% of global workforce is considering leaving their current employers, and those that change jobs are average a 13% bump in earnings. 70% want flexible remote work options and 42% already have it in their minds they will quit if they cannot work remotely at least part-time.

I do not have all the answers. What I do know is what I gross with just myself and now one part-time worker (I let the other go, too difficult when requested to do work). I do agree wholeheartedly with admin being first hire because if you really sit down and think about where we spend out time, admin functions, across the board, are a huge percentage of our time. My strategy is lower volume, higher fees. Others want higher volume, lower fees, but the second model is far more difficult to achieve and maintain due to labor requirements.
 

#15
ATSMAN  
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Depending on how the employment situation is post Sept. 5th. when the Pandemic Unemployment benefit ends, it may be difficult to recruit even admin. assistants for what you have traditionally paid. I have seen ads in my area offering up to $25/hr. with no prior experience, plus benefits. I think the cost of tax prep has to go up if we have to hire help at a much higher rate.
 

#16
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FYI, the actual economic statistics are that the pandemic related unemployment benefits are NOT the primary cause of businesses being unable to locate staff. I know, I found this surprising too, because I also blamed it as the primary cause. It may be true in certain industries, but the primary issue is actually a dramatic mismatch between employee talent/skillset pool on unemployment vs. the available jobs. While it may be most responsible to temporarily take a job below your means to get off unemployment, it is not a requirement...you are not going to find any unemployment agency expecting a professional to accept a bartending job, for example.
 

#17
ATSMAN  
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FYI, the actual economic statistics are that the pandemic related unemployment benefits are NOT the primary cause of businesses being unable to locate staff.
That is probably true because your regular state unemployment plus the $300 extra is more than likely less than your weekly wage. BUT what this extended benefit did was to allow folks to adjust to a new lifestyle where they were saving money on transportation, baby sitting, eating out etc. and allowed them to look for other options. I have a friend whose wife lost her job last year and they have 2 small children. She was happy to watch her kids, cook all the meals at home and now got a job offer that pays $10 more per hour and is closer to their home.

The local Walmart has associate positions offering at $17/hr plus benefits. Costco has similar positions at $20/hr. Even 2 local McDonalds are offing mother's hours at $16/hr.

I think the most of the movement is at lower levels of job positions, typically the folks that may be interested to be a admin person in our line of work. Hence we will be facing some competition, especially if other employers are offering benefits. I have never offered any benefits to any part time employees.
 


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