3 min read April 2024 – In an interview with Invest:, Bill Hickl, Texas tax market managing principal at BDO USA, P.C., talked about the challenges facing the accounting profession given the lack of accounting graduates. He also discussed how the firm leverages technology and equity to attract employees and reduce turnover rates.
What have been the most important successes for BDO in the Greater Houston area over the past 12 months?
Texas, including major cities like Houston and Dallas, has experienced a favorable influx of businesses and people over the past 12 months, driving significant growth across the region. In fact, the BDO Houston office grew over 14% due to the region’s rise in popularity and our ability to attract talented people. As one of BDO’s Top 3 tax practices nationwide, we remain committed to investing in our BDO Houston office. We recently added three new principals, bolstering our bench of talent, and we continue to promote internally to ensure we provide the highest level of service for clients.
Moreover, at a higher level, no other company in the Top 10 accounting firms has grown as much as we have. According to Accounting Today, out of the Top 10 firms, BDO had the highest growth at nearly 25%. BDO is excellently positioned in the market in terms of our resources, size, scale, and footprint. With over 70 offices in the United States and ranking as the fifth-largest firm globally, we offer unmatched access and service to our extensive client base, many of which have international operations.
What strategies is BDO implementing to attract and retain the talent it needs to support its growth?
Having a winning brand and a winning culture are key factors. With a brand legacy spanning over 100 years, our company prides itself on fostering a culture of excellence and strong leadership. Helping people thrive every day is one of our core values. Locally, I’m proud that our Houston office has been consistently recognized as one of the city’s Best and Brightest Companies to Work for.
Nevertheless, the accounting industry faces the challenge of not producing enough graduates to advance the profession, which makes attracting and retaining talent an uphill battle. The industry needs around 135,000 accounting graduates a year and we are only getting around 50,000. One factor contributing to the talent shortage is the five-year requirement to obtain a CPA degree, compared to the four-year timeframe for a finance degree. Although there are discussions regarding potential revisions to the CPA program duration, it remains imperative for us to explore strategies to maintain our competitiveness in the market.
Retention also becomes increasingly important when there are few graduates. One way we’re attracting new talent is through BDO’s new employee stock ownership plan (ESOP). While in accounting firms traditionally the partners or principals own the firm, in an ESOP company, employees can own equity in the firm. This plays a pivotal role in attracting and retaining skilled professionals, not only fostering a sense of ownership among employees, but also contributing to long-term commitment and engagement. We are excited about that change as it enables us to help people thrive. Traditionally, the turnover rate in public accounting is around 20% but last year our turnover rate dropped a few percentage points below that.
Another pillar of our commitment to recruit, empower and retain the best people in our industry is BDO Flex. BDO Flex is foundational to BDO’s business and has been the primary driver to help the firm’s professionals find a work-life fit for the past decade. Built on a structure that was both firm-wide and local, Flex incorporates active training, communications, resources, and activities to promote widespread understanding and usage. Additionally, Flex recognizes that the most important factor is that the work is done well, not regulating how, when or where the work is accomplished.
What industries or sectors in the Greater Houston area show the most demand for BDO’s services?
Houston is the energy capital of the world, and the city wants to preserve that status, even with the shift towards green energy. While we boast expertise in the oil and gas sector, we recognize that green energy represents the burgeoning industry of the future.
Furthermore, because of Houston’s robust port infrastructure, distribution and manufacturing are strong sectors locally. Houston also boasts a major top-tier university and a thriving healthcare sector, exemplified by the renowned MD Anderson Cancer Center, which draws patients from around the globe seeking treatment.
What are the most significant trends shaping the tax industry in the Southwest region?
The upcoming change in Congress and the potential for a new president in 2024 may drive tax policy changes, so it’s likely the trend of uncertainty surrounding tax law and policy will continue. The ever-changing nature of tax regulations presents an advantage for us, as our clients continually rely on our expertise to navigate the landscapes. As an example of these changes, the Employee Retention Credit—a significant credit program—is set to conclude a year and one month early. Credits and incentives are an important part of our tax practice as they offer valuable opportunities for our clients, but when such a program is discontinued, it can impact our clients’ ability to leverage tax advantages and receive cash when they need operating capital.
What advice would you give to businesses so that they can adapt to the changing tax landscapes?
My best advice would be to view tax advisers as business advisers. We constantly use that distinction in the marketplace, particularly when competing for business against firms that solely focus on compliance. Unlike those firms, we prioritize offering comprehensive advice and consulting services alongside tax return preparation. Moreover, when clients are considering transaction or business expansion, it is important that they engage their accounting firm and utilize our expertise as advisers throughout the process.
Clients should have a relationship with an adviser that has the resources, skills and expertise necessary to navigate complex tax law, whether it is the United States or on a global scale. In the case of BDO USA, we offer comprehensive support to guide clients through various tax challenges, whether it is just day-to-day operations or entering an intricate transaction. Through our partnership with Microsoft, we’ve also expanded our capacity to provide clients with a more holistic view of their financial landscape, which we call ‘Total Tax Liability.’ Our Tax Automation & Innovation team collaborates with clients to analyze their Total Tax Liability and produce practical solutions that optimize processes, extract, transform and load source data, automate tax calculations, and implement or enhance the use of technology to streamline tax reporting.
What are the top priorities of BDO for the next two to three years?
Technology stands out as a top priority for us. We must harness technology to perform our job more efficiently. The COVID-19 pandemic changed how we use technology to do our job, from having Teams calls to preparing tax returns. Fortunately, our audit team and advisory business were already acclimated to remote work, thanks to significant investments made prior to the pandemic. Although the transition wasn’t seamless during the shutdown, our proactive investments enabled us to swiftly adapt so we could hit the ground running and have a record year.
We are continuing to make investments in technologies, with a particular emphasis on AI. Recognizing that AI is not a one-size-fits-all solution, we believe its true potential lies in tailoring it to address specific challenges or enhance processes. When implemented strategically and responsibly, it has the potential to modernize and improve functions, allowing our professionals to drive greater value within BDO. For example, we have a big initiative on the horizon called Userverse, which focuses on how technology helps us manage our business, including engagement planning, workflow processes, and overall efficiency. Moving forward, we will focus on elevating our capabilities and finding ways to improve our processes.
My goal in the Texas market is to sustain our upward trajectory and capitalize on our existing success, since momentum is a powerful thing. A solid formula for our continued growth lies in cultivating a team of smart and passionate people who love what they do and are invested in the success of our business and their own professional development. My job is to nurture this momentum by fostering motivation among our team members and actively hire top-tier talent to further strengthen our capabilities.
For more information, please visit:
