The Wize Way

Episode 110: Keeping your team healthy - More Givers and Less Takers!

• Wize Mentoring for Accountants and Bookkeepers • Season 1 • Episode 110

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When hiring new staff for your Practice, do you hire based on Education? Work experience? Set of skills? Or whether a candidate will bring a good balance to your resource mix? 

In this week's episode of The Wize Guys Podcast,  Thomas Sphabmixay together with Jamie Johns and Kristy Fairbairn discusses how using the capacity planner helps firm owners with finding the right team mix. 

Unlock the secrets to effective hiring in accounting with Jamie from Sky Accountants. Discover how Jamie revolutionized his approach from informal methods to structured processes, ensuring the right fit and boosting firm success. Learn why transparency and integrity are crucial in hiring and understand the devastating impacts of a bad hire. Jamie also sheds light on the importance of mastering a hiring formula and maintaining team compatibility, with a striking 80% of success attributed to the ability to get along with others.

Take a deep dive into capacity planning and the qualities of successful client managers. Understand how leveraging a capacity planner can optimize your team's efficiency and productivity, maintaining a balanced workload and fostering steady growth. Jamie shares invaluable tips on evaluating candidates' financial concept understanding, ensuring they can communicate complex terms with clarity and confidence to clients. Join us for this episode brimming with actionable insights and strategies to transform your accounting practice into a seamless, thriving business.

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PS: Whenever you’re ready… here are the fastest 3 ways we can help you fix and grow your accounting firm:

1. Download our famous Wize Freedom Strategy Map for FREE - Find out the 96 projects every firm owner must implement to build a $5M+ firm that can run without them - Download here

2. Need to Hire right now? Book at 1:1 FREE hiring assessment with our WizeTalent recruiters to help find your next best employee locally or offshore – Click Here

3. Book a 1:1 Wize Discovery Session – Spend 30mins with our Wize CEO, Jamie Johns, a $7M firm owner who is ready to give you his entire business plan to build a firm that can run without you – Find out more here

Wize Mentoring:

From Wize Mentoring is The Wize Guys Podcast, a show about accounting and bookkeeping practice owners and the many stories, lessons, and tips from their experience of transitioning from a time- poor practice to a business that runs without them. I hope you enjoy and subscribe.

Thomas Sphabmixay:

So look, today's is on the theme of people. It's a really, really big topic that you know, at firms at all stages and all sizes, constantly encounter problems around people, the need to continuously plan a strategy around the people. And there's so much to talk about here and, you know, just want to get started with you, Jamie. Now, hiring is such a huge topic. It's a problem that CEOs of major corporations face, it's a problem that small cafe owners face and it's especially something that we face in our accounting and bookkeeping industry.

Thomas Sphabmixay:

Everywhere across Facebook, people are saying I can't find the right person. I've hired this person and they're not showing up for work, and clearly there's something that people aren't doing right when it comes to picking up the right stable terminal for their firm. So, Jamie, when it comes to hiring new staff for your practice at Sky Accountants and you're running five teams you're at four or five million turnover, you have an extensive crew of people and it's been such a journey for you to be able to curate such a good team together, as well as the leaders to run the place. But so you know, when hiring people, do you hire based on education or work experience, a set of skills or qualifications? There are too many factors here. Can you help us piece this together for us?

Jamie Johns:

Absolutely, Thomas. So I'll take you back to when I first started and the first hire I ever made. I remember it was just a referral from a friend who knew that I was looking for an accountant to hire and that person came to my practice and said you know, I want a job. And I think you know, prior to that there was a quick phone call, text message, you know, meet at three o'clock and that person came in and sat down for about 20 minutes and I said oh, do you want the job? All right, that was 20 years ago, 2004. Well, almost 20 years ago. So I'm just giving you the worst way to hire.

Thomas Sphabmixay:

Don't hire on gut. Just because you like it.

Jamie Johns:

That was just the worst way to hire, but now it's like the total opposite. It could be more the opposite, Thomas, where you really want to hire, but now it's like the total opposite. It could be more the opposite, Thomas, where you really want to process to hire and you're hiring decisions are one of the most important decisions that you ever make. Because, as you said I think you know, I don't know the last count, I think we had 30- odd team members at Sky Accountants. These days, we hire on using a process, using a mythology, and over the years, I had to teach myself that. So I had to get external help from America, from different coaches and specialists who know how to hire, and then bring that into our industry.

Jamie Johns:

So, yeah, it's been a real journey, Thomas, but the keys to hiring and building a team, first of all, you want people with transparency, so honesty, integrity, and I think that probably goes in any industry but the trouble is, how do you find that out if someone's going to be transparent with you through their career? And so the more senior the person, the more impact it can have on your firm if you hire the wrong person. So if you hire the wrong person, it has a massive impact and we call that a mishire. It's as Ed says your greatest asset will be your team, but also your biggest challenge as well.

Thomas Sphabmixay:

You know, I really recall how insightful and impactful it was going through your mishire calculation sheet, especially going through the wise talent process together with Chris and Danny. And it's crazy because if you make the wrong hire, their salary might be, you know, say 40,000, but you add it all up the costs to clients, potentially leaving the cost to off-board people. On-board people recruit people. By the time you're done detecting that that person was a mishire and then having to get rid of them and replace them, we've spent four times their salary or something to that magnitude, and it's just not a gamble. We want to get it wrong. It can't feel like we're going to the casino or something trying to get the right people.

Jamie Johns:

And that doesn't even account the emotional turmoil that you'll tend to go through as well. And not only that if you have a bad hire, it can sort of look bad on the firm as well, and it's not good for culture either. Thomas, I heard someone say the other day it was a successful guy. He said 80% of your success will depend on your ability to get along with others. That's just about forming teams. You know, over the last 20, 30 years, I would have to say that is 100% right. 80% of the success is your ability to get along with others. Very, very true. So you really need to master this hiring formula. You know, if you're going to hire people, add them to your team and then keep them as well. You know like you've got to keep people as well, and I was talking to an account this morning about you know how you keep people, and it's a good topic too.

Thomas Sphabmixay:

Wanting to get into that as well. There are so many factors. Clearly, personality and attitude and transparency and integrity are huge elements, but where do the education and the qualifications, and experience weigh up in this mix? Like you know, of course there's a maybe like there's a resource mix too that we need to consider. But just in general, what sort of people have you noticed seem right as a fit for an accounting and bookkeeping firm?

Jamie Johns:

Yeah, it's pretty easy now that I've gone through all the processes over the years and dealt with the firm. Yeah, it's pretty easy now that I've gone through the process over the years and dealt with probably hundreds of firms and hundreds of hires in the last 20 years. Yeah, there are three key pillars to it, and we teach this in the Wise Talent. So the first one is honesty and integrity. In Warren Buffett, he hires honesty, and integrity first and foremost. He owns lots of businesses and so you sort of got to work out what is the definition, what is integrity and what is honesty. And it's really five points. T he first four points are really what a person thinks is first, so what they write down, what they say, and then what they do. Now, if you find a person who thinks one thing and says another and then does another, Thomas you know I call that that's called walking chaos. That's walking, talking chaos. So what you want to do is find someone that has those four things aligned, so the way they think, what they write, what they say, and what they do are all aligned, and that's really the definition of integrity. So you've got to be able to test that and the gold ring that surrounds all that is that a couple of referees, not peers or colleagues, but a couple of referees who had the power to hire and fire them confirm the first four things I just said. Right, so if you can follow the wise talent way right and you learn how to do that, then you can be pretty well assured that that person has a certain level of integrity and honesty.

Jamie Johns:

Because, as Warren Buffett says, if they don't have integrity, honesty, and if they've got really good skills and they're really responsive in energy, they'll kill your firm. So he has this funny quote that he says. You can look it up, it's on YouTube actually. Warren Buffett gives you advice. He said if you're going to hire someone without integrity, you want them lazy and dumb. That's what Warren Buffett says. So I always, when I'm talking to people I use this really extreme analogy you don't want to hire a Hitler. You know the guy was extremely smart, extremely evil, and had an extreme lot of energy, but he had no integrity, did he? And we know what happened to Hitler.

Jamie Johns:

So the other two pillars just to touch quickly, Thomas on hiring is the second point that you want to hire on is responsiveness and energy. The way that a candidate behaves during the hiring process is exactly the way they'll behave when they're working with you. So are they responsive? Do they fill out the forms correctly? How fast do they get back to you? What sort of questions do they ask? Like, everything that the candidate does in the hiring process reveals to you as the hirer, what they're going to be like. That's the second pillar, and the third pillar is their skills and experience. So you want to make sure you hire someone who's got the skills and experience that you expect for the particular role and for the particular salary that you're going to offer as well. So they're the three things honesty, integrity. The first one's the most important. You need to know how to test that, how to actually work that out. Responsiveness is energy, and then the last one, is skills and experience. So there, if you can get someone with those three things, that's your ideal person. That's been my experience.

Thomas Sphabmixay:

And you know the sense that I'm getting is that honesty and integrity, as well as energy, are non-negotiable things. Right Like that's something that every team member needs to have, but when it comes to the skills and their experiences, as long as they do have that honesty and integrity, as well as the energy, the firm is going to be in a great position to be able to train them up.

Thomas Sphabmixay:

So all throughout our organization we have people at various stages in their career. They might be a senior, an intermediate, or a junior. But what I also find challenging, and what I notice is a huge challenge in firms, is how many seniors I need to have. Should I bring on a junior? Or, if I bring on a junior, how do I account for the productivity that it might take away from my managers having to train them, and a resource that you've developed and we use all throughout Wize is the capacity plan, and that's been extremely instrumental in helping a lot of accounting and bookkeeping firms be able to plan out their people strategy. And sometimes, when I'm taking a look at this capacity plan, I sort of imagine a few generals sitting over a war room table and planning out which direction their troops are going to march in and planning out all these possible scenarios. Jamie, can you talk to us a little bit about the value that the capacity planner brings in actually figuring out the right resource mix?

Jamie Johns:

Yeah well, the capacity planner is probably one of the most important tools I'd use, still to this day, to run my firm Sky. So, in a nutshell, if you haven't heard of the capacity planner before, basically it's just a tool that determines how much work your firm can get done in a year. So it's not an exact sign. It's very close, it's very good, Thomas. The capacity planner gives each individual their own KPIs, so in terms of productivity, their charge out rate, and their billable hours for the year. So it doesn't matter whether you're fixed fee or not.

Jamie Johns:

You still want to measure efficiency. That's the important thing here is measure efficiency and what the Capacity Planner does. It just shows you the amount of work that the team when I say team, a team should be five to seven people and as a rule of thumb, five to seven people in that team can do about a million dollars. So the way to grow your firm is via teams. In each of those teams you have made up of finders, minders, and grinders, as we say, and the capacity planner, you should compare the capacity of the team against the actual fees that you're going to do. And what you don't want, Thomas is where you've got no capacity. So, for example, if your team's got a budget of you know, you know that you can do fees of $500,000 for the year. But when you work at your capacity based on the productivity you know, if it's 400,000, then you're 100K short of capacity. That means you've got no capacity, so your staff are going to cry.

Jamie Johns:

Staff will cry. You'll cry too. You'll be crying all the time because of the hours you'll be working. So with the capacity planner, you know it's just like a religion now at Sky that we look at our capacity planner when we hire and you try and hire so that you've got 10% to 15% spare capacity and at the same time you can work at your gross profit too, Thomas. So you know this is all quad, two activities, not urgent, important. So as a firm owner, you've got to start thinking ahead, always be thinking ahead, and if you've got spare capacity, that's fantastic. That means that when you meet a new client or your marketing team brings a new lead in, the lead goes to yourself or whoever's the senior client manager.

Jamie Johns:

Yeah, you can take it on. You've got spare capacity. But I've even experienced myself years ago where I had no capacity and then I had like a really nice referral and it was a nice big job and I was like oh you know, I can't even service the clients I've got. You know, you don't want to knock back work, do we? No one does.

Jamie Johns:

No no you know you don't want to knock back work, do we? No one does, no, no, yeah. So if you haven't seen the capacity plan, you should reach out to us and get into our new sat, our sas software. We've got the wise hub, which has got the new capacity planner built into it. That's like just a key tool to grow.

Jamie Johns:

I would think over the last four years, Thomas, about 80 of the firms that I've met from Australia and the different countries about 80 at the start like simply lack capacity. They don't have capacity and sometimes part of that reason is like they have the senior client manager or the owner's productivity at 90 percent. You can't have that everyone. You need to have a senior client manager, who needs to win sales as well. Probably 60 percent, the highest 60 percent, because the other KPI there is the ability to talk to the leads and the prospects and win new fees, and so you should be aiming to grow at about 10% per year. 10% is not too hard but it's not too easy. So that's a really good figure to grow by 10% a year and keep your eye on that 10%.

Thomas Sphabmixay:

That's a really interesting point because I hear a lot of questions about this, about the varying productivity levels depending on whether we're dealing with a finder or a minder, or a grinder. And just to clarify for everyone, by productivity, we're talking about the time spent on processing the billable work, the actual work that we can charge out for. So, Jamie, why is it so important that we give these senior client managers the space? If we're paying them $200,000 a year? Why can't we get 90% productivity out of them because don't they have the highest charge- out rate?

Jamie Johns:

Yeah, they do, and you know it's a good question. You know the highest- paid people in the world are salespeople. If you do your own research, the highest- paid people in the world are salespeople, you know, and your senior client managers and your assistant. They work in sales. So you know, if you've got, you know, a flow of referrals coming in, and your referral should be about 20% of your overall leads every year. So if you're not getting 30% of everyone, you sort of want to question why aren't I getting 30% of referrals? This is when you start managing it and start measuring it. So you'll get referrals and you'll get leads from your marketing as well. So you'll get referrals and you'll get leads from your marketing as well.

Jamie Johns:

So you've got to give time to the client managers to do what I call LAPS. You know, and LAPS stands for leads, leads to appointments, appointments to presentations, and it should track the amount of new fees that you're winning, right? So you know that'll give you a conversion rate as well. So what I mean, conversion rate, is what percentage of leads and prospects are you converting? So you've got to set their productivity to 50 or 60% to give them time to do that. And the other thing they've got to remember. Thomas, the senior client manager has to manage the team as well. Don't forget the four or five people that the senior client manager is in charge of as well, and that takes time. You've got to manage people as well.

Thomas Sphabmixay:

Exactly right. Thank you so much for that, Jamie, and I hope we all had our notepads out and been taking down notes because that productivity level question regarding client managers is something I hear a lot of and I hope that's clarified any of those points in your mind. But now I want to dive into this about the middle managers of our assistant client managers and our senior production managers. And Christy, you had a bit of experience, a lot of experience, I should say, going through this already. Okay, you know, Kristy, you know, hearing from yourself, you're running a bookkeeping firm as well. You've had major experience hiring for some very difficult and high-level roles that you needed for your team. So you talked to me what was your screening process like and were there any distinct characteristics or skills that you looked out for when hiring for a specific role, say an assistant client manager or senior production manager? Yeah, yeah.

Kristy Fairbairn:

So I think Dani and Krizz would attest to the fact that I am the Goldilocks employer, looking for the one who's just right, and I've found a few that aren't quite right. I've met some great candidates whilst looking for an ACM, but it's keeping in mind the roles and responsibilities and the pathway that you have for them, and you know so. I'm not looking for someone who's the most technical, skilled person, because that should be in my production manager's role. I want someone who'll be capable of picking up things and assisting the team, but it's really about their ability to shift gears, and how well they get along with others. Are they going to be inclined to hide behind emails and not build relationships with our team and our clients, or are they the kind of person who's comfortable from the beginning of an interview, meeting someone new in a, you know, pressure situation?

Kristy Fairbairn:

If they fall apart in that interview, I'm a bit worried about how they're going to go with the clients to begin with. So you know you're looking for all of those things and, as Jamie said, each step of the hiring process is a way to assess the candidate. It's not just in the interview or what's on their resume. It's how quickly the job ad goes up to them responding with an application. If you've got a bit of a funnel, how quickly did they complete the next step? If they're slow, oh, I wonder. If they're distracted, I wonder what's going on and you?

Kristy Fairbairn:

know you don't write them off, but all these things just sort of contribute towards the questions you might ask when you meet with them and keep working through them. And again, it's not rushing to throw a person at the problem. I would love to have a full-time ACM on my team. Love to have a full-time ACM on my team. I'm starting to feel the pinch, six or seven weeks in, of not having that person, but I don't want to bring the wrong person in and have to do this all over again. So you know my team and I are supporting each other as best we can. We've had our best BAS quarter ever in five and a half years, so we're remembering those great moments as we struggle through to find the right person, because I have a wonderful team and I don't want to disrupt that by bringing in the wrong person to them.

Thomas Sphabmixay:

A hundred percent. You have an absolutely amazing production team and you know your senior production manager does such an excellent job the fact that I remember when we first met Christy and your team from the production below was just on point and you've come very close to finding an excellent assistant client manager. And you know, I guess, what's the saying? It's like higher slow, fire fast.

Thomas Sphabmixay:

That's basically what you're doing, and no but, Kristy, building on the distinct characteristics that you would like in a client manager and I noticed that you're saying that they don't necessarily need to be the most technical If they break down in an interview, then that's obviously not going to be a good sign if they are in front of a client. But what other characteristics are you looking for? You know, maybe in the way they talk or their language.

Kristy Fairbairn:

Yeah, so definitely, something that always sticks in my mind from Jamie is that ability to shift ears and speak to all your clients, not just certain types of clients.

Kristy Fairbairn:

You want them to be able to speak with CEOs of $5 million firms if that's the kind of client you might have, as well as the tradie who you know is going to send you photos of their feet when they upload their bills in Dext. You know it's really just. There are two different elements there and someone who can work their way through as well as dealing with a global team. You know we have different backgrounds and things to our team in Australia, to the team in Australia, to the team in the Philippines. So someone who can work their way through in a kind, respectful way is really it's such an important part and you don't want to feel like it's not always looking for someone just like you who can speak just like you do, but someone who will represent your business across all aspects in the way that you would want, even to the point of sending them along to conferences to learn and better their education. They're an extension of you.

Thomas Sphabmixay:

So if you're going to have someone on your team doing that, you want to feel confident that they're able to shift gears really well in different settings and situations that's a really interesting topic because a point that you've made because of their ability to switch gears with the clients, you know, would translate to their ability to switch gears internally with the team as well, especially since yours is, you know, from abroad. You know, if they aren't able to do that, then they're expecting to be like a lone wolf or something. It's the fact that the team can complement each other and make up for each other's weaknesses that would allow them to be more effective.

Kristy Fairbairn:

Yeah, absolutely, and you know, as you said, I'm really fortunate that when I started to work my way through the Wize 18 steps, I was working on my production team and I had a couple of people and we built it. So we do have a great production team all in the Philippines and they're critical to my business. So to have someone come in who's not welcoming and open to them straight away just isn't for me. They need to be comfortable and, yeah, able to embrace every person that we have on our team from the beginning 100%.

Thomas Sphabmixay:

It's such an easy part to overlook because we're just so focused on getting the job done, but that is so detrimental to our team, NPS, and the morale of the team. Thank you so much for that, Kristy. Thank you so much for your insights, Jamie. What would be one takeaway or action point we should go away with?

Jamie Johns:

Yeah, here's a good one. So when you're doing your next hire, maybe for a client manager Well, here's a good one. So when you're doing your next hire, maybe for a client manager, get them to explain in their terms as if they're talking to a client, what debtors are, what creditors are. Get them to explain what a credit loan account or a debit loan account is, or Division 7A, because what Christy touched on was, you know, if you're hiring an assistant client manager or senior client manager, they've got to be able to speak at a level that the clients understand and you know, like a really classic question whether you're a bookkeeper or an accountant is.

Jamie Johns:

I remember when I was dealing with clients, the client would come in and say, hey, Jamie, look, you've told me I've got this big profit and I've got this big tax bill, but where's the cash gone? I've got this big profit and I've got this big tax bill, but where's the cash going? So you have to be able to explain that it's in debtors and stock or wherever it is right. So this role of trying to, you know, just hire someone and throw a body at the problem in your firm is just wrong. So don't put people you know, whether it's a senior bookkeeper or senior accountant or whatever in front of clients, if they can't explain to them at their level you know, switch gears at their level what those things are, because a lot of clients will leave the office and say, well, that just bamboozled me, that went straight over my head.

Jamie Johns:

Ed has a great story where clients used to say to Ed oh, you're the first accountant I've ever understood. Right, you know they'd walk out and you know I think Ed would get a lot of referrals like that because he would bring the conversation like down to their level, which was fantastic. Because you know how Ed always talks about first seeking to understand before being understood. So that's pretty important. So I think a practical tip Thomas is, if you're looking at a client manager is get them to explain what some of those topics are. You know, just in the work that you do every day because if you can understand them, the clients can understand them. It's a tick in the box there.

Thomas Sphabmixay:

A hundred percent. There's no point in them sounding like a textbook in front of our clients. Exactly, and I guess some accountants and bookkeepers I've seen try to flex their knowledge on the leads and clients. That's not the place to flex any knowledge. It's a place to actually discover and understand their problem.

Jamie Johns:

It's pretty tricky too, because I remember I used to try and explain to clients what a franking account is without getting too technical. But you know, companies have a franking account. I used to explain well, it's like the cricket scoreboard when you pay tax, you know you got to win, but when you pay a dividend, you know you get the tax credit. It comes off the scoreboard. So you've just got to use your own analogies that you know. You think that the tradie or the people can relate to it, and as long as they get the basics of it, you're fine.

Thomas Sphabmixay:

It sounds so simple, does it Jamie? But actually those are the things that a deeply interpersonal person would be able to do who also understands their field quite well.

Jamie Johns:

Yeah, I'll just finish on this. This Ed always tells the story about two GPS general practitioner doctors and I've seen Ed do this in his workshops and he'll say to everyone who's going to be the most successful? The GP is an absolute genius and has no bedside manner. So if you get sick and he comes in, he says, oh look, you've got three months to live and just tell you like that, or the GP that has really really high interpersonal skills but still competent. The key is not incompetent, he's still competent. Ed says, well, who's going to be the most successful GP? And Ed will always ask you the GP that's got really good interpersonal skills, who really has a great bedside manner, but who isn't a genius. So it's just another analogy of what we're trying to talk about here.

Thomas Sphabmixay:

That's so true. Look, especially when we're dealing with taxes, it's very sensitive. Clients are already making themselves vulnerable to us and sharing information with us. We can't put them off in that way. We have to be able to understand where they're coming from, and so thank you so much for that, Jamie, and all right. Well, thank you everyone. Be sure to check us out in the next one.

Wize Mentoring:

Thanks for tuning in. If you liked this episode, please remember to subscribe and leave us a five- star review For more practical, wise tips on how to build a business that runs without you, head over to wizementoring. com/ podcast to download a free copy of The Accountant's 20-Hour Workweek Playbook. We've included a link in the show notes below. See you in the next episode!