Filling talent gaps in the finance department is tough, and leaders inevitably find themselves having to weigh accounting staffing vs. in-house teams when hard-to-fill positions open up again – and then decide which option will best suit their needs.
Often, that decision comes down to selecting between two less-than-perfect options or finding a third alternative, like virtual accounting support. Each of these options – and to a lesser extent, options like freelance and fractional workers – come with their own set of definitions, jargon and use cases.
Wading through it all to come up with the best fit can be overwhelming, so let's go back to basics. Read on for foundational definitions and a snapshot of similarities and differences between using the talent you'll find with accounting staffing vs. in-house teams vs. virtual accounting support.
This is the model most leaders are most familiar with. In-house teams are, unsurprisingly, made up of accounting professionals that operate completely within one company. Hiring, onboarding, professional development and the day-to-day function of the finance department all occur onsite within a closed loop, and that loop is the company itself.
o Face-to-face recruitment helps determine culture fit
o Straightforward onboarding with established processes
o Control over compensation package costs
o Engagement strategies for employees can help bolster employer branding
o Talent pool is limited -- restricted by geography and pipeline supply
o High turnover creates extra costs and leads to cyclical hiring
o Onboarding strains teams that are already short-staffed
o Employer assumes responsibility for benefits and "employee burden cost" (EBC)
o "Hidden" costs like cost-per-hire (CPH) and early separation stack up quickly
Accounting Staffing (VS In-House)
Accounting staffing as a talent sourcing or hiring model looks very similar to in-house accounting but has a few key differences. Like in-house teams, accounting staffing placements perform the day-to-day function of their role within the finance department onsite.
Unlike in-house teams, the hiring, onboarding and professional development initiatives (if they exist) are all handled by a secondary organization – the staffing firm. Increasingly, they're handled by a tertiary organization – a subcontractor hired by the accounting staffing firm.
o Gives the ability to fill positions more quickly
o Staffing firm shoulders employee burden for you
o Alleviates opportunity cost by taking on the interview and hiring process
o Overhead and employee burden cost is passed through to you
o Staffing fees in addition to all other costs associated with a new hire
o Lack of employee experience initiatives within staffing firm can lead to disengagement or turnover
o Won't always result in a permanent hire
o Some contracts don't provide refunds or replacements in case of early separation
o Resentment between in-house and staffing firm hires can lower morale
Virtual Accounting Support
When someone refers to virtual accounting support, they're referring to what used to be called finance and accounting outsourcing. That term no longer describes the solution effectively and has been updated to better define the solution.
As with accounting staffing, virtual accounting talent is sourced, retained and developed by a secondary organization – the virtual accounting support provider. As with in-house teams, the
day-to-day operations of an organization's finance department takes place within a closed loop – but the closed loop now encompasses two organizations: the provider and the company. The result is a collaborative workday: onsite and virtual teams operate within the company's established processes and to their standards, but from different locations.
o Has access to broad, global talent pools that follow GAAP
o Provider takes on the hiring and employee burden cost
o Provides rigorous onboarding and training experience
o Hires for retention by investing heavily in the talent they hire
o Streamlined process and documentation are a byproduct of initial and ongoing training
o Costs are not passed through to clients
o Not all providers are created equal – find one that shares your values
o Not always an ideal solution for temporary projects
o Some providers have minimum hiring requirements – but many don't
There are many ways to fill that open position in your department, but which one is right for you? Our Three-Part blog series is designed to help you decide. Watch for Part 2 of this series to read more about the best hiring model for your needs.