Smaller CPA (Certified Public Accountant) organizations face significant challenges competing with the "Big 4" accounting firms (Deloitte, PricewaterhouseCoopers, Ernst & Young, and KPMG). With substantial resources at their disposal, the Big 4 consistently succeed at building their specialized talent pools, technology infrastructure, professional networks, and global presence. Smaller firms may lack the same level of resources, making it difficult to recruit top talent, expand to new markets, and increase their bottom line.
But despite these challenges, smaller accounting firms find success by focusing on their unique strengths, adaptability, and innovative recruiting tactics. More specifically, there is high growth potential by expanding employment to international talent pools. I’ve experienced it firsthand as a partner and co-founder of both CPA and global hiring firms — with diligence and an open mind, establishing a global strategy may be the key to building a profitable, high-performance accounting team with access to niche markets. Keep reading to learn how.
Best Practices: Top Talent Can Be Found Anywhere in the World
You are likely well-versed in these strategies for small accounting firms:
- Carve out a niche market by specializing in specific industries or services
- Provide personalized attention to clients
- Offer competitive pricing
- Leverage technology to improve efficiency
- Establish strong relationships within local business communities
- Emphasize your agility, flexibility, and value for clients
Each requires focus and persistence, but over time these will develop a long-term growth mindset for your small but scrappy team.
Here’s a strategy you may not have considered: Expand your recruiting and employment internationally. By leveraging the salary arbitrage of employment in other countries, you can invest in more senior-level talent, reduce turnover, increase the profit margin of your billings, and gain access to niche markets over time.
I’ve experienced these benefits of global hiring across three stages of my career:
- As a partner in a U.S.-based accounting organization, I expanded tax and audit roles in Mexico offices.
- After leaving that firm, I established and managed various CPA offices on behalf of a client, employing 60 professionals throughout Latin America.
- I then co-founded IsoTalent, a global employer of record (EOR) that helps clients seamlessly expand their employment options to any country in the world. I now work with small CPA firms to recruit and employ key roles globally, with an emphasis in LATAM.
I know how difficult it is for small firms to identify and retain talent and keep their operations moving forward. The Big 4 firms boast powerful recruitment processes to attract top-tier candidates from prestigious pipelines. They offer attractive compensation packages, professional development opportunities, and a clear career progression path. Smaller firms often struggle to compete for the same talent pool, making it harder to attract and retain high-caliber professionals.
I myself have experienced the flight risks of hiring entry-level employees. A team secures recent college grads, trains and pays them a U.S.-based salary, and hopes for the best — only for them to be poached by the Big 4 once they’ve gained 2 or 3 years’ experience at the firm. Too often small CPAs are trapped in the “incubator zone” of preparing employees for their competitors…
But there’s a simple solution to all this churn and unpredictability: Set your sights internationally to increase profitability while sourcing and retaining senior-level accounting talent. Let’s break it down.
Start Small, Then Walk, Then Run…
My first advice to clients who are curious about international hiring: Start small, then scale as you prove out the concept. Here’s how —
- Begin by moving one role to international employment through a global EOR (employer of record). Keep it simple by making it non-client-facing.
- Measure the results of moving that one role. In my experience, you could double or triple your billing margin by moving that position to LATAM.
- After tracking and verifying this profitability, move on to the next position or step up your strategy. 1 auditor becomes 3 auditors, 3 auditors become an auditing team, and so forth. This develops a rhythm.
- Next, expand to another type of role and continue building out a department. For example, a 90-person firm could produce 40% profit through professionals employed in Mexico.
- Eventually you can give client-facing opportunities to your international team and gain access to new markets in the United States. By employing native Spanish speakers, you can solicit new work in the domestic Hispanic market. You’ll have less competition and the ideal team to execute.
- Eventually 40% of your profit could become 60%. If you decide to sell your firm, that profitability will drive valuation and increase the sales price.
What is a global EOR? This employer of record service allows organizations of any scope or size to legally hire outside of the United States, without having to form a legal entity or deal with the hassles of in-country regulations. (Think taxes, payroll, benefits, and worker's compensation.) IsoTalent is the industry's only full-service hiring solution that can both recruit and legally employ these workers on your behalf.
Focus on Compliance, Special Projects, and Building Profitability
Here’s what I recommend to CPA clients with no previous experience with global teams: Be strategic about which responsibilities you take abroad. I can vouch for a focus on compliance and special projects — these are easy to manage, complement your existing U.S.-based tax projects, and can be adjusted and optimized over time.
The available LATAM (and other global) talent is also highly competent at managing your compliance-related projects. You’ll find that if specialists have any questions, they quickly investigate and find a solution, thus learning and gaining expertise as they go along.
Use global motions to establish best practices for hybrid team management. In my experience hiring in LATAM, these are the essentials:
- Include, engage, and teach your global team members to stabilize their long-term tax expertise working with U.S. projects.
- Incentivize U.S.-based managers to champion the LATAM teams. Make it part of their annual goals and KPIs.
- Again, track and measure the outcomes of these global roles. This will expedite expansion and drive profitability.
Expand Your Diverse Skill Sets and Multicultural Access
Working with CPA teams in LATAM has been one of the most rewarding experiences in my professional career. It’s allowed me to develop relationships with top global talent, become fluent in Spanish, and expand my knowledge of regulatory environments, international taxation, and cross-border transactions.
You too can enjoy the personal and professional benefits of adding global talent to your operations. Consider this —
- Hiring CPA specialists in LATAM adds diverse skill sets and perspectives to your firm. These professionals may have valuable experience to enrich the company’s capabilities and enable it to offer a broader range of services.
- LATAM countries (such as Mexico) have a large population of English-speaking professionals versed in both American and their respective business cultures. Hiring these employees can provide the firm with a pool of bilingual professionals who can effectively communicate with clients and navigate cross-border transactions. This can be particularly advantageous for firms with clients or operations in that country, or clientele with those connections here in the United States.
- Adding global talent to your small CPA firm gives you access to niche markets while still offering a thoughtful, personalized accounting experience from your headquarters. As you expand your non-client and client-facing roles, your international professionals help to cultivate services and values that may be limited as a domestic-only operation.
To remain competitive with the Big 4, small firms must distinguish their agility, niche marketability, diverse skill sets, and innovative tactics on a hybrid stage. Don’t assume major organizations are the only ones with access to multinational business operations — you too can develop a profitable, high-performance CPA culture with a strategic global presence. Talk to our team of experts to learn more.