Managing Director Theta Financial Reporting
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Managing Human Resources for SMB Clients During COVID-19

Chris Biggs, Managing Director of Theta Financial Reporting – a chartered accounting and consulting firm that specializes in flexible and contracted talent – discusses how CPAs can address HR issues with their small business clients.

Apr 30th 2020
Managing Director Theta Financial Reporting
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Our current health crisis has presented some unique challenges for accountants, as millions of workers being furloughed and an expected 25 percent of businesses thought to close because of the COVID-19 crisis. Because of this, the relationship between accounting and human resource departments has become more important than in any other time in recent memory. Specifically, CPAs are looking at the bottom-line reality while HR professionals work to balance the productivity and motivation of a team during this difficult period.

During my years of working across two of the Big 4 firms, the World Bank and now with a variety of companies at different sizes for my firm, I have developed ways of interacting with different departments to ensure a transparent and effective method of working together. During this crisis period, these should be useful for CPAs to help navigate the unusual and choppy waters ahead.

Staying Connected

This period will change the way that information is transferred between people and departments. During this time, the flow of this intelligence between accountants and HR professionals will take longer to collate and share. Moreover, for the foreseeable future, this will need to be incorporated into plans and timelines and set out well in advance.

In addition, last-minute requests from human resource teams will not be able to be carried out at short notice. As such, CPAs should be transparent and open to help aid the transition from what were one quick requests, in-office conversations to longer, slower methods of communication and structure.

Currently, human resource teams are stretched and - in many cases - under resourced, so it is likely that there will be a lack of support from their side. Ensuring transparency and setting out clear objectives and time frames will help smooth the bumps that will inevitably arise.

Cloud is Crucial

Secondly, one issue that may arise is that if human resource teams have not moved to a cloud-based environment fully, they may not have access to all the information needed by accountants during this period. Many HR professionals have been comfortable in an office environment for their entire working lives, and this period is turning working processes and locations upside down. This means that many teams have had to adapt to a new way of working in a very short space of time.

As a result, some processes or pieces of information that accountants need, may not be immediately available to them as they have been before. Therefore, to combat this, it is important that all possible types of information CPAs may require during these times are identified and discussed with the HR teams as early as possible.

Moving forward, decisions will have to be made on how to gather information or work around this lack of information. Again, this could cause some conflict between teams, but being transparent and open with one another will help work around these issues in the short and medium term.

Getting on the Same Page

Third, even during the COVID-19 crisis, normal activities need to continue. It is common around this time of year for pay raises and bonuses to be due, and both accountants and human resource professionals need to be prepared for this period.

These are not easy decisions in the current environment and have far ranging impacts on employee’s well-being and motivation during tough times. Therefore, the economic decisions by accountants should not be made in isolation of an understanding of their impacts to employees and hence HR will need to be involved.

Human resource teams will be asked to produce a range of analysis for accountants and need to address the wider issue of how pay raises and bonuses will impact people now and in the future. This will need to be considered in the context of the business and the situation, but furthermore, employee appraisals still need to go ahead regardless of whether or not they drive bonuses. The HR teams will need to support this process and help drive their completion.

On the other hand, there are a myriad of decisions which will need to be made between accountants and HR professionals and these are going to be difficult. These may include issues like redundancies, furlough, bonuses and pay rises.

Collaboration is Key

Undoubtedly, there will be disagreements, but CPAs and HR teams need to work and collaborate to understand and resolve these in an effective manner. Decisions and resolving differences of opinions will take time and is harder in a remote environment over video conferencing and phone calls. This process will require patience and a concerted effort from all sides, but ultimately collaborating together on these decisions will be better for the business in the long term.

Other commercial decisions, such as furloughs or layoffs, will also have to be made during this time. This cannot be done without the input of the HR team as they will provide vital insight and need to be part of the ‘journey.’

The human resource team will need to face the employees and manage the communication process between the company and the staff. As CPAs, we must respect the difficult position that HR teams are in right now, so try to be supportive and provide as much information as they need to help their role.These kinds of actions will be repaid in the future.

Accountants will need information for reforecasts and budgets from the HR arm, but most importantly, this needs to be early and clearly communicated. In a remote working scenario, such as many people are finding themselves in, it will take more time than usual to collate the required information and things cannot be pulled together at the last moment.  In short, try and let your counterparts in human resources know this before any potential confrontation further down the line.

Where Security Fits In

Another aspect that the HR function of the business will have to oversee during this period is security. Depending on remote access to servers, it may be necessary to email highly confidential information – protocols such as encryption and passwords will need to be implemented and strictly adhered to. Be aware that this may be an overly stressful time for HR professional when dealing with security so bear with them during this period.

Impact on Payroll

Finally, if you are dealing with an outsourced HR function, it may include payroll. These service providers will themselves be having similar in-house issues and/or may be stretched with the huge number of impacts to HR and payroll to process for their clients. You need to communicate with them as early as possible to confirm continued support and any changes to timetables of providing information to them in order for them to run payrolls and any other services.

Final Thoughts

This is a testing period for both CPAs and HR departments, so ensure you have good communication, are open, and clear, and use this period to learn about different working methods throughout different teams. We are all facing unique challenges, but hopefully this period will kick-start a drive towards more collaborative and conducive working structure for the future.

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