A&M was retained by a large professional services (audit, tax and advisory) firm that has several hundred partners and thousands of professional and support staff. The firm has offices in major US metropolitan areas and in several foreign countries.
Senior management engaged us to assess the firm’s partner and staff compensation and retirement programs, with the goal of improving the firm’s ability to recruit and retain top partner and staff talent. The firm had difficulty in filling support staff positions, and the compensation structure often was viewed as not competitive in local markets.
With the IAFM giving us a better understanding of the effects of changes to the current compensation and benefit structure, and based on discussions with management and an extensive review, we:
- Proposed a new and more equitable system for allocating firm earnings.
- Benchmarked every position, based on geographic location, competitive norms, and the firm’s business profile. This helped the firm modify its compensation structure to reflect competitive pressures. We also tested for potential discrimination issues based on factors including gender, age, and ethnic background.
- Assessed the financial impact of the firm’s partner retirement plans and proposed changes to make it a more coordinated and effective program. We recommended changes to the funding of the nonqualified benefit plans to make the funding more cost-effective, tax-efficient and secure from firm creditors.
- A method of allocating firm earnings that is fairer and better understood by the partners
- A significant improvement in the firm’s ability to recruit and retain top talent, both at the partner and staff levels
- Better informed partners, who are better served and better protected by the coordinated retirement benefit program now in place
- More efficient funding of partner retirement benefits that reduces the drag on future firm earnings and makes the benefits more secure