.

UNIVERSITY

OF THE EAST

College of Business Administration

Manila

RESEARCH PROPOSAL

Research Title:
A Comparative Study of the Factors Affecting High Turnover and Decision to Stay in
Public Accounting Firms

Name of Proponents:
Adduru, Allan
Arnaldo, Jonell
Garcia, Diana Rose
Pablo, Ina Marie
Plata, Pia Bianca
Saloritos, Yllaisa John
Santiago, Irish Ann
Year Level and Approximate No. of Students Required to take the Course:
4th year BSA students, section

Address, College or Unit of the Proponents:

College of Business Administration-Manila

Title of Research Course where Study will be Conducted:

Management Consultancy (AC414)

Brief Review of Related Literature
According to article of New Accountant in USA, there is 26% of 50,000
accounting graduates entered public accounting (AICPA 1994). The AICPA study shows
national accounting firms experience high annual employee turnover of about 20%.
RETENTION
Employee retention can be defined as a management initiative through company
policies to create a high degree of employee satisfaction with the ultimate motive of
retaining employees (Dey 2009, p.45). The retention of quality employees is more
important today than ever before (Holtom et al. 2008). It is progressively becoming
a critical component of organisational performance (Dey 2009). Companies that fail
to retain their high-quality employees will be left with a less qualified and
understaffed workforce which will ultimately affect their ability to stay competitive
(Rappaport et al. 2003).
Dey (2009) also notes that employee retention can lead to satisfied employees,
satisfied customers, and improved financial company performance. It is also
important to retain the repository knowledge of employees, particularly as studies
show that it can take three to six months for a new employee to be trained and begin
performing (Dey 2009).
Retention is an essential element of talent management which is
the implementation of integrated strategies or systems designed to increase
workplace for attracting, developing, retaining, and utilizing people with the
required skills and aptitude to meet current and future business needs
(Lockwood, 2006, p. 2).
As employees are accounting firms assets, it is therefore essential for
accounting firms to know how to help retain their key employees to meet their business
needs.Retention strategies and the influences of employee retention
Many academics offer advice on how to retain employees through factors such as
competitive compensation packages (Brundage and Koziel 2010; Pabla 2010; ElRamly
2012), organisational culture (Sheridan 1992; Brundage and Koziel 2010; ElRamly
2012), work-life balance (Musser 2001), mentoring and leadership (Musser 8
2001; Arms 2010; Brundage and Koziel 2010; Driscoll 2012), communication (Arms
2010) and training and opportunities for growth or promotion (Musser 2001; Pabla
2010; El-Ramly 2012). El-Ramly (2012, p.18) identified that career development

ranks as the top attraction factor and No. 2 retention factor for high potentials. He
acknowledged that it is important to set out a career road map with employees as it
can develop leadership and business development skills.
According to Boltax (2011), studies demonstrate that 9 out of 10 managers believe
that employees stay or go because of pay. However, contradicting some academics,
Eaves (2008, p.30) observed that while many organisations use compensation
packages as a key retention tool, a poll carried out among accountant employees in
the UK showed that 75% of respondents felt that they were paid either in line with
or above the average market rate for a similar role yet 73% felt that they did not
see their career path with their current employer indicating little relationship
between retention and the retention tool of compensation. Therefore as advised by
Hausknecht al. (2009), to implement an effective retention strategy, companies must
understand why employees stay.
While there is significant academic literature advising on retention strategies, Musser
(2001) observed that there was a lack of research examining what influences
employees to stay in an organisation. In general, despite the considerable amount of
literature on the causes of employee turnover, there is significantly less known about
the influences of employee retention (Hausknecht al. 2009). Maertz and Campion
(1998, p.65) also observed that
relatively less turnover research has focused specifically on how an
employee decides to remain with an organization and what determines this
attachment retention processes should be studied along with quitting
processes.
This is valuable as the factors that cause people to leave are not always the same as
the factors that cause people to stay (Steel et al. 2002).
Therefore, a significant gap in literature has been observed in relation to retention
and what influences employees to stay in an organisation. To the researchers 9
knowledge, no research has been conducted exploring the factors that influence
accountants in Ireland, particularly newly qualified accountants, to stay in their
organisation. Instead, the academic research focuses on turnover and the factors that
influence accountants to leave their organisation.
2.2. Turnover
Employee turnover is defined as the intention to exit an organization voluntarily
(Nazim, 2008). Academics have noted that turnover can be either functional or
dysfunctional depending on who is leaving the organisation (Campion 1991; Dalton
et al. 1982; Parker et al. 2011). Turnover is considered dysfunctional when high
performing employees leave the organisation as this has negative consequences for
the company (Parker et al. 2011). Accordingly, organisations need to focus their
attention on retaining these employees (Parker et al. 2011) as retaining quality
employees is a key component of organisational performance (Dey 2009).
Turnover within accounting firms is also a considerable and expensive problem

(Snead and Harrell, 1991). Although accounting firms have a much larger ratio of
trainees to qualified senior staff and they expect a certain degree of turnover to make
way for new trainees, excessive turnover is deemed wasteful (Hyndman, 1994),
especially considering the significant amounts invested in the training and
development of accounting employees (Sorensen et al. 1973).

Conceptual / Theoretical Framework

Statement of the Problem
The researchers will conduct a comparative study that focuses on the factors that
affect the high turnover of accountants in public practice which also intends to
determine the grounds for staying in the practice.
Assumptions
1. The respondents are graduates of BS Accountancy and passers of the CPA Board
Examination;
2. And their first job experience is in public practice.
Significance of the Study
Knowledge of these conditions and attitudes as a result of the study could then
be used by CPA firms to improve the effectiveness of their selection procedures and
administrative practices since turnover has been blamed, in part, on an inadequate
selection process (Ellyson & Shaw, 1970). Also, analysis of these factors may be useful
in the active retention efforts of those proven employees the firm wishes to retain. In
addition, the report should be of counseling benefit to those staff accountants who are
currently employed in CPA firms and for those students who are considering a career in
public accounting by indicating a data-based approach to the reasons why staff
accountants decide to leave their initial public accounting employers.
The study can be used by the respondents in assessing the possible factors to
be considered in choosing the right career in accounting that is good enough for their
respective satisfaction that is dependent on their own situations. It may also give
insights to future CPAs in to their curiosity about the best career they can obtain as
accountants.
The study is directly relevant to the researchers as BS Accountancy students to
comply with the requirements of the course. To all accounting students, to obtain

satisfaction of the knowledge related to their future careers and to make them aware of
the possible culture of the workplace that they will be dealing with.
The study will benefit future researchers which they can be used as related
literature that will lead to another comprehensive study that can be used for the
betterment of the profession.
Scope and Limitations
Methodology and No. of Respondents
Expected Output
Work Plan of the Study
PHASE/ACTIVITY

DURATION

1. Approval of Research Study

1 week

2. Construction of Research instrument

1 week

3. Gathering of Data

4 weeks

4. Editing and Encoding of Data

2 weeks

5. Analysis of Data

2 weeks

6. Finalization of Research Output

2 weeks

Date of Submission of the Proposal

January 23, 2015