How Can Accounting Firms Deal with Resistance to Change?

In an industry requiring constant regulatory changes and digital transformation initiatives, how can your firm overcome resistance to change and make its way into a more resilient future?

Why is there resistance to change?

Seventy percent (70%) of change programs fail because of employee resistance and insufficient management support, according to the management consulting firm McKinsey & Company.

In general, this resistance to change in the workplace often roots in an emotional response. It’s usually triggered by lack of confidence, mistrust, poor communication, fear of failure, unrealistic timelines, and insufficient training and support.

Looking at it from the employee’s perspective, it’s pretty difficult to give up the sense of safety and security. When you get used to doing something, being asked to change your ways can feel threatening. Sticking to comfortable and predictable practices becomes a habit, and habits aren’t easy to give up.

Resistance to change in accountancy

The same applies to the financial sector. Being in a naturally risk-averse industry, most accountants tend to stick to what works — procedures, systems, practices, culture. Why make a change when everything still functions well, anyway?

Yes, this mindset can provide stability to your firm, especially during uncertain times. However, it can also work against the entire organization. As the report from the Institute of Chartered Accountants in England and Wales (ICAEW) describes it, your firm might become “cumbersome and bureaucratic.”

Read Next: Understanding the Regulatory Changes in Accounting 

Without change, the structures, practices, and procedures that make your firm competitive could also be the same things that will hold you back from moving forward. Undergoing finance process transformation  is essential, if not a necessity, to increase process efficiency, minimize risks, and modernize your firm’s approach.

To address these concerns and ensure lower resistance to change, it’s critical to implement an effective change management program — a systematic approach meant to guide and support employees throughout your firm’s transformation journey. 

How to overcome resistance to change in an organization

First things first: coercion is not an effective way to make your employees follow whatever change you’re implementing. 

Sure, it can bring you immediate results, but it won’t last long. It might even result in a failed change management initiative. If this happens, you can expect lower productivity, higher costs, inefficiencies, and higher employee turnover.

The goal is not to eliminate resistance. Someone’s going to resist change no matter how excellent and valuable you think it is.

Rather, think of it this way: resistance, if managed correctly, can even become beneficial to both parties. It lets you determine where you fall short, allowing you to address them the soonest time possible. Your employees, meanwhile, can understand how the change can become useful to their daily practice.

Effectively communicating the change and taking the time to listen to your employees’ grievances will help you clear any doubts surrounding the change.

Aside from this, you can also apply the following recommendations in overcoming your employees’ opposition to change:

Split change into manageable parts

Change takes time, and aggressively changing things guarantees high resistance. To secure support from your staff, implement change in a way they can easily adapt and practice.

Work on your employees’ psychology

When people have already made up their minds or have already developed a habit they consciously or unconsciously practice, changing it can be extremely difficult.

There’s a psychological explanation why people have a strong inclination to pre-existing beliefs and convictions, even when they’re not aligned with facts.

For one, people’s opinions are based on their emotions and group affiliation. If the change you’re introducing is inconsistent with their beliefs, they would rather deny or downplay it than reshape their perspectives to accommodate it.

This is why when introducing change, it’s vital to make them understand the following:

1. what this change means,
2. how it can benefit them, 
3. how it can contribute to your firm’s success, and
4. what will happen if the organization fails to undertake this change. 

Tell a story based on their perspective so it will make sense to them as individuals.

Provide the necessary tools

Some people don’t welcome change not because they don’t want to but because they don’t know how to. Imagine being left in the dark without any source of light. It can be frightening and frustrating. 

For instance, introducing a new accounting software without taking the time to train the staff and letting them adjust to it may only lead to errors and lower productivity. It may even compel them to go back to their old ways of approaching work.

As the American educational theorist David Kolb explains, adults need sufficient time to absorb new information, apply it to real-life situations, integrate it with their existing knowledge, and review their experience.

When initiating change programs, it’s crucial to provide the appropriate instructions, training, and support to employees. This gives them the confidence that they can carry it out successfully.

Take the time to set clear expectations, assess gaps in skills, and provide learning opportunities to fill those gaps.

Assign role models per team

As mentioned above, people tend to follow the opinions of their group. Thus, managers, supervisors, and team leaders must have a clear grasp of why this change is taking place before passing it down to the staff.

People model the behavior of those they admire and respect, so doing this method can be effective for your firm. When they see that those around them are already following new practices, for instance, it won’t take them long to adapt.

Read Also: How Can You Foster Innovation in your Accounting Firm? 

On the other hand, if they see that senior leaders don’t commit to the change, your staff might perceive the change as inessential and therefore not follow it. 

Reinforce change

You can do this by setting measurable goals, giving financial and non-financial incentives, and implementing reporting structures that are aligned with the new behavior.

Too much resistance to change can backfire on your firm. Even your system works today, there’s still the possibility of it getting outdated sometime in the future. There's nothing wrong with sticking to effective processes, but it's still better to explore other possibilities beyond accustomed practices to improve and maximize the existing processes, tools, and skillsets within your organization.

Do you experience a talent shortage in your firm? Aside from recruiting new talents, you can also try outsourcing — for a change. Our accountants at D&V Philippines work with numerous clients from the U.S., the U.K., Australia, and Canada, making them updated with the regulatory changes in these locations.

For more information about our services, contact us today. You may also want to get a free copy of our whitepaper, Finding the Right Talents: D&V Philippines’ Solutions to Modern Accounting Firms, to learn about our bespoke solutions.