With Giles Pearson
Episode 130 of The Unique CPA features Giles Pearson, the co-founder and CEO of Accountests, who talks to Randy about his background in public accounting and how his 18 years as a partner at a large firm. This inspired him to create Accountests to help firms make more informed hiring decisions. He discusses the various technical skills and personality tests Accountests offers and how they can help firms hire the right candidates faster, improve onboarding, and reduce costly turnover. Giles also talks about how the tests benefit candidates by identifying strengths and areas for growth. This insightful conversation provides practical advice on leveraging data and science to hire better and help accounting professionals reach their full potential.
Today, our guest is Giles Pearson. Giles and I, oh boy, met quite a while ago—we’ve been trying to get this scheduled for a while. It’s probably seven months ago, we first talked to each other, and it was probably two months before that, that I was unintentionally ignoring his email. So I apologize to that too for him in the past, but Giles, he’s the co founder and CEO of Accountests, which we’ll talk about what that is today. And he started this business after 18 years as a partner with a large accounting firm and really got frustrated with how much uncertainty there was when he was out hiring individuals. So trying to figure out a way to solve that problem, which is an expensive problem that we all run into. So, Giles, I’m butchering what you guys do, so before I go any further, welcome to The Unique CPA.
Hi, Randy. It’s nice to be here. And good things take time.
Exactly. We’ve just let this marinate for a while—you and I’ve talked quite a bit, we’ve run into each other at conferences, we even tried to do this, we thought, at a couple of conferences, but it just never happened. So I’m glad we’re doing it today.
Yeah, we’re here.
There you go. So like I said, I was butchering probably what Accountest is. Why don’t you give us once you give us a little history of you, because you’re not just starting this thing out of nowhere. You’ve been in the profession for a while. Give us that and then tell us about Accountest as well.
Yeah, well, I guess my introduction to accounting was, it’s a very classic introduction. So, went to college, came back to my hometown, started with Coopers and Lybrand, as it was in those days, small town office, sort of 30 people, just did the classic thing did my did my three years practical to become a chartered accountant, as you do here in New Zealand, went overseas for four years as all Kiwis do to get their overseas experience. Came back and, you know, started back in Coopers and Lybrand to a couple of years later, I was a partner at age 31. And we became Price Waterhouse Coopers so I was actually the first Price Waterhouse Coopers partner in the world because 1 July 1998 was the was the day Price Waterhouse and Coopers and Lybrand merged. I was the, with the timezones as they are, we were the first.
So there was two of us new partners on 1 July 1998.
18 years as a partner with was what was PwC still small town office, we got to about 40, 45 people doing private client work and tax—that was my gig. But, you know, we all know what the big firms are like, even in a small regional town, the workloads, you know, nothing stops. And I always said, well, after I’d been there for maybe 10 years, I could already see that the horizon was coming up, and it was like, I just don’t want to be here at 55, 60. So I made the decision that when the kids left high school that I would finish and go and do some other stuff. Planned for the other stuff was more around hiking and running, of which I did quite a lot, I’d have to say after I finished in 2016. So I beat my son by six months, he still had six months at the high school when I finished.
But you know, I guess during that time, we did, as you say, hire a bunch of people who didn’t necessarily work out and we were looking for some technical skills tests to test them on and sort of scoured the market and found nothing that we thought was of a professional quality that we would want to put in front of a candidate. So there was a little sort of side gig that I came up with, that I thought I’ll let can keep my brain busy when I’m you know, out on the trail or, or whatever. And so that was, it was a very, very, very slow build, which we started in New Zealand, just focusing on technical skills tests. We proved the concept, I guess, took that to Australia, took it to the UK, then developed the world’s only personality profile specifically for accountants. And then we sort of brought that to the US in early 2022, which was a huge amount of work actually to reconfigure everything to make it right for the US market.
So it’s been a journey. I’d have to say I’m probably working hours now that was not rivaling what I did at PwC but it’s up there and certainly a lot of early mornings, like this morning. So but it’s fun and it’s way different doing things for yourself. And I really, I think what it’s shown me is the that sort of entrepreneurial spirit that you struggle with in an accounting firm, and particularly in a big firm, when it’s all about the metrics. And so I’m loving that journey, but I’m loving, still being in the sphere of accounting, and I think the collegiality of the profession is amazing. So I’m really enjoying still being part of that even sort of at the, at the edges, if you like.
Yeah, you and I are probably similar from that standpoint, you know. I get to stay part of this community, of accounting professionals, accounting friends, but I don’t really do much of the work, I just go out and talk and educate. And and it’s nice to stay in that community, because the people are so awesome. And I think the things that you’re doing are going to help the people—that’s important. And I think you and I both have a passion for that, how can we help this profession be better, and through your testing, you’re looking to do that, and, you know, through things that, you know, just for me talking to people like you, I’m hoping to do that as well. So I think we’ve got the same ends in mind.
And one more thing, I’m just gonna compare us right now all the time. Your passion, you know, it’s a, you have a passion for what you’re doing, even though you’re putting in more hours than you planned, it’s more of a passion project that sounds like to you than sitting and pumping out tax returns, I’m assuming.
Oh look, you know, I think we probably all get to that point where you’ve been in the profession to the point where, you know, another year rolls around and you go, really, I’m not sure that I—I don’t have the enthusiasm for that anymore. And there’s always things that do get exciting. And a client does something interesting, or you know, wants to sell something or acquire something or, you know, there’s a particular project, but you know, the routine work, even of the advisory work, I think it just, it does tire after a while, and you need something to reinvigorate yourself. And that certainly, Accountests has certainly done that for me.
Yep, and just saying, you don’t have to leave the profession to find those passions. But the fact that you did I think is great as well, you didn’t leave the profession, we’re still a part of it just left the straight accounting firm.
Let me talk about these tests themselves, then I mean, it we don’t it’s not one test sitting out there, and hey, this has worked for everybody. What are the tests? I’m sure they’re probably too numerous to measure. But what are you trying to? You know, maybe give us a couple of specifics. And what are you trying to measure with these tests? And what are you trying to help the firms with, with these tests as well?
Yeah, well, I guess one of the things that we saw when we went out to look for some tests for us when I was at PwC, is a lot of the tests were just one size fits all. And that was part of the challenge was to develop a matrix of tests that firms can use at different levels, and in different specialties, you know. So we went out and have developed tests for staff accountants, CPAs in public accounting, auditing, bookkeeping, virtual CFO, virtual controller, and some sort of simple double entry accounting, debits and credits sort of things. So it’s about trying to create tests that will be good enough for a firm at any position. And it’s, you know, people always say, oh, have you got to test for this? Have you got to test for that? And it’s like, well, you know, you just can’t have a test for everything. And you know, this is a journey. So we’re trying to move to the point where we do have more options, and people can modularize what they do, so it is more specific. And so we’re doing what we can.
But you know, I think for the for the firm’s at the moment, what we’re trying to do is, instead of maybe, you know, you ask two or three questions that interview that, here’s the questions I always ask, or here’s a little case study, but I give it to everybody, because, you know, whether they’re a junior or a senior, you know, some of those case studies are pretty good—challenging to do remote. And I think that’s that a lot of firms, you know, the whole hiring process is often now remote. So that adds more complexity. But what we’re really trying to do is say, hey, in half an hour, you can get 40 data points on some technical knowledge. So if we’re looking at the skills test, 40 data points on, what does your candidate know on a whole range of issues, but within the sphere of the job that you’re looking at. So if it’s a staff accountant, you know, you’re looking at that more compliance, accounting areas. And so you get to get a feeling, I guess, over 40 questions, whereabouts in the ballpark are they? Are they sort of at the bottom? Are they in the middle? Are they a staff performer? And all of that really helps you to make a fast decision. And, you know, one of the strap lines that we use, I guess is “Hire Fast with Confidence.”
And I think that’s really what it’s about. It’s like, you’ve got to move fast, especially if you find somebody who’s a good performer. But you’re doing it with the knowledge that you’ve actually, you know, got the data, you got the science data to back up that quick decision.
Yep. And so the test that we were just talking about, you’re measuring or you’re testing the technical skills that they have, to meet whatever job role you’re looking to, you mentioned earlier that there’s the personality profile test for accountants. Where does that come into play? And what do you look for with that?
So I guess what we were, what we were trying to do was, was get something that was a bit more useful to the accounting profession. And you know, there’s some really good personality profiles out there. And I don’t know how familiar you are or the people listening are with the Big Five concept, but a Big Five personality profile are the ones with proper science. So you have to ask a lot of questions. So compare that to say a Myers Briggs test, which there is no science in Myers Briggs, it doesn’t ask enough questions, you know. If you look on their online stuff that they’ve got is, it says do not use this test for hiring, it’s not appropriate for that. It’s good for team building and team understanding, but there is no science. So I guess one of the things was we wanted to have a test that was a Big Five, and that covers the sort of Big Five areas of personality, which we could go into, but perhaps another day.
But we took a study out of the UK, which looked at what do you need to be successful modern accountant. And we used the criteria that they came up with to design our own personality profile, more focused on things that accountants are interested in, should be interested in. Things like ethics and communication, relationships, attention to detail. And then we built the test, but then we built a report that was specifically for public accounting firms, as opposed to generalists. So, “Here’s some interview questions based on the profile that you might want to ask your candidate for things which, if you like, showed us outliers on the on the profile.” And we we put 317 CPA level accountants through it before we started. So when you get the report, you get to see how your candidate looks against a whole lot of other accountants. So it’s a it’s a like with like comparison, and then you get the interview questions, and then you get a personal development plan, based on the profile, if you hire this person, here’s some things you might want to put in their personal development plan, you can start working on that on day one, you know, not on day 90 or day 180, when you’ve when you’ve sort of got to know them a bit better.
Yeah. So does this then help with the onboarding process as well, if you have this knowledge already, because onboarding for all I’m hearing lately, is this, how important the onboarding is, and how lax we are with that sometimes, and so I assume this is going to aid in that?
I think both the skills and personality is good for that. And, you know, when people say to us, oh, what, why, you know, how can I get a candidate to do a test? And candidates say, why would I want to do a test when, you know, this is a tight market, you know, I can go get a job down the road. And look, you know, clearly from an employer’s point of view, you’re trying to make sure that this person is going to fit with you. But I think that the other part of it is, let’s find out how we can go on a journey together—both the firm and the candidate—and really get their career moving as quickly as possible. And the testing will show, for example, where their weaknesses are, or you know, what they need to do to get to the level that the employer is really looking for. So let’s have an upfront discussion on day one about, you know, what training am I going to give you, what mentoring you know, who’s going to be your buddy in the office, so that we, you know, supercharge that growth for the candidate individually.
And the personality’s the same. It’s about, well, you know, we can have a plan. Yeah sure, based on the profile, which, you know, the science is there, it should be good, but clearly, we don’t know each other yet. But we can have a plan to get started with, straight away. And, you know, again, that’s about how do we get that personal growth story for the candidate. So I think it’s a, you know, employers who take this on and think about it in a more holistic view, can take that candidate on a much, much better journey and that onboarding piece can be, you know, much more respectful. And the reality is—sorry, talking away here!
No, you’re good.
But the reality is, employers are having to take on candidates who are not really as good as they want them to be quite often.
You know, employers can’t be too picky. So so when you’re taking on somebody where the testing is saying to you hey, this person is is not really there, you can have an upfront discussion with the candidate about, hey, you know, here’s the testing can show you how you did, our expectation was, you know, better than that, but hey, we’ll go on a journey with you. And the benefit of the onboarding stage is, you know, the rest of the office or certainly the buddy and the manager will know where this person is coming in at the won’t be that sort of grinding, feeling it sort of 30 days and 60 days that this person is not performing at the level that we expected, because we don’t have that expectation.
And so we get past all of that sort of negative vibe, and go straight into a positive, how do we make this better? We’re going to invest in you, you know, perhaps there’s a discussion there somewhere about that, from the candidate’s point of view that they need to invest themselves, either in time or in relation to their starting salary.
Yep. I like that, that. I mean, I think you’d kind of mentioned before, you know, as an employee, why I don’t want to take this test, I think I assume you have some data around this and all that, but just showing that, you know, these candidates will be more you will be if we hire you, and we know the level you’re at, we can help you and you’re going to be more successful down the road, we’re going to be more successful on the hiring, because the expectations coming in, we’re all going to be on the same page. We know where the starting point is.
And I think that’s huge, because sometimes, and I’ve seen this, you bring someone in, it’s like, well, they don’t know what we thought they knew. Well, now they tested, we do what they do know what we thought they knew. And we there, they don’t know what the things that we assumed they would know, because we tested ahead of time, that I think would just help the success of retention, because everybody’s starting at the same spot. And part of this whole thing is, you know, if you have a bad hire, the cost of that is what I think I’ve seen you say, other people say, anywhere from 50 to 200% of that salary to replace them. So if we are set with our expectations up front, I assume that retention is going to just be that much better.
Oh, that’s exactly right. And the reality is, and you know, look, you all know this from your time and practice as well. To be fair, the money is annoying, but actually what really upsets you, as the firm owner is the stress on your time, because none of us went into becoming a firm owner to manage staff issues. Well, certainly, in my case, it was to help clients and you know, enjoy the the accounting road.
And so that was always, you know, the biggest negative. And the next one is probably the team morale, you know, and certainly I saw it, we were not good at this. Firms generally don’t manage poor performance well, because they don’t manage it quickly enough. And they’ve suffered poor performance. And the teams sits there looking at you, the owner going, why are you letting this happen? You this person clearly is not up to what we were all expecting. And you’re just you don’t want to deal with it.
So yes, bad hiring has got a big financial cost, and it’s got other emotional costs. And you know, look, nothing in the world is going to give you 100% solution, because people are people, and they will not always, you know, you won’t always get it right. But it’s about that correlation between running a good process and the outcome. And, you know, us as accountants, we know all this, you know? We use our technical knowledge, and our business acumen that we learned through talking to other clients, and from the studies that we’ve done, the experience we’ve got to help business owners make better decisions, because and they won’t always be the right decisions. But there’ll be hopefully better decisions, and there’ll be data driven decisions. And if we didn’t bring that knowledge and experience to the party, why would the business owners talk to us? They might as well just sort of lean over the fence and ask the neighbor. So it’s the same when you’re hiring somebody—if you’re using the data, you’re using experience, you’re running a good process, the chances of you getting the outcome that you expect is that much higher. And that’s all we’re trying to do. It’s not, you know, it’s not rocket science.
I like that actually. You got me sidetracked! I was gonna come with a joke for “it’s not rocket science,” but I’m like, alright, we’re gonna move on.
But so one thing, because sometimes people think this is what I was thinking that sometimes they think that this is almost Life and Death stuff that we’re dealing with in accounting and that it is rocket science or neurology or something like that, hey, it’s accounting, it’s important, but it’s not the end of the world if we make a mistake, and let’s help people get past those mistakes by knowing their skills going in.
Alright, now, one of the biggest issues we have and it comes up everywhere we are you and I see it all the time we talk about all the time as a professional is just the shortage of candidates. So how do we get over the, what you already mentioned, as a candidate, why do I want to do this and we kind of explained that, right? Data, it’s going to help your success and your career. But is this going to somehow help me as a hiring person, you know, hiring individuals to, I guess, maybe less turnover if I hire the right people, I know the expectations going in. But this is somehow going to help me with this shortage of candidates out there in my firm? Because that’s gonna be the one of the biggest things people are going to ask about.
Yeah, look, and we can’t solve the shortage. You know, to be honest, we are focusing on testing for people with some experience, and the profession is having to look to people with no experience. For example, the personality profile that we’ve done will be fine for that. But clearly, the skills testing isn’t going to help you with that. But, you know, look, I think what the testing does from the firm’s perspective is, and I go back to the strap line, “Hire Fast with Confidence,” and you know, speed, to get an offer in front of a candidate a week or two weeks before your competition, that puts you in a really good stead to be able to then, you know, negotiate and get that candidate on board quickly. And you’re able to short circuit the hiring process by being able to use some more data and get that decision made quickly. So, you know, that’s going to help you.
I think, you know, remote hiring has made everything more complicated. It is hard to get a sense of somebody, when the only time you ever see them is on the other side of the screen. And, again, the testing is giving you I guess more evidence about that person. Firms are having to look certainly well beyond the local community to find that talent, and, you know, that’s where the testing can help you understand that person more because it’s, you know, it is tough. You are looking for the combination of those things, it’s not just skills, you want the ability for them to work in your team, part of what we look at is, you know, people’s capability to work remotely. So that’s one of the things that comes through in the reporting, so you get a sense of, you know, how’s this person gonna work out?
Yep. And you’ve mentioned this earlier, and I think it’s so important is, you know, the, I think you put it something like, “well, we weren’t always concerned with”—not you as Accountests, but the industry, “with the morale going on. It’s more or less, just get the work done.” And that’s why I like the fact that you’ve got the technical skills, which, you know, technical skills are great, and obviously important, but it’s not the sole factor in determining someone’s hiring success. And that’s why that personality test I think, is so important as well, because, you know, if you know, the personality, you know their skills, they know where they fit in the company, we know we have a good culture, we want to make sure they fit into that culture, I think all that probably comes into play. And culture is another passionate aspect for me.
So if you were to like put this whole thing together, put a bow on top of everything we just discussed, obviously, money saving, time saving, getting the right candidate, but you know, give us the recap of the importance of doing this testing.
You know, as accountants, we are great with process. And, you know, you think of things like audit, certainly in my day, when I started an audit, it was all about the checklist. And you know, you worked your way through there, and if you ticked the boxes and thought about everything you got to the right answer. It’s really all we’re doing with hiring is, you know, and we know that smaller firms, in particular, medium sized firms, they don’t hire very often, and they don’t hire very well. And what we’re trying to do is provide the tools to allow firms to hire better, hire faster, and hire with confidence.
Yeah, well, I think it’s great anything we can do to, to help the profession to help people get in the right seat, which I think this does, is extremely important. Before we wrap up here today, you mentioned it earlier, some of the things that I’m going to ask, but you know, besides this Accountests, and being out and promoting it and developing it, whether you’re outside of work passions, which you know, we’re going to do a personality test on you now. What’s your outside of work passions, and I heard hiking and running earlier, but want to give us a few things you enjoy doing when you’re not working?
Well, I’m an ultra distance runner. So I’ve done a couple of hundred mile events.
I have run all the, what they call the Great Walks in New Zealand, so they are up to sort of 50, 60 miles through the wilderness. I’ve done quite a bit of hiking, so I’ve hiked the Te Araroa which means “the long pathway” in Maori, and it is the length of New Zealand. So that’s 3,000 kilometers, most of it through the wilderness. I’ve done 5 or 600 miles on the Pacific Coast Trail, which is one of the things that I really, really want to come back to the US and finish that at some point or actually just the whole thing. So hiking is a big passion of mine.
And, you know, I’ve been the chair of our local community foundation. So I think, you know, in the US you’re very familiar with the concept of community foundations, and so that takes up quite a bit of my time. But from an accounting sense, it’s a really, it’s a valuable experience watching something grow and grow and grow. And it’s, yeah, it’s an amazing experience and something that is really cool to be part of. So yeah, those are a few things that keep me busy.
I want to see your personality test that, why, how, this hundred mile race!
There’s some very dark places during a hundred mile race.
I’m going to assume so!
In more ways than one.
I am truly impressed though. I couldn’t even imagine even considering that. So kudos to you for that. And I did see one time, oh, was it last January or sometime in the spring or last winter, you were out hiking in Arizona with Blake Oliver. Is that right?
Yeah, that’s right. Yeah, we went and hiked up to the top of somewhere called Sunrise Peak. We were there for sunset, which was ironic, but that was amazing. So yeah, certainly planning a few more hikes with Blake, that’s for sure.
Yeah, well, Blake and I have that in the works right now. We’re going to be doing that in a few months. I’m going to head out to Arizona, and we’re gonna do a few hikes together probably up in Sedona, and kind of maybe more in the Scottsdale area as well. So we’ll see. It should be fun.
Well, I’m in the US for a lot of next year. So yeah, hit me up.
Alright. Well, we’re gonna have to plan something then. Alright. Well, Giles. I’m glad we got this done. We officially recorded now, which is great. It was a great conversation. If anybody wants to find out more about Accountests or about you personally, where would they look?
LinkedIn is best place to find me. So yep, Giles Pearson at LinkedIn.
Alright. And then before we end, you did send me an email with a landing page for the podcast on your website. So I want to let everybody know, and we’ll put this in the show notes as well. But I want everybody to know that there’s going to be a website, accountests.com/pages/tri-merit. There’ll be more information about what you’re doing. But there’s going to be a discount code on there, too, if anybody wants to investigate Accounttests that will be out there. And I’m sure it won’t be in unlimited time. But once people, once this is released, there’ll be a point in time where people go in and give everything a test run with a discount too, so we appreciate that.
Thanks, Randy. And that’s been awesome.
About the Guest
Giles Pearson is the co-founder and CEO of Accountests. After 18 years as a private business partner at PwC, he was frustrated with the lack of certainty when hiring accountants. He was faced with such questions as, does a potential recruit actually possess the necessary technical accounting skills to perform their role? Too many times when working with clients, he saw the costly, time consuming and confidence-eroding impact of that gap between anticipated and actual ability of the accountants and bookkeepers employed. Through Accountests, Giles has developed a set of tests to verify technical accounting skill levels for a variety of different roles. Accountests would appear to be the only global provider of aptitude tests made by accounting experts, for accountants.
A New Zealand native, Giles serves as a volunteer chairperson for the Hawke’s Bay Community Foundation, and he coordinates the Hawke’s Bay Wilding Pine Volunteer Group.
Meet the Host
Randy Crabtree, CPA
Randy Crabtree, co-founder and partner of Tri-Merit Specialty Tax Professionals, is a widely followed author, lecturer and podcast host for the accounting profession.
Since 2019, he has hosted the bi-weekly “The Unique CPA,” podcast, which ranks among the world’s 5% most popular programs (Source: Listen Score). You can find articles from Randy in Accounting Today’s Voices column, the AICPA Tax Adviser (Tax-saving opportunities for the housing and construction industries) and he is a regular presenter at conferences and virtual training events hosted by CPAmerica, Prime Global, Leading Edge Alliance (LEA), Allinial Global and several state CPA societies. Crabtree also provides continuing professional education to top 100 CPA firms across the country.
Schaumberg, Illinois-based Tri-Merit is a niche professional services firm that specializes in helping CPAs and their clients benefit from R&D tax credits, cost segregation, the energy efficient commercial buildings deduction (179D), the energy efficient home credit (45L) and the employee retention credit (ERC).
Prior to joining Tri-Merit, Crabtree was managing partner of a CPA firm in the greater Chicago area. He has more than 30 years of public accounting and tax consulting experience in a wide variety of industries, and has worked closely with top executives to help them optimize their tax planning strategies.