Enough already. Stop trying to engage your employees. Firm leaders can’t do anything to “engage” them if they don’t want to or know how to engage themselves. The only thing leaders can do is to create an engaging environment and then equip employees to connect their values and motivational drivers to the firm’s vision and values. This is how to create engaged employees.

Nurturing employee engagement

Every professional aspires to make a meaningful impact through their work. The drive to learn, grow and achieve is the foundation of a fulfilling career. The professionals in your firm, particularly the younger and aspiring workforce, are no different. They seek opportunities to reach their potential, and it’s the firm’s responsibility to provide the resources, experiences and guidance that enable them to thrive.

Employee engagement is a critical indicator of success in this regard. Engaged employees exhibit higher productivity, job satisfaction and retention rates — outcomes well-documented in research. Consequently, many organizations now employ engagement surveys as a standard practice.

Despite this focus, Gallup reports a troubling trend: employee engagement has steadily declined from a peak of 36% in 2020 to 30% in early 2024. This drop has coincided with reduced productivity and increased dissatisfaction, giving rise to concepts like “quiet quitting.”

To address this, leaders must move beyond surface-level initiatives such as expanded benefits or flexible schedules. They must answer a more fundamental question: How can we create sustainable engagement that aligns individual aspirations with organizational goals?

Beyond basic engagement

Engagement is not an incidental outcome — it requires intentional effort. Leaders must align employees’ personal goals with the organization’s vision and values, fostering a dynamic where employees pursue meaningful aspirations while the firm reaps the benefits of their enthusiasm and dedication.

While perks like new titles or remote work options may provide short-term morale boosts, they rarely address the deeper needs that sustain engagement. To make a lasting impact, firms must focus on cultivating a sense of fulfillment in their workforce.

The changing workforce

Supporting today’s workforce presents unique challenges. Traditional development methods often fall short in resonating with younger employees, many of whom were raised in environments that emphasized structured support and consistent encouragement.

Consider an employee like Johnnie. Throughout his upbringing, Johnnie’s success was closely supported — coaches helped him excel in sports, tutors guided him in academics, and extracurricular lessons nurtured his talents. These efforts demonstrated care and reinforced his belief that external support is often necessary for success.

As Johnnie enters the workforce, he brings this expectation with him, asking: Does my firm care enough about my success to provide the same level of support? This is one reason why younger employees tend to be more open to professional training and coaching than previous generations. In fact, forward-thinking firms are responding by incorporating coaching into benefits packages, enhancing their ability to attract and retain top talent.

However, challenges extend beyond providing support expectations. Prolonged screen time has left many younger employees with underdeveloped social skills and shorter attention spans. They may struggle to navigate workplace dynamics effectively or maintain focus on tasks that don’t immediately engage them.

This dual challenge — reliance on structured support and a diminished capacity for sustained attention — complicates efforts to foster engagement. Young employees often expect rapid advancement and recognition; without it, they may quit and leave; or worse, quit and stay.

Teaching self-engagement

While leaders play a critical role in fostering an engaging environment, employees must also learn to engage themselves. Engagement is a shared responsibility: organizations provide opportunities, but employees must take the initiative to leverage them.

Leaders can support this by helping employees uncover their intrinsic drivers. What motivates them? What are their priorities? Too often, employees lack clarity about their own goals, so they default to requests for raises or promotions that fail to address their deeper aspirations.

Designing inspiring career paths

The study of motivation dates back to ancient philosophers like Socrates and Aristotle and continues to evolve today. Modern research highlights four fundamental drives that influence engagement in the workplace. These drivers are universal yet unique to each individual in terms of priority and intensity.

Addressing these drives requires deliberate effort:

1. The drive to learn. Employees seek mastery and growth. They want to build both technical and professional skills.

   • Are managers framing assignments as opportunities for development?
   • Are employees receiving constructive feedback and recognition for their progress?
   • Do they view their work as stepping stones toward their goals?

2. The drive to achieve. Employees need autonomy and meaningful accomplishments that resonate with their personal values.

   • Are employees given ownership of their projects and held accountable for them?
   • Are managers aware of what drives individual employees and helping them align their work accordingly?
   • Is there clarity about what achievement and success look like?

3. The drive to bond. Humans are social beings who thrive on connection. Employees want to feel valued and part of a team.

   • Are managers fostering a culture of collaboration and mutual respect?
   • Do employees feel appreciated by their peers and leaders?
   • Are employees asked about how connected they feel to the team?

4. The drive to pursue purpose: Employees want to align their work with a greater sense of meaning.

   • Are leaders helping employees connect their work to the organization’s mission and vision?
   • Are employees able to see how their work contributes to their personal and professional purpose?
   • Do they believe they are a part of something larger and more meaningful that makes a difference?

A framework for sustained engagement

To equip employees to self-engage, firms should adopt different strategies:

1. Individual awareness
   Help employees understand the four motivational drives and identify their unique priorities. Guide them to see the connections between who they are and their aspirations with the opportunities the firm provides them.

2. Supportive environment
   Create a workplace culture that encourages employees to pursue and satisfy their drivers.

   • Leaders frequently discuss motivation and engagement in firmwide communications.
   • Managers know how to actively support their teams with guidance, feedback and encouragement.

3. Regular check-ins
   Encourage employees to monitor their satisfaction with their motivational drivers and discuss adjustments with their managers.

   • Assess their current state of fulfillment in these drivers.
   • Monitor progress and movement over time.
   • React and intervene early when there are signs of disengagement.

This is a different way of conducting check-ins and reviews because the focus is on employees’ responsibility to engage themselves. The firm is ready to guide and support them in their pursuits, rather than attempting to persuade employees to conform solely to the firm’s goals and expectations. It requires a rewiring of thinking, leading and managing, but will provide a culture of engagement.

By creating an environment that nurtures these drivers and empowers employees to activate them, firms can cultivate a self-engaged workforce. Employees who are intrinsically motivated will positively impact productivity, morale and retention, contributing to a culture of lasting engagement where both individuals and organizations thrive.

The American Institute of CPAs has published a new guide with information on best practices for the accounting and valuation of business combinations such as mergers and acquisitions.

The AICPA’s Accounting and Valuation Guide: Business Combinations is designed for valuation specialists, preparers of financial statements and independent auditors. It includes detailed advice on the best practices for accounting and valuations of business combinations in accordance with Financial Accounting Standards Board standards such as ASC 805 and 820. The guide provides advice on identifying business combination transactions and whether the acquired set meets the definition of a business or is a collection of assets.

Other topics include identifying the acquirer, measuring the consideration transferred, recognizing and measuring the identifiable assets acquired and liabilities assumed, and any noncontrolling interests in the acquiree, along with recognizing and measuring goodwill or a gain from a bargain purchase.

The guide also discusses other relevant valuation issues that have emerged over the years, offering guidance for the assessment of prospective financial information, discount rate, and transaction operating value of the acquiree, addressing valuation approaches and methods along with their application to a variety of assets acquired and liabilities assumed. It explains the valuation method selection process for acquired intangible assets and addresses why certain methods — especially the interaction between those methods and the inputs for them — are appropriate given their attributes.

The guide includes some illustrative examples demonstrating, for example, the internal rate of return analyses, the valuation method selection process, and the application of valuation methods most generally used in practice to value a specific asset or liability.

The Internal Revenue Service and the Treasury Department released the final rules for an Investment Tax Credit for clean energy project developers.

The ITC under Section 48 of the Tax Code provides a tax credit for investments in qualifying clean energy property, typically 30% of the cost of the project. The level of the credit can has traditionally varied over time and by technology, leading to uncertainty for energy project developers about how long they could rely on the tax credits being available to them. 

The Inflation Reduction Act extended the ITC, along with the closely related Production Tax Credit, until 2025, at which point the ITC and PTC will switch to a tech-neutral approach with credits that will be available in full for projects beginning construction at least through 2033.

“By ending short-term legislative extensions for the Investment Tax Credit, the Inflation Reduction Act has given clean energy project developers clarity and certainty to undertake major investments and produce new clean power to meet growing electricity demand,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo in a statement last week. “Today’s announcement will help lower consumers’ utility bills, strengthen U.S. energy security, and create good-paying jobs.”

The final rules retain the core framework of the proposed rules and guidance that the Treasury and the IRS issued in November 2023, but the final rules clarify some of the general rules for the ITC and its definitions of property that’s eligible for the credit, after the Treasury and the IRS received 350 written comments on the proposed rules. Some of the issues raised by commenters that the final rules address involve offshore wind, geothermal heat pumps, biogas, co-located energy storage and hydrogen storage facilities. The final rules retain the clarification made in the proposed rules that owners of offshore wind farms can claim the credit for power conditioning and transfer equipment (e.g., subsea cables) that they own. They also clarify that the owner of underground coils for geothermal heat pumps can claim the ITC if they own at least one heat pump used in conjunction with the coils. They clarify what property is qualified biogas property and what is an integral part of qualified biogas property.

The final rules revise the definition of energy project to require ownership of the energy properties plus four or more factors from a list of seven factors and clarify that taxpayers can assess the factors at any point during construction or during the taxable year energy properties are placed in service.

They clarify that a Section 48 credit may be claimed for energy storage technology that is co-located with and shares power conditioning equipment with a qualified facility for which a section 45 credit is claimed. They also clarify that hydrogen energy storage property doesn’t need to store hydrogen that’s only used as energy and not for other purposes.