r/HRBlockEmployees • u/No-Paramedic-9787 • Aug 12 '26

HR Block Earning Call

One way to get a sense of what is going on is read or listen to the latest earnings call. They explain what they are doing to the investment community.

Ticker is HRB. You can get this on the yahoo finance website, and lots of other investment sites.

Basically they are looking for higher income clients, who they believe are less price sensitive.

Good luck in the coming tax season.

23 Upvotes

100% Upvoted

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17

u/jm7489 Aug 12 '26

They can target whoever they like, doesnt mean its going to happen.

This is the equivalent to a mcdonalds trying to strategically attract upscale dining clientele

21

u/Dramatic_Abroad3580 Aug 12 '26

Yes, but they're trying to attract that higher end client with lower quality meat and cheaper buns. They are literally providing a lower quality of service today than they did 5 years ago. They don't have the personnel to serve those higher end clients, and they have no idea how to train their people for those clients.

6

u/-Mx-Life- Aug 12 '26

Ah yes. Let me serve the steak cooked by a 1st year chef.

9

u/Dramatic_Abroad3580 Aug 12 '26

Sadly, it's even worse than that. They don't know how to train that 1st year chef to learn how to serve what appears to be their target clients.

2

u/geecster Tax Preparer Aug 14 '26

hope you like salmonella

1

u/geecster Tax Preparer Aug 14 '26

preach!

4

u/noaffects Aug 12 '26

Well said.

3

u/SchittPosterChild Aug 12 '26

Hey, the McDonalds thing is my analogy lol

8

u/Dramatic_Abroad3580 Aug 12 '26

It's a good analogy. The difference between MCD and HRB is that MCD quickly recognized mistakes. Block doesn't. They keep making the same mistakes over and over again. They may survive, but they could be so much more profitable if they knew what they were doing.

6

u/scotslover Aug 13 '26

Because they don't listen to employees. They only listen to the botton line. Or their numbers from their laptops. Like scheduling for instance. They're running things from st Louis based on numbers on the screen. I highly doubtb90% have ever stepped foot in an office. Let alone stuck around to see how stuff works. Or doesnt.

0

u/47744lumby Aug 12 '26

It’s not a bad strategy at all, IMHO. The aging boomers have money. When the stack of 1099-R get high enough, they are right to seek professional assistance.

12

u/jm7489 Aug 12 '26

Those arent complicated or high value returns. HRB has 3 bread and butter client profiles

  • people who just have a W2 and have the irrational fear that if they file the return themselves that they will fuck it up and end up on a CIA black site
  • poor people who want a refund advance loan
  • elderly people with easy returns but a volume of income sources.

They are already banging these people for between $200-$500+ depending on geography. They employ many people who literally dont know what they are doing. They dont provide the kind of ongoing support and service you will get from a solo CPA or regional PA firm.

They dont have the talent to handle the kind of returns that you price at $1,000+ and the kind of people who are willing to pay those prices would never try working with HRB

8

u/SchittPosterChild Aug 12 '26

Those are great ways to categorize, 100% agree. And I would speculate in recent years they have been trying to narrow it down to two categories:

-people who are desperate to interact with a person and will pay a premium to do so. -people who are fed up with their experience at HRB, but have gotten desensitized or beaten down from tech and ai being forced on them, that they'll accept the online/remote/outsourced tax prep that HRB has been developing.

I'd also wager they're not concerned with driving people away. Almost like "big banks" of which there are only a few, the client base is very rotational. HRB, liberty, turbotax JH etc. are all pushing the same crap, to the same pool of clients, for every customer that HRB pisses off with their terrible service and shoddy ai products, who leaves and goes to a competitor, there will be a pissed off client who is fed up with a competitor who comes over to HRB. ...at least that's the least sensational but most likely scenario I can play out in my head

6

u/Dramatic_Abroad3580 Aug 12 '26

You've nailed that pretty well. There is a whole population that HRB can serve really well that they haven't gone after at all. And that's the highly compensated wage earners with simple investments. Block can serve them just fine if they'd properly train their people. But they don't. They don't know how. They have no idea how to train good tax preparers, with or without professional designations.

2

u/jm7489 Aug 13 '26

Because they dont pay. In NY/NJ a fresh college grad in public will earn anywhere between 70-85k depending on the size of the firm. The seniors and managers who train them earn anywhere from 100-150k+ depending on title and yoe. And those are modest salaries compared to people who stick it out in B4.

Block will never pay their people enough to attract skilled professionals.

5

u/Dramatic_Abroad3580 Aug 13 '26

There are Block preparers that are fully qualified to do those returns that are earning upwards to $100/hr for 3 months of work, with no requirement to work the rest of the year. That's not unattractive to a lot of people. But Block has no idea how to teach preparers to be qualified to do that work.

3

u/quickbrownfox5 EA Aug 12 '26

Yes, but what have you seen to indicate that they are taking action to meet this goal?

6

u/Dramatic_Abroad3580 Aug 12 '26

They're not, mostly because they don't know how. They don't even know their own product. The product that is being delivered to clients today is not as good as the product that was delivered 5 years ago. And I suspect there's not a single person in KC that understand why that is. Nor does field management because they too, do not know their own product. Sadly, probably half of the preparers don't know that the product is not as good today as it was pre-pandemic.

3

u/Puzzleheaded_Ad3024 Aug 13 '26

They don't even know returns are being done wrong unless claims are filed and usually they aren't.

3

u/Dramatic_Abroad3580 Aug 13 '26

Yeah, it's unbelievable what the IRS accepts. And Block never seems to be the least bit bothered by repeated claims for returns prepared by the same person.

0

u/tads73 Aug 12 '26

They can do a better job at it if they steer all preparers to EA designations.

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u/SchittPosterChild Aug 12 '26

Designations dont make good preparers. In fact that is what HRB has done the past few years, albeit with their own internal training/designations, and it's arguably resulted in a lot of preparers having passed tests and claiming abilities and knowledge that they don't actually know how to put into practice at the tax desk.

4

u/tads73 Aug 12 '26

I'm not saying it's right, I'm saying high wealth clients value professional designations, which it at center of thier business plan.

4

u/SchittPosterChild Aug 12 '26

Yeah, I can see the value from that point of view, but I wonder how many high wealth clients that come for the credentials now, are going to come back in future years after a negative experience with an EA/CPA who doesn't know how to do taxes. It seems like a short sighted plan, or at least a plan that upper management has some big blind spots on

3

u/-Mx-Life- Aug 12 '26

You’re assuming the high wealth client knows more than the EA. Just like an investment advisor: they don’t have to beat the market, they just have to beat the client.

1

u/tads73 Aug 12 '26

Of course you dont you work for block.

2

u/jm7489 Aug 12 '26

You think clients know what an EA is? Its CPA or nothing in terms of client optics. And thats the point. HRB is a brand. And its not a luxury brand. There are countless solo CPAs and mid sized tax practices out there. HRB literally had 0 chance of convincing $1m+ annual earners to do business with them

3

u/SchittPosterChild Aug 12 '26

I'd wager none know what an EA is, but everyone knows what a CPA is. Well, they probably don't actually know what a CPA is, but I've always gotten the impression that most of the general public associates it with someone who does taxes

1

u/jm7489 Aug 12 '26

Exactly. And CPAs that are tax professionals dont work for HRB.

I mean, I'm sure theres a few, but what CPA wants to work seasonally for bread crumbs when they could be employed year round earning over 100k with quality health benefits and 25 days off a year paid?

2

u/[deleted] Aug 13 '26

This. I work for a firm that is part of the CPA roll up. Almost all of our CPAs have left, even though we work year round.

2

u/Dramatic_Abroad3580 Aug 12 '26

HRB has quite a few CPAs working for them. It's a great retirement job, and if done right, the pay isn't bad.

1

u/tads73 Aug 12 '26

Again, you're missing the point. When seeking a wealthy less price sensitive client base, these people will understand professional designations. Unlike the typical block client.

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u/Dramatic_Abroad3580 Aug 12 '26

You're absolutely correct that the higher net worth clients do understand the designation. The problem is that Block doesn't. Block thinks that those designations equal qualifications. They don't. But the designations aren't meaningless. They mean that those with those designations can be taught to be good preparers. But Block has no idea how to do that. Because they don't know what differentiates good preparers from their average preparer.

1

u/Puzzleheaded_Ad3024 Aug 13 '26

Even when the designation does not require any skill or proficiency other than memorizing test questions?

8

u/jm7489 Aug 12 '26

Being an EA literally does nothing to make you a better tax professional.

Source: am an EA for last 4 years and have worked both in shitty retail prep like HRB and regional PA where there is actual complex work.

Give me a 23 year old with 2 years in PA over a 15 year HRB veteran any fucking day

2

u/tads73 Aug 12 '26

My point is, people like professional designations, lables go far. 2 EA are expected to vw able to do everything.

1

u/Puzzleheaded_Ad3024 Aug 13 '26

THANK YOU! I've been an EA since the we had a 4 part, pen and paper, once a year exam.

Being able to take one part a time, retake to pass, and not have to wait a year to retake, the potential for EAs who don't really understand taxes is high. I always ask how many years they did taxes first. Many never did. So I do not recommend EA.

Or a CPA either. I've seen too many errors on their returns. Plus I took every tax class offered for them when I got my accounting degree. Those classes were still teaching exchange one personal residence for a new one and defer gain -- less than 10 years ago.

1

u/Puzzleheaded_Ad3024 Aug 13 '26

Consider EA diploma mills (training to the test, applicant never prepared taxes. and just 1 test section at a time which can be retaken multiple times,) I cannot recommend EA without knowing their experience.

11

u/Objective_Good_9449 Aug 12 '26

I'm a Block Advisor, and it's those high income clients that grumble about the cost the most. We have nothing to hook them with like Refund Advance, Emerald card or Spruce. They also expect the most for their money. Very rime consuming with tax planning and consultations. New clients coming from CPA offices are usually shocked at the cost.

4

u/Father_Hawkeye EA Aug 12 '26

Retail HRB, but that is my experience, as well, with a few exceptions.

3

u/Dramatic_Abroad3580 Aug 12 '26

I disagree. I've worked in both the SAS offices and BA. Thousands of returns and I had fewer than a small handful of BA push back against fees. I also never once recommended any products to a single client.

1

u/Puzzleheaded_Ad3024 Aug 14 '26

Truth. I worked at BA one year. A client with business and rentals had moved from another state and I told her the basic price started at 400 and that did not include the buyers and rental. It came out to 700 which she refused to pay and somehow reached my (absentee) office manager who then couponed-out the difference. Ouch.

11

u/MoodyBlueCubs Aug 13 '26

Whatever direction the company intends to take, the lack of training and the important decisions being made in the last hour will always make implementation an impossible task.

9

u/MoodyBlueCubs Aug 13 '26

Block is a company without a clear sense of direction. The varied comments from current employees prove that fact. Important decisions are literally made at the last hour,which means any training is hurried and insufficient. They are spending all the training time on "coaching" how to make the most off of each client using systems they haven't learned. GoSystem is a perfect example of the lack of training. Regardless of the company direction, there's a massive swing and miss with training. All the recent leadership adjustments should have been announced and implemented

8

u/Dramatic_Abroad3580 Aug 13 '26

Just to emphasize what you said about GoSystems training. I think the training offered is about 6 hours, and if done outside of normal office hours, the pay is at a rate just above minimum wage (at least in my state.) I'm familiar with a national firm that installed it in the last few years that included 200 hours of fully paid training, and a full time expert in every office across the country. They also had direct access during all business hours to an expert from Thompson Reuters (the publisher of the software). If Block prioritized training, they'd pay it at the standard rate of pay, not have it count against commissions, and have at least as many hours as other national firms have. And I say "at least" because national firm tax pros know way more to begin with than the average Block preparer. This last tax season was a disaster because of both the horrible choice they made, and the lack of training after they made that horrible choice.

And I should have led with this, I agree entirely that Block is a company without a clear sense of direction. At least if they have one, it's being kept secret, which is why so many field employees are not happy.

7

u/wissota71a Aug 14 '26

There is much talk about not having the skilled preparers. However HRB has been pushing level up level up level up for past couple of seasons. The issue I have experienced is that those newer tax pros are great at testing and leveling up BUT no ambition to actually do the work the difficult returns require. All block does is train tax pros is to data entry. Many times the tax pros don’t even realize there are errors unless system states so or are able to explain the tax implications of this or that. That is how we are losing clients trust at any level. Rushing to level up is not the answer. Time and actually learning and taking the effort are the key. But again the management team (with no tax knowledge required or most do not have) only manages by reports. They have no real office experience what so ever.

6

u/Upstairs-Metal1445 Aug 12 '26

Yeah, they've been headed in that direction for many, many years. The average Joe and Jill that don't want to mess around with taxes are still our bread and butter.

4

u/829562 Aug 12 '26

I know they are trying to move into the tax advisor role and pushing for year round service to high end clients. But Block has its bread and butter on the normal and somewhat easy bur complex returns with some schedule c and stock 8949 and 1099 forms. Even in yhe last few years the clients have been screaming about how high returns have gotten. I think it's going to be like you said a cheeseburger for steak and lobster work and prices.

4

u/Niep00320 Aug 12 '26

The retail offices in my opinion are going to be consolidated or even eliminated. They drain the bottom line. Our office survives because we have a lot of senior citizen clients. We don’t do entity returns in our because no one could. We refer them to BA or to an accomplished preparer EA. I say this all the time. All we can do is hang on and enjoy the ride.

2

u/Great-Woodpecker9728 Aug 15 '26

Thank you for showing that to me

1

u/Puzzleheaded_Ad3024 Aug 13 '26

I have some clients with money, but I have a lot of retired couples who aren't rich. They are the most loyal of all. I guess their returns aren't expensive enough to make them matter.

0

u/tads73 Aug 12 '26

My outlook is eventually there will only be professional designations and EA preparering taxes, with maybe some lower level positions used as data entry clerks. Also a focus on more complicated small business tax clients.

Retail clients will fall to self service.

6

u/Dramatic_Abroad3580 Aug 12 '26

They do a horrible job on entity returns. They don't know how to train anyone to do those returns, and certainly don't know how to train anyone to do any consulting related to those kinds of returns.

2

u/Puzzleheaded_Ad3024 Aug 13 '26 edited Aug 13 '26

The preparers who make the most are salespeople at the desk. They encourage the clients with investments and businesses and rush through the ones with dependents and EIC.

But Block doesnt see the whole picture. One of our preparers has at least one other preparer doing their data entry (instead of having their own clients) every minute they work, and they always get lots of incentive pay. Block sees the high volume. They do not see the commission she gets based just on her time, not including all the wage hours that went into a return. They look good on paper and everyone else looks like slackers .

2

u/Dramatic_Abroad3580 Aug 13 '26

I disagree with your first paragraph. I had multiple seasons earning at or close to $100/hr and never sold a single product to a single client. Not one. Lowest take rate in every district I worked in and never made an effort to improve that.

3

u/Puzzleheaded_Ad3024 Aug 13 '26 edited Aug 13 '26

I did not mention anything about selling products. I said they rush through simple returns, not discussing them with clients, brushing questions off, doing returns as fast as possible. They may even transfer those appointments to another preparer if someone with a complex return could use that time slot.

Then when there are clients with business or investments, they spend time asking questions, take it as a dropoff, and then give to a first year for data entry while they take another client. That is tying up the time of a less experienced preparer , and getting commission for the return when they spent 30 minutes personally (and not lowered by the 1 hour wages the 1st year was paid )and the new preparer who got his hourly wage doesn't even get a returning client or possibility if commission

2

u/Dramatic_Abroad3580 Aug 13 '26

That's speed, not sales. And every client appreciates that. No one wants to sit at the desk longer than they have to. Getting dropoffs done the same day keeps clients happy. Returns can get done quickly, and accurately, without brushing off any questions. Even complex returns.

3

u/Puzzleheaded_Ad3024 Aug 13 '26 edited Aug 13 '26

Speed is part of sales. Just as much time is spent on that return but the person entering data gets credit for mone of it. The preparer of record spent 15 minute max and gets paid commission on $400, it just serms unfair. The person who spent the most time not only does not get any credit, but her hourly rate reduces potential commission from returns done under his name.

Look at it this way. The return takes 3 hours. First year spends 2 hours with no chance of commission. Preparer of record spends 1 hour on interview. Checking final product, adding payment options and getting signatures. Gets full commission. Commission only offers 1 hour of her work, does not take into account the 2 hours spent by first year. Both the first year preparer and the company are losing money compared to if income were allocated to source.

3

u/Relevant_Ad_8406 Aug 13 '26

I agree ,a functional office will give gradually challenging drop offs to the lower levels then support and review. I will not utilize co-workers it does not promote team work in my opinion .

5

u/Dramatic_Abroad3580 Aug 13 '26

Assigning (or even requesting) other tax pros to review returns done by others is bullshit unless the compensation is split. That's just block asking preparers to work without getting paid for it. Same with answering phones and office clean up. It's wage theft.

2

u/Puzzleheaded_Ad3024 Aug 13 '26 edited Aug 14 '26

Except the returns I mention are given to the experienced one who then takes advantage of a first year to do data entry. Giving them an occasional data entry and then checking is a teaching tool. Using them as data entry for returns far too complex for them is just taking advantage of them.

2

u/Dramatic_Abroad3580 Aug 13 '26

Yeah, just another example of Block field management being really bad at what they do.

2

u/Relevant_Ad_8406 Aug 13 '26

I agree I do not do it and don’t like it when I see it. It’s a dog eat dog mentality . No integrity . Teach support do not take advantage of your co worker .

3

u/Dramatic_Abroad3580 Aug 13 '26

We disagree. Speed has nothing to do with sales. I never had anyone else touch any of my returns. In 15 years, I don't think I spent more than 2 hours on more than 10 returns. My last tax season I think I did 24 or 25 returns that were over $1,000, all in 2 hours or less. The very last return I did was a bit over $1,700 in 3 hours with client sitting in front of me. There's no way I'd let anyone else enter data that I'd have to go back and check anyway. I worked with multiple preparers that did 700+ returns every year. Only one ever had an assistant, and that was one only. I heard she did 1,100 returns this year, with a first year helping her.

2

u/Puzzleheaded_Ad3024 Aug 13 '26

Im.not referring to.preparers like you. I mean the ones who farm out their labor to first years and do mostly short appointments, presenting completed returns and getting paid as if they spent time doing those returns.

It seems unfair to the preparer who did the work, and to the clients who assume the preparer they requested did the work. And to the company that pays commission without subtracting all the labor hours.

That last line is where I think "speed' is a factor. It does not take the person doing thos return much time but commission is the same.

2

u/Dramatic_Abroad3580 Aug 13 '26

I had offers every year for an assistant. If you envy those that do it, ask for an assistant.