Prospects For Audit/Accounting Professionals – Ants Keep Marching
“We all cynically realized that the Firm’s renewed and enthusiastic focus on “mid year evaluations” and providing “feedback” was simply a ploy to prioritize the order people are to be sent to the chopping block…”
And that’s how a note from a Deloitte professional summed up the story of ongoing reductions there. I know the story from personal experience. I’ve had meetings with two good friends in the last week, professionals who I’ve known for years, Senior Manager/Directors at Big 6 firms in the Chicago area, who were both cut during the holiday season. One seems to have received a good package, almost too good, because he’s getting organized but not feeling pushed. The other was unceremoniously cut with very little notice and not much severance. Proves the adage: You get what you negotiate…
So what do I tell a primary breadwinner, one with young children and spouse not working? Can I talk to them about thinking, breathing, really soul-searching about what they want to do next? Fortunately, both are thoughtful guys and they had the same instincts – No more Big 4, maybe even no more professional services at all. The reasons were similar:
1) Work / life balance – For the right organization, they had been willing and able to travel, work the hours, even continue to think partnership was the light at the end of the tunnel. Looking back, they realize they have a choice. If they don’t make it thoughtfully now, they’ll jump back on the gerbil wheel in a very difficult business environment.
2) Lack of interest and perhaps aptitude for the sales requirements of a partner track position. This means too that the numerous jobs always out there for local MDs of staffing firm start ups are also probably off the table. Too hard to be that perfect combination of technical subject matter expert, community leader, and business development leader. The folks who can be successful at those jobs are a rare breed. Which is why they are always available and always turning over.
3) Disillusionment with the audit firm model. And no, it’s not because they’re reading my blog every day. I respect these guys for their staying power in the past, their professionalism, their pragmatic attitude about the pluses and minuses of the Big 4 partnership model. But again, looking in the rear view mirror, they see the writing on the wall. The model is broken and the warts show so obviously in a down market. It’s not pretty and they’re done perpetuating the myth with young people coming into the firms.
4) A vague awareness of the possibility of using their skills in different, new, exciting ways. Desire for, not fear of, a little bit more of risk for the reward they see as overdue. But they lack knowledge of what’s out there, given the heads down attitude they had prior.
The discussions with each were different. Personal needs, age, salary requirements, travel and relocation availability all factor in to what I suggest. Suffice to say there are lots of ways senior professionals, especially with significant experience in top firms, managing engagements in the controls, compliance, security and IT governance arena, can use their skills and experience. Just not perhaps obvious ways,unless you spend 24/7 talking and writing about it as I do.
Both were given a to-do list before we meet again. Both heard me evangelize about Twitter. That’s a given, given my happiness with the tool for broadening my contacts and perspective. And both were promised professional and emotional support as time went on. Because it’s tough out there.
Another opportunity that was discounted for both was a Chief Internal Audit Executive or Director of Internal Audit position at a Chicago area public or large private company. It’s not because those positions don’t exist, but because, unfortunately, I think Internal Audit has missed the boat in making those jobs worthwhile. Salaries did not go up to compensate for greater risk and their stature was not raised post-Sarbanes-Oxley. In addition, many companies went in reverse, outsourcing the function to a Big 4 firm that manages it as a staff augmentation assignment rather than a strategic controls and compliance function.
So few companies value the role of internal audit and less so now. They don’t see it as a required, necessary control mechanism, but still the “flexible” workforce to be used for pet consulting projects of business leaders and where professionals have to continue to curry the favor of business heads so they can rotate back into the business after doing their tour of duty. The internal audit staff and their budgets have been cut while at the same time governance requirements have shone a negative spotlight on the “bendable” internal audit activity. If they’re strong, they get phased out for the Big 4 vendor who will “work with management.” If they’re weak, they get blamed for not being on the job when problems occur. It’s a no-win situation and a high risk assignment in so many cases.
“Partners who have been struggling to sell are now being demoted to Directors, under the theory that a Director is easier to terminate than a Partner. This in turn has a serious negative morale effect on staff. When their teams ask Partners and Directors for answers, they are faced with either the party line, corporate communications-speak or the obvious, horrible sight of someone who fears for their job as much, if not more, than the person asking the question.
Some of the “new product/services” that are being launched are just retread, repackaging of make work solutions that will not provide any enhanced value or ROI for those companies. It’s demoralizing to spend so much time, spinning our wheels, trying to get in front of clients to sell them a “pig in a poke.” These are supposed to be our “trust relationships,” clients who look to us as advisors.
As usual, and frankly as it must be in a partnership, partner profitability is #1 and the partners will try to work staff, seniors and managers to death, while reducing if not totally eliminating any proportionate monetary reward. The standard line is, “we didn’t hit our numbers / forecast”, which everyone who is anyone knows is both false in some cases and most often based on unrealistic forecasts to begin with.”
Someone said it best in one a comment somewhere in your blog: Being a partner is not about client service, it is about sell sell sell. The one aspect missed, however, is that normal salesman / saleswomen understand that they have to continue to sell and continue to deliver to maintain their compensation. They also recognize there will be both good and bad times. Partners of the audit firms don’t grasp this. They don’t like to compete, they hate having to continue sell. Their attitude is often, “Well, I am a partner, I worked hard before to get here, I made X dollars last year and I’m entitled to make x dollars this year.”
The partner system: as fun and successful as Medieval Feudalism
The farewell letter you posted is incorrect, I received this letter, it did not come from a Senior Manager- it came from a Senior Staff member who is not in Audit.
The first 2 paragraphs are word for word what was in the email- the third paragraph was not in the letter at all, please check your facts.
I must agree though, in my office there is only room for a hand full of partners and those spots are full, soon the deserving Sr. Managers & Managers will most likely begin to leave….
I am an avid reader of your blog and have been so for some years (I even got some of my D&T buddies to become loyal readers). Thank you for this entry because it highlights what many of us are currently thinking and seeing.
However, I think that you have spent a lot of time addressing the Senior Manager/Partner crowd. Those guys will be fine for the most part post Deloitte. Please, could you just share some insights with the more junior folks (experienced consultants and Snr. Consultants) with 5 years of experience or less on how we can survive this weed whacker that we all know is coming. I am a D&T staff in the DC Metro area who has put in a lot of work for Uncle D as have others. I am terrified of the coming months because I just don not know If I am going to get one of those dreaded Marketplace discussion emails from HR. I was always skeptical of the whole renewed push to revamp our mid year counseling process especially during this particular period. Many of us feel trapped…we want to get out on our own terms. The boat is leaking but the surrounding water is ice cold.
Fran, I think this is one of your more thoughtful and value-added posts. Thanks!
Also, best wishes to those being forced to leave the firms. I know from experience that new horizons and new opportunities are out there, even in this tough economy.
— Tenacious T.
I’d like to confirm what Anonymous @ 11:23 wrote. The last e-mail you posted came from a senior and it did not contain the final paragraph.
Fran,
I've read you're blog for a time now and have looked to you for valuable insight into the cutbacks in the industry, especially considering that I work for D&T. However, I will no longer read your blog because either you or your "sources" cannot be trusted anymore.
As a professional in the Northeast, I also received the email referenced in this post as it was sent to everyone in the Northeast. As another commenter pointed out, the third paragraph is a complete fabrication, and it was sent by a senior consultant. While I admit the first two paragraphs are very odd and had all of us scratching our heads, adding that third paragraph for effect is irresponsible. The style of that paragraph doesnt even seem to go along with the style of the first two paragraphs. I am disappointed in you…as one of my colleagues said, it's like finding out Santa is isn't real.
The original email is a valid email and you are correct that the last half appears to not have been fully accurate. I would call your attention however to the fact that the majority of the email is correct, and that while the SR may have worked in the ERS service line, often our ERS professionals choose the “Audit Services” tag, although I don’t know why.
Having direct insight from personal partner relationships that I have, I believe that we can be assured of another round of cuts in the future. The question on everyone’s mind is, “who is the next round going to affect?” I believe the answer to this can be found at midyear. Mid-year this year was rougher than year’s past, as Francine mentioned in her post, and those that are either off-track, or are lagging behind are prime candidates for “downsizing”. If this is you, then you should be concerned.
Let’s face reality here, in a struggling economy and being that professional services is always lagging a bit in the economic climate, rough times are still to come. The way to “Stay off the radar” is to simply continue to stay busy, stay utilized, deliver what is asked and more, and MOST IMPORTANTLY, understand the Partner model and your role in the firm. If you aren’t a Partner, you are a “money maker”…plain and simple. If you aren’t generating revenue, directly or indirectly, you aren’t going to stick around. Doesn’t matter if you are EY, PWC, DT or KPMG.
Furthermore, if I may, let me add a bit of career counseling to those more junior staff (staff and sr’s) – If you don’t want to “sell sell sell”, Manager is the extent of your career at the firms. The emailer in Francine’s article is 100% correct. Most people either don’t realize this about the firms, or don’t want to realize this. If you have no desire to sell, then realize your career path ends at Manager (and this is becoming more and more true of every service line, including Audit Managers). Accept this as a fact, because it is.
I received this same email.
Can you explain why the last paragraph and title were conveniently reworded?
After seeing this, I cast doubt on many of the other articles on this website.
Spot on blog. Not only are managers and seniors treated this poorly, but partners are also abandoning the ship. Many are hiding behind closed doors or “working from home”. Their only concern is self preservation. So much the “partnership”. I guess in times of crisis ones leadership skills are clearly evident.
I have removed the “email”. Although the sentiments were valid and seemed sincere, it seems this doc has made the rounds. I have avoided reprinting such potentially doctored notes or hoaxes before and should have this time.
Of what value does that last paragraph add to Francine’s story? This is a typical issue that frankly irritates me. In the process of pointing out that there was an erroneous paragraph that was just “stupid” to begin with, you missed the rest of the email. Furthermore, that email wasn’t the main point of the story.
Why was the title changed? Come on, use your brain. How often in business do people inflate their titles, or for a blog like this, wouldn’t the person seem to get more traction with Francine if their title was higher? I see this all the time when dealing with clients and business and this shouldn’t come as a surprise. Use another example…let’s say you get promoted in June, but it isn’t official until August 28th (not a random date). How many people start using their new titles before then?
Finally, I am not in journalism, but how many times do our media run things that they couldn’t ENTIRELY verify? How DO you entirely VERIFY this, short of finding someone that actually received the email? Again, apparently the last paragraph was added by whomever (I would propose the person submitting it, as it adds no value to Francine’s article), but are we missing the big picture here?
Food for thought.
I have to admit, I am disappointed as to the accuracy of your info. For someone who is supposed to be so well connected your inaccuracy is troublesome.
For anyone on here who glossed over the fact that the email was changed from its original form because the setiments were correct or the first part of the email was correct, you let your biases cloud your judgement. In this industry, accuracy and professional skepticism are important. In fact, many of your postings are about how the audit firms are not spending enough time or enough effort to push back on what the clients tell them to verify that it is true through evidence. Ummm….so what exactly did you just do? And to excuse it, ERS Manager, because most of it is true makes me worry about the work you are performing in the field.
Just to be clear…
The email was included in a very long note with other original thoughts from a previous commenter. I had other Deloitte readers look at the note, with the actual address intact to help me determine if it appeared legitimate. Although neither reader had seen it before, I felt it was worthwhile to print.
I made a mistake and have deleted the email. I did not change or alter any part of the email. Those must have been the sentiments of someone else.
I apologize and should have stuck with my previous policy to not reprint such emails that go around.
ERS Manager, you astound me yet again with your comments. “Of what value” does the final paragraph and the title change add to the email? Well, it completely changes the context of the email. If it’s printed correctly and accurately, it’s just a senior consultant sending a goodbye email. However, if the email is doctored to include comments that 1) the individual is worried about future audit failures, presumably from things they have seen and 2) the individual is leaving because the partner pipeline is very limited, and this email is supposedly coming from someone in “audit services” (which was not in this individual’s signature in the real email, the actual service line was) on the partner track (a senior manager would definitely be more on the partner track then a senior consultant), then it makes it seem that Deloitte’s higher level staff is jumping off the boat before it sinks. Everyone knows that individuals at all levels are questioning their career choice in these economic and industry times, so there should be no reason to print a false email in order to try and hammer that point home with supposed “real world” documentation.
Methinks the reader doth protest too much. The narrowness of the critiques makes me wonder if it’s less about the sketchy source email and more about self-imposed blindness towards the big picture. Who can really argue that numbers are coming down? Who can really argue about the realities of the partner model? Rational people take the macro perspective as well as the microscopic view.
If one faulty email will stop you from reading a blog, then you should not be reading the Washington Post, or the New York Times, or the Economist ….ad infinitum.
I think the point trying to be made is that these firms are overwhelming focused on partners who “sell, sell, sell”. When perhaps the focus needs to shift to client services. Because, let’s face it, how profitable is it for a partner to “sell, sell sell” if there are no partners doing the actual work. Furthermore, for years, the more senior partners, who solely focused on sales, did not share their knowledge or skills with the younger partners simply because there was so much work out there that “line” partners were desperately needed. Now that the work has dried up, the focus is solely sales. However, now there is a major disconnect in these firms. The younger partners, who were so valuable while they were doing all the work, are ill equipped to sell thanks to their senior partners who are so reluctant to share their knowledge.
I have been getting some mail asking for more details about specific opportunities I am aware of, especially for more senior professionals. I hesitate in making those broad sugestions and I did not want to bsay much more about the suggestions I gave my friend here. Also, everyone is diffferent, and I prefer to talk to people one-on-one. (I am not a coach and I am not a recruiter. I do not asks for a referral fee from recruiters.)
I will write more next week on general trends and ideas. I am contacted every day by recruiters and companies, some recently specifically asking how to connect with former Deloitte and Bearing Point consultants.
1)Call or write me fmckenna@mckennapartners.com
2) Connect with me on Linked In
Both of those moves will require you to be the real you. I am. Take a shot.
Wow, altering the contents of an email to serve your agenda? Real weak.
Any individual who makes senior manager or director in a major accounting firm and sticks around to chased the dangled carrot of partnership does so for one reason: greed.
For many of the reasons you’ve noted yourself, there isn’t much incentive in continuing far beyond the level of senior manager. You’ve made yourself extremely marketable and can just about write your own ticket professionally, making more than enough money to support a family with a reasonable standard of living. The only reason to pursue the partnership track is to “cash in your chips” – the mentality of “I’ve put in all this time and effort, and I’m sticking around for the grand pay-off”.
Anyone who is burned by not being promoted after sticking around for reasons of personal greed does not get my sympathy. They should’ve made the smart move and left as a manager.
As a former Deloitte manager laid off in August, this article definately hit home for me. I thought your points on why Big 4 may not be the way to go anymore were point on. All that being said, it is still hard for me to move on from the idea of working for Big 4. There since college, I was active in recruiting,active in my office as a learning facilitator and I believed what I shared with others. I would almost be willing to go back if offered the opportunity – sick, I know, but I loved auditing – except for the betrayal that I have felt after 8 years of commitment.
Anon of 1/16 01:15 PM —
Fran has make it crystal clear that she did not doctor the email. For better or worse, she printed the document she received after checking with more than one D&T source.
I'm not here to defend Fran (nor to bury her) but, seriously, some of the comments are puerile. Do you not understand the difference between a blog and a newspaper? Do you not understand the difference between a multi-billion dollar audit firm in the business of providing audit opinions and an individual who uses the internet to expand business contacts and generate leads for her business — which is not that of providing audit opinions? The lack of logic in some of these posts is … well, sad. (For lack of a better word.)
The lady does the best she can and (being human) sometimes makes a mistake. Get over it.
Also, if you read the post without the letter it's one of the most thoughtful and value-added posts of quite some time. (It's even better without the letter, IMO.)
— Tenacious T.
Call it Deloitte, PWC, E&Y or KPMG my guess is they are pretty much the same. Those who can suck up to the boss the most will be spared. Regardless of experience,client relationships, ethics, performance, years of service or dedication. Yet, Deloitte loves to market themselves, to every media outlet that will give them face time, as being the firm that cares most about its people. That is rich!
Great, timely post. I feel that even in tough economic times leaving or losing a job is a great opportunity to redefine and change your life. So even if there isn’t a lot of employment opportunities there is still a lot of ways to enact positive change.
@ClownCollege; It occurs to me that the you can cash in a whole bunch of ways on being a senior manager/director of a big 4 firm (in good economic times, at least). I feel like greed can’t be the only reason to want to be a partner.
… I’ll let you know when I think of another
Interesting read above. Sorry to say but the blog is becoming nothing more than a platform for whiners complaining about the audacity of the big 4 and others not handing out all that is possible without realizing that maybe you are NOT qualified to move up. Get over it fools. This is a business and every business requires SALES. So if sales is not a forte for you—do something else. There are ample of opportunities for you to spend rest of your miserable life making consolidating journal entries. Stop making complaints and realize what you are good at and then work in that environment. Professional services business is not for you. Now as far as Francine is concerned, kudos to you for having a blog where things like these can be debated—but your comments and insights are hearsay to be best. Can a doctor without appropriate training and being in trenches fly a commercial jet liner?? So what is your training in audit and how much you know about the parameters we need to work in? I would say not much. So perhaps you can qualify your statements “as I am not an expert, but I heard this”. You are misleading people. If there is a fight that needs to be taken up is against the regulators. You should focus on that if you have any clout and know that all big 4 and others are working with the same bullcrap of rules. And NO iam not in big 4 and neither I am a partner. But would like to replace some of the losers here if they are not already.
Thank you for the post, Francine. The ERS Northeast just had a layoff on Thursday and Friday. Some of my buddies who were “good performers” were also cut. Obviously, this was the result of the latest “mid year evaluation”. It was not pretty and the morale there was very low. Based on my understanding, this was the forth layoff since January last year. Rumours are there will be more layoffs either in March or May. The funny thing is that a leader still called the latest layoff as “cut to the muscle”. Obviously, he did not think it was to the bone yet…
As far as the leadership, ERS is going through reorganization now. To a lot of people in ERS, the new organization chart looks so complex. No one knows how it will help the business. We all think that the senior partners have spent the past 6 months creating all the new positions for themselves.
I agree with every single thing you said about Big 4 partners in the article. From time to time, it really makes me sick when partners who spent a lot of time and energy on audit, technical issues, and training staff get “demoted” to directors or “early retirement”. For those “successful” ones, all they talked about were “exciting wins”. And they are the ones running the “Audit” firms.
Ants Marching. I love some DMB…but I never considered how ‘ants marching’ is relevant to the life of an auditor… until now…and I got a good laugh. I love your blog. I do enjoy the shorter more concise posts, some have been rather linky lately. And I continue to read your blog because I work for a mid-tier firm and I want to know what is going on at the ‘real firms’ and in anticipation of another round of ‘experienced hires’ that will be joining my firm and will need retaining to do auditing (the part where you dive in and see WTF is really going on at the client) instead of as*kissing. I respect the Big4 – never want to work for them – but they have some smart folks. Oh, and Francine, my favorite mid-tier firm story this week, as I caught up on my state-to-state registration readings was from the NC Board of Accountancy telling Crowe Horwath (or Crowe Chizek…. depending on the state) that their firm NAME was absolute crap. http://www.nccpaboard.gov/Clients/NCBOA/Public/Static/September2008.pdf
In fairness to the public accounting firms (former big 4 employee here), what they are doing is not all that different than what a lot of their clients are doing. You can’t open up a business section of any paper without lots of headlines of jobs being cut. I think the bigger issue is that jobs are being cut while offshore jobs are being added. That does not sit right with me (but again, don’t think this is unique to the big 4).
Anyone notice the announcement that one of KPMG’s member firms is offering 4 day work weeks or sabbaticals in order to try to fight off layoffs? I would hesitate to take a 4 day work week as I suspect it will mean 5 days (or more) of work for 4 days pay but I guess that is better than no job at all.
and the shareholder system has been so much more successful for the big 4 spinoffs?
Anyone notice that PWC Tax’s recruiters are actively “recruiting” candidates from all levels at other Big 4 and regional firms, under the pretense that they are doing fine and still hiring? Watch out, as they just want to hear you complain and seek competitive intelligence against your firm, while your guard is down. Slimy!
Dear Francine,
Thank you so much for all you put in this blog. I too worked for D&T and have been reading this blog and sharing it with my colleagues. For those that said they don't believe Fran for the email that she posted but she must have been confused. It was sent by a Senior Consultant (my level) and was mistaken it to be a Senior Manager. Her source might have just said "senior" and thus the confusion. Anyways I can validate each and every word in that paragraph. But thanks to your post, it prepared me for the most recent lay off last week – which is why I am now jobless.
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