Taking Your Pulse

Taking Your Pulse

September 20, 2010

Searches during the last twenty-four hours that brought readers to re: The Auditors.

(Note to reader:  Yes, I have recycled this template and put new searches on but left the comments from previous iterations.  I have those searches stored so if anyone is interested in the context for a comment let me know.  I haven’t gone through this exercise since March, so I thought it was interesting to see that the focus, at least from what I see, is off layoffs and on to real issues.  And, boy oh boy, are there lots of them…)

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145 replies
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  1. Anonymous
    Anonymous says:

    Just remember – when times are good companies carry staff that aren’t as talented as they would like. Why — it is harder to hire the most talented people and there are fewer economic reasons to take action. When times are bad — the first to go are those who are lower performers. Eventually, if times stay bad, the more talented folk will also get hit. But as the economy forces partners to make these decisions, they always make the decisions on factors such as “performance” and “fit” with the organization. If the economy stay bad for longer – they focus on the people who can market… because you have to have that first before you have need for the people who can deliver the work. So they get more and more shortsighted – and when they do that it is those who can market that matter most when the economy is poor. I think the HR people simply understand these facts of business and give the spin that works for the situation.

  2. anon
    anon says:

    The HR people do not understand the facts- in fact they are so clueless everything they do is from templates, everything, how to have conversations on firing people, how to react in firing someone in the situations, eg “cry” do x, get angry do “y” essentially its all about “state the facts”

    The point is, HR are just admin, typically they are failed auditors, so getting the boot from them is beyond disrespectful! The point is, play it carefully, America is an “at will” employer, you dont have to get severence, normally severence is in exchange of you signing a contract to state that you will not sue the firm. The firms severence is NOT generous, they simply bank on the fact that you are typically in your 20s not that savvy and so wont sue!

    As for the HR folks- well a point for your is- at PwC in San Francisco some HR girl had to lay off lots of the EAs in 2001, then at the end of laying off the people and doing the dirty work, her boss was like “ok now you have no one to manage, heres your pink slip”- didnt feel too sorry for her to be honest- but with the numbers being reduced, yep HR you are an overhead its coming your way too

  3. De Minimis
    De Minimis says:

    Maybe it is because I’m older and have more experience working at places with less than ethical management, but I never took the “No layoff” promises seriously.
    Other firms were doing it, and it seemed pretty obvious to me that PWC was going to do the same, especially when they started doing things like changing the ranking system. This is another case where the younger demographic really works in the employer’s favor.

  4. anony
    anony says:

    @102 – Trust me friend, the axe has already fell for HR folks. DT’s shared services had experienced cuts over the past several months, and other admin folks had been part of the last couple rounds of layoffs. The HR drones are shaking in their shoes too. They are in no safer position than anyone else.

  5. Tenacious Truman
    Tenacious Truman says:

    Anony @ 101 —

    Your point would be a lot easier to accept, if there weren’t so many stories to the contrary to be seen, heard, and read. Why lay off a “poor performer” who just landed a $3.5 million consulting project, the week before it was to start? (Yes, the project was pulled by the client after the person who had the relationship was “separated”.) People with high forecasted utilization and good performance reviews have been RIF’d too many times for me to simply swallow that line about how “the first to go” are the lower performers in tough economic times. That statement is simply not borne out by the facts.

    It’s interesting that PwC redefined its definition of “poor performer” so as to create a reality that supports its RIF decisions. 3s are separated, 2s get to keep their job but no raise and no bonus, while 1s get raises and bonuses. What do you bet the firm has established acceptable ranges for each category? Anyway, redefining the rating system for annual reviews today does little to change the lack of business logic and support for prior year RIF decisions.

    The thing is, the line about “bad fit” may be the closest to the truth. If by “bad fit” one means failure to find a strong partner/patron and failure to put internal firm networking ahead of technical competency and dedication to quality, then I am forced to agree. Those individuals who seek individual rewards and the self-satisfaction of a job well done, while eschewing “group-think” and kool-aid drinking, may actually be a bad fit with the firms’ cultures.

    Which is a big part of the overall problem, as I see it.

    — Tenacious T.

    PINK SLIP says:

    A handful of staff were just let go from the PCS Tax Group @ PwC San Francisco. Individuals were swiftly escorted out the door by H.R. and a Partner. No time for those discharged to pack their belongings, much less say their last goodbyes…

  7. Anonymous
    Anonymous says:

    @TT – that is your perception not the perception of the people who made that particular (or those particular) decisions. I have seen many times at many firms where hire/fire, promote/non-promote, etc decisions are made in ways that do not make sense to me. No matter how hard the decision makers work at it – they will never make decisions in these areas that make sense to all their staff or even all their managers. There may be many parts to the stories that you do not know or that you do not see as significant. If said person brought in a $3.5M project that sounds really good… what if all the others being considered brought in projects with higher revenues? What if the cost to achieve those revenues were steep and the profit margin negligible? What if it was a risky client unlikely to pay? What if this individual had falsified some paperwork? What if this person threatened the firm leadership using the $3.5M project as collateral and the leadership called his/her bluff? What ifs can go on forever. The story as you tell it sounds like a poor decision by leadership — but it is by definition your perception and a one-sided view.

    I need not know anecdotal stories. The truth is simple – leadership will make decisions that effect the financial health and sustainability of their firm — that means poor performers go first and poor “fit” go next. After that, they will look ar marketing over technical ability. These ARE and always have been and will be the criteria. What we can argue about until we are blue in the face is how people are evaluated against this scale. And once it comes to judging people (which we all do even if we say we don’t)… it is subjective and perception. You clearly disagree with the leadership of firms you have been with. I felt that way at one company I worked for (not a B4) — seemed like the major criteria for remaining at the firm was that you had to be a good republican. But I have not witnessed that kind of odd decision making elsewhere or at the B4 I have worked for.

    As for group think — every firm of all kinds has a culture… and there will be group think involved in that culture. But there seems to be a lot of room for disagreement and discussion at the B4 I know about. It isn’t perfect — but it isn’t a cult. I agree that the focus on competency and quality is not as strong as I would like it to be. But the measure of competency I hold in my head differs from many — I probably agree with you in those areas. I find many techical incompetents get pretty far along riding the coattails of those that are competent… I mean the real problem solvers and critical thinkers and those that can implement solutions are not rewarded as well. But, this is nothing unique to the B4 and nothing particularly strange.

  8. Anonymous
    Anonymous says:

    @102 – you are correct that HR is an admin function. Their training isn’t as accountants and they are not failed accountants… they are trained in HR. Yes, they are trained to deal with difficult situations using techniques some believe to be proven — you call them templates. They are not the problem nor part of the solution. They are the messenger and the people pushing the paperwork around. What matters is the reviews of the managers, directors and partners within your practice — and they should be the people delivering the message. Give the HR person a break — they are just trying to help people through the process… to explain their situation and the choices they need to make (Cobra or not, sign some disclaimer or not). Direct your attention where it matters — HR has nothing to do with the discussion… as you say, they are admin. But they do understand what is going on – and they do understand the criteria of decision making and the situation.

    As for poor severence — on this site I have seen people claim 1 or 2 weeks of severence per year of service. That is huge. I’ve never seen severence more than 2 weeks at any other job (and I have had many). Severence is set by corporate policy and has nothing to do with signing disclaimers. It seems like ADDITIONAL severence is being offered for such disclaimers and promises not to sue. Consider it a law suit settlement up front — what are the odds you’d win such a suit anyway… take the money and start a new path in your life. Unless there is some clear cut law suit you can win, it isn’t worth the effort.

    I do not know if the 20 somethings are being disproportionately hit. But one criteria has often been seniority. This particular criteria is in conflict with another – making cuts that are impactful financially (high salaried people). So the trick is to pay for seniority that is proven experience worth the money. To the extent that the 20 somethings have had less time to prove their experience is appropriate to their pay, they may get hit harder. But there is truth to the fact that the younger folk have more time to recover, and generally have fewer responsibilities (home, children, elderly parents, etc). These factors should not impact the decision making – and generally do not. But the young folk who are unemployed now should be comforted by the fact that they have time to recover and they will recover just fine.

  9. Ex-DT
    Ex-DT says:

    “The thing is, the line about “bad fit” may be the closest to the truth. If by “bad fit” one means failure to find a strong partner/patron and failure to put internal firm networking ahead of technical competency and dedication to quality, then I am forced to agree. Those individuals who seek individual rewards and the self-satisfaction of a job well done, while eschewing “group-think” and kool-aid drinking, may actually be a bad fit with the firms’ cultures.”

    I can relate to that. I was told (and believe, with scorecards to support it) that my performance was not an issue. My lack of brown-nosing, sorry networking, with certain partners, along with raising questions they didn’t always want asked, was likely my downfall. Was PO at the time, but am happier for it now and will never seek to work in the big 4 again if I can avoid it.

  10. Tenacious Truman
    Tenacious Truman says:

    Anony @ 107 —

    So, what I hear you saying can best be summed up by this quote:

    “Yeah, well, you know, that’s just, like, your opinion, man.”

    We’ll just have to agree to disagree philosophically on this one, man.

    — Tenacious T.

  11. Anonymous
    Anonymous says:

    @TT – in a way that does sum it up. But I think you and I (@107) would agree on who to hire, fire and promote. I have put together enough of your posts to get the picture and I really think we would agree. My point isn’t about the actual decisions. My point is about the criteria upon which to make the decisions. I think that senior management has the same criteria as you and I would/do — performance, fit (meaning interest level, attitude, aptitude, willingness to work, things like that — fighting with others, not being cooperative, going AWOL these are not a good fit), marketing, technical skills. I think we all might agree on the priority these criteria take (you, me and the partnership). Where we disagree is on the measures of these things… they often have more information too (I know a couple times we had what appeared to be good people let go — they falsified timesheets and resumes and stuff like that), and they hear the stories from all angles (all the managers, many of the staff, and so forth). They perceive the world differently than you and I do. And when they take the information and put it all together against those same criteria – viola, the decision is different. Sometimes they did the right thing, sometimes we actually knew better. But that is the way it’ll be.

    I do not believe it is all malice or favoratism. There is no incentive for them to keep the poor performer over the good one. It is how they measure performer and how you and I do that differs. Note that if I had my way – I would layoff at least half the people in my practice and demote the other half (OK – an exageration — but not a huge one).

  12. Michael G
    Michael G says:

    @106. Well, for whatever is worth, I guess they afraid you might insert a virus on your workstation or set your w/p on fire or something.

    To be honest, it happened to me too @ BDO too. I wanted to wait for a partner to get off the phone so I could say good bye, but was told to leave. Ironically, that partner was laid off about a hour later =(

  13. De Minimis
    De Minimis says:

    It’s funny in a sad way, my “coach” is getting the boot later this summer. Not due to performance, but the firm decided to dissolve his practice area.

  14. Anonymous
    Anonymous says:

    I hear Jefferson Wells is also imploding. FM, as a former exec have you heard anything about this?

  15. Michael G
    Michael G says:

    @De Minimis
    Well, that wouldn’t be a suprise. Especially if it is something in a tough industry. It could be worse, the entire BDO Consulting was thrown overboard, we are talking about 20+ year director with solid experience and every kind of fraud/CPA/CFA/expert witness related certification. I had a friend in E&Y whose boss had a dual CPA/CFA solid exp just brought a house w. pregrant wife and everything…

    gone, nada, toast. Which leave me, who was also laid off later, wondering what good is 2 part of my CPA + 6 month of experience @ BDO mean anything, lol.

  16. @ Michael
    @ Michael says:

    What does the fact that your friend just bought a house with a pregnant wife have to do with anything? Those are all decisions he made. Leave sensational reporting for the NY Times. Now back to the layoffs!

  17. De Minimis
    De Minimis says:

    Yeah, my coach was a long-time director who had to go through the same situation back when Andersen went down, so I guess he’s used to it by now. Somehow I don’t think he’ll have too much trouble compared to the numerous associates who have gotten the axe.

  18. Michael G
    Michael G says:

    @116, Friend’s BOSS. well, it was just troublesome, I was hoping the firm would made a temp salary reduction or something before dropped him like a rock.

    @Deminimis I am not exactly sure, he is likely to have a mortage, house, etc. And if he is identified as a master of practice X (for example, something exotic like the transportation industry or gambling industry), then he could be in serious trouble depending on that sector’s performance. That is a huge problem at times if that sector is going through the finance version of a enmma.

    Plus, with wife, kids, community standing, houses, friends, a manager/director would accumlated so much connection w. society severing them all would be tough. As opposed to small associates like me who can just dust myself off, sell my furniture, and head somewhere else.

    PINK SLIP says:

    PwC San Francisco Tax just wacked a few more yesterday and today, including one individual in the PCS group expecting a child any day…

  20. anon
    anon says:

    well seems pwc san francisco canning a lot of minorities and i think pregnancy is classed as “disability” this is something that if you could connect the dots and group together, that would be a class action suit easy to win when faced with the facts
    go to the EEOC (government body) to let them know about this so that others can be protected in the future

    PINK SLIP says:

    PwC San Francisco Tax & Audit went hog wild today with the firings/layoffs. The firm that was suppose to not do any firings/layoffs just did. They LIED.

  22. De Minimis
    De Minimis says:

    No one should be surprised by that, though. The signs have been obvious that PWC was going to do this for the past six or seven months.

    I think a lot of folks are looking for other positions regardless of whether they survive the cuts. PWC Tax is not going to be a good place to be for a while. I feel sorry for the poor sap that I helped recruit, but maybe he will have better luck now that they have reduced their headcount.

  23. Anonymous
    Anonymous says:

    The cuts will keep coming until fee pressure eases and business starts stabilizing. I’d bet all 4 go through another round by the autumn.

  24. Anonymous
    Anonymous says:

    Seems like business is picking up… it is definitely picking up for advisory/consulting.

  25. Tenacious Truman
    Tenacious Truman says:

    Anony @124 —

    Can you let us know what services are being sold? No need to get specific, general terms are fine.


    — Tenacious T.

  26. Anonymous
    Anonymous says:

    @TT – I am not comfortable saying much. I will say that my team was over 100% busy Dec-April, slow in May, moderate in July and is picking back up to what would be a normal load now. I do not see any slacking in that schedule at least through September… and coordinating vacations has become a struggle. Some work is audit support. I have noticed when companies have mergers or been acquired there is more interest in stronger audit procedures.

  27. Anonymous
    Anonymous says:

    @126…audit support is not advisory/consulting work – or so I have never heard it defined that way. So your two posts contradict themselves unless you care to provide more information. Advisory services are having a very difficult time seeing pipeline potential come to fruition as budgets and spending are still constrained and cut out in many many areas.

    On another note, FM why no shout out to Going Concern website? Figured you’d do some cross-promotion.

  28. fm
    fm says:


    re: Going Concern Twittered quite a bit in their support yesterday. My first column for them will come out tomorrow. Will have a link and announce on my blog then. 🙂

  29. Anonymous
    Anonymous says:

    @127 — specialty practices in Advisory provide assistance to audit teams. I call that supporting the audit team. When audit teams bring in “speacialists” from other practices (sometimes Advisory)… these other practices are supporting audit and charging the audit code. So… you are correct that audit support is audit work and charged to audit engagements. The people doing it may be from other practice areas. The audit support comment was a passing comment that I am seeing an increase in this area (as in clients who have had acquisitions want more work done this year than in past years — not to say they don’t want it cheap or for fewer hours – what they want and what they get may not be the same though)… but the majority of our work is not in support of audit.

    As for not believing the workload — I have some 15-20 engagements ongoing right now and only 6 people to suport them. I am panicing over the next 2 weeks to get enough people to complete the immediate needs. I am going to offices outside my region to get staff to help.

    Believe what you want to believe… but my team is hoping for rest.

  30. Anonymous
    Anonymous says:

    My guess is that the firms are not planning for any growth and therefore do not plan on hiring any staff to alleviate your problem.
    Unfortunately you will have to work your staff to death and make do.
    I hope for the client’s sake that the quality of the deliverable doesn’t suffer.

  31. Anonymous
    Anonymous says:

    @130 — the quality of the work is fine. We have 3 new hires coming on Oct 1. There is no plan hold off on their hires that I am aware of at this time. We had 3 interns join for the summer and they are working plenty. I believe we may also open a position for at least one experienced hire.

    For those wondering about the work — think deep computer skills. The people at my firm with deep computer skills (database, programming, statistics and even advanced Excel and other applications) have a pile of work all around the country.

  32. Anonymous
    Anonymous says:

    The 5th largest US firm by revenue dissolved today…and no one cares. Guess that shows how much things revolve around the Big 4.

  33. Anonymous
    Anonymous says:

    McGladrey’s audit practice is divorcing the tax/advisory side. Looks like a much smaller firm going forward…

  34. Clueless
    Clueless says:

    PwC US has been recently laying off, or should I say firing, people throughout the practice. I have confirmed reports of over 100 in Advisory and 40 in US IT. This is a conservative number. I was fired last week for bad performance after 10 years with the firm. I had received very good ratings for the previous nine years but this year I received a “less than expected” rating, even though 80% of my feedback forms were “Accomplished” and 20% were “developing”. I did not have one single item in the “needs immediate improvement” category or one “insufficient” rating. My guess is they had been planning this since early this year and told the other partners to make sure certain people receive poor ratings. My employment at PwC was “at will” so I am very disturbed that they would try to justify my dismissal as poor performance when they could just dismiss me without cause. I am not alone – I have spoken to other people that were let go and they are telling a similar story. PwC is trying to keep everything very quiet.

  35. Rumor Has It
    Rumor Has It says:

    that 2010 will be even worst than 2009. All the public accounting firms are melting down, and those who remain don’t know how to manage the melt down. Leadership is still trying to save face and won’t admit the downward spiral. To keep up with their image, they try to dismiss people for performance failures. The key is to fault someone else so they themselves will not be blamed. Be glad that you are gone.

    Deloitte is quietly cleaning up at the senior levels, after the massive 2009 layoffs. Watch for sudden leadership shifts that they try to spin as anything but the firm sucking wind.

    The catch phrases of the year seem to be “rightsize” and “cost cutting.” Get some cheerleaders and pom poms and it will be the coolest thing since slice bread.

  36. Anonymous
    Anonymous says:

    Agree with 141 , PwC Tax SJ just let a bunch of talented people go over the past 2 months while still claiming to be ‘investing in their people’. I have survived the 4 rounds of stealth layoffs they have done over the last year but I am sure more will come. The last round was people who were good but made a lot of money. As always they were couched as ‘performance issues’ even though I know of 2 people who were high rated at arc….the Lies dont stop people. GET OUT NOW! I know I am looking…

  37. what the hay
    what the hay says:

    what just happened FM? Did you edit an old post with the newest search terms? Why keep the disconnected comments? I see some interesting things in there that I’ll have to ask around about 🙂

  38. Francine
    Francine says:

    @what the hay
    Hi, Yes, I did. And it’s been a while since I went through this exercise. But I keep the text in a file. The comments reflect several iterations. It’s a running commentary so I was not sure the old search terms are relevant several months afterward but I don’t like to ever get rid of comments. Too confusing?

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