This column was originally published at Going Concern.com on June 9, 2010.
Attrition levels in the Big 4 are at historic lows. People are staying, if they can, because of generally weak prospects outside. Unfortunately, the Big 4 and next tier are still cutting, as evidenced by news on this site and consistent reports on re: The Auditors.
The pace in the external job market for former Big 4 audit and tax professionals is picking up slightly. There are jobs in industry, but it’s best to scout those carefully and make sure you’re “the one” before planning your good-bye party. The CFOs seem to be unable to make up their minds about hiring.
In the latest survey, nine percent of CFOs said they anticipate staff reductions. This is up from eight percent in the prior quarterly survey.
Add it up, and CFOs are more pessimistic now than they were three months ago. Not a recipe for bringing down the nation’s stubbornly high unemployment rate.
This is particularly dreary because the source of this survey, Robert Half, has a vested interest in saying everything is going to be fine. Robert Half is a publicly traded staffing company focusing on accounting and finance temporary placement. Their clients (and their recruits) are accounting and finance professionals. If they admit the market for accounting professionals is in the toilet, they admit their own business outlook is dismal.
In the meantime, the Big 4 are still reeling them in like large mouth bass via the new hire and intern programs.
So let’s get this straight…
The firms are pushing out “experienced” hires via layoffs, poor raises and bonuses, fewer partner promotions and longer hours but continue to make room for lower-cost, new hires from the universities. Unfortunately, “experienced” is not what it used to be.
The industry accounting hire model is based on receiving fully trained Big 4 “experienced ” professionals who leave the firms of their own accord after 4-8 years. They typically already have their CPA, have been through several busy seasons and have led audits. But they may not yet be managers and, therefore, not exorbitantly expensive.
Staff with less than 1 year of experience have been cut as well as terminations made at the pre-partner level. There are reports that firms have asked staff with less than three years of experience to repay CPA signing bonuses and CPA review course subsidies. These young professionals probably don’t have their CPA and they do not have enough experience to be considered “experienced” in the typical way industry had been accustomed.
Industry and government are not prepared to take over where the large public accounting firms have left off and train new graduates. Where are the jobs for someone with only 1-2 years experience in the public accounting? They can’t go to another Big 4 firm since those firms are hiring less and then only new grads or specific expertise at higher levels.
Any ideas? I get lots of mail and blog comments with that question. Do any of the optimistic professors – taking money from the Big 4 for research, endowed chairs, and new curriculum pushes such as for IFRS – want to answer my mailbag once a week?
That would be a great blog feature – Ask a Professor: What Do I Do Now?
The universities continue to allow the large audit firms to come to campus and promote job opportunities, stability, and great working environments. And the magazines still print that accounting firms are best places to work or start your career. The schools still pride themselves on excellent placement statistics. Have the universities reopened placement centers to accounting graduates who’ve been cut with less than three years experience?
During the Sarbanes-Oxley boom, universities responded to the firms need for more and more graduates by bringing in tons of international students. The firms hardly ever sponsor visas anymore. Instead they’re building centers in India and on the African continent to employ them at home. For much, much less. There are active, strong, mandated initiatives at Deloitte and PwC, for example, to use a fixed percentage of offshore staff on every audit.
Don’t be fooled by seemingly stronger hiring and recruiting trends for new graduates and interns. The Big 4 may restart the assembly line before the economy fully recovers because it takes two to three years to polish the part, from an offer of an internship to finished cog ready for full-time work. The firms would rather pull cheaper staff resources in at the new graduate level and work leaner than have an over abundance of expensive experienced staff unassigned and eating into partner payouts.