While Lenovo and other Asian companies are using acquisitions to build market share and tap talent in the West, U.S. and European companies are acquiring talent in the East. Deloitte Touche Tohmatsu has its sights set on China and is buying up skilled workers to expand its base there.
Deloitte is already a quintessentially global company. The giant professional services firm, born of British and Japanese parents, is now a Swiss verein, or association, with global offices in New York and 115,000 employees in 148 countries. Nearly 4,000 employees work in 10 offices in China, where Deloitte’s CEO for the region is Peter Bowie, a Canadian.
On June 1, Bowie finalized Deloitte’s first merger in mainland China with the acquisition of Pan-China CPA Ltd., including its 225 employees. The Pan-China purchase is part of Deloitte’s five-year China strategy, which will double Deloitte’s staff and quadruple its revenue by 2009.
“The primary objective of the Pan-China merger is people,” Bowie says. “In this marketplace, we can’t keep up with the demand for our services. We have been forced to decline opportunities because we don’t have the resources to deliver.”
An integration team of employees from Deloitte and Pan-China reviewed and reconciled the human resources issues and folded the Pan-China workforce into Deloitte’s compensation and performance management systems.
“Because the focus is on people, we have to ensure that the merger is fair and equitable and that people get a chance to develop and grow in the way they expect to if they join a Big Four firm instead of a local firm,” Bowie says. All of Pan-China’s partners became partners at Deloitte.
Deloitte plans to pursue other mergers in China, but the expansion will also be organic. Bowie signed on 700 new employees last year, including 500 new graduates entering the job market for the first time. This year, he will hire an additional 1,000 employees, including 700 new job-market entrants, from a pool of 13,000 applicants.
“The talent here is abundant and remarkable,” Bowie says. “Our new hires are smart, hardworking and committed. We take local CPAs, for example, and expose them to the global approach to auditing or risk management, and it does not take long for them to learn it.”
Integrating new hires at this breakneck pace is a huge task. Deloitte runs monthly orientation programs in addition to meetings for the Pan-China employees. “Retention is absolutely critical,” Bowie says. “We focus on creating learning opportunities for employees, and we’ve introduced some employee assistance services.
“One of the keys to retention is keeping pace with the market for compensation, which is changing quickly.” He surveys the market for the mainland and Hong Kong every six months to keep pay rates current and retention rates high.
“In the long term, we know that you can’t build a successful professional services firm with expats,” Bowie says.