Five years ago if someone had told New York recruiter Lorraine Hack that certified public accountants would be a hot commodity, she would have laughed. But with Sarbanes-Oxley and the ongoing round of regulations and accounting changes, demand for senior-level auditors and accountants has exploded. "Accounting people are now the rock stars of finance," she says.
Employment of accountants and auditors is expected to grow by 10 percent to 20 percent through 2010, according to the U.S. Bureau of Labor Statistics. Anecdotally, recruiters and executives say the positions that firms are working the hardest to fill are the senior-level positions.
Hack, executive director of the financial officer practice at Russell Reynolds, says that she spends about 20 percent to 25 percent more time filling these high-level positions, which require a great deal of technical expertise, than she did three years ago. Companies are willing to pay big dollars for these hires, but that’s no longer enough to woo them. "In this crazed market, these folks are being barraged by calls from agencies on a daily basis, and half the battle is getting them just to call you back," says Tom Murphy, national director of human resources at BDO Seidman.
Between tax season and the various accounting deadlines, it was hard enough to get these candidates on the phone to begin with, Hack says. They’re busy with quarter-end deadlines, year-end deadlines and more. "That leaves about three to four months a year that these people are not reachable," she says.
More employee referrals
Ernst & Young’s solution to the hot job market is to spend more time reaching out to alumni, says Karen Glover, head of recruiting at Ernst & Young. Every ex-employee is assigned an Ernst & Young staffer to stay in contact.
Also, the firm has begun having key account reunions, in which everyone who worked on an account gets together. When someone does return to the company, Ernst & Young makes an effort to publicize and celebrate that move through its internal newsletter. Currently, about 22 percent of hires are employees who have left the firm and come back, up from 20 percent five years ago.
Having a trusted person to talk about the culture of the company is a huge differentiator in today’s market, Hack says. Particularly with the ongoing headlines about accounting scandals, job candidates want to be assured that they’re not about to walk into a place where they are going to be pressured into doing something unethical.
KPMG last year increased the bonus it offers for employee referrals by an average of 20 percent and is planning to hold quarterly drawings for iPods at all of its U.S. offices, says Cheryl Levy, national director of recruiting. Any employee who passes on a referral will be included in the drawings. The firm also asks new employees after 30 days if they want to recommend any of their friends for jobs within the company. Fifty percent of KPMG’s hires come from employee referrals.
"In this crazed marketplace, one of the best ways to get that call returned is by having an employee referral," says Murphy. BDO has made a more concerted effort in the past several months to mention its employee referral programs whenever it can. Thirty-eight percent of all hires at BDO come from employee referrals, up from 24 percent in 2000.
BDO estimates that that an employee referral costs two to three times less than an employee found through traditional methods because the firm saves on recruiting costs. Also, Murphy says that employees who get hired through a referral are more cost-effective because they tend to remain with the company longer than employees found through traditional methods. He could not elaborate on the retention rates of referrals because BDO does not track them separately.
Smaller firms do not have the same employee base to glean referrals from, and have to be more proactive in identifying and building relationships with candidates. McGladrey & Pullen, a Bloomington, Minnesota, firm with 2,500 accountants, has a dedicated team sweeping online job boards and identifying potential candidates. Sean Harter, senior director, national recruiting, says McGladrey & Pullen contacts candidates to see if they are interested in working with the firm. If not, the company keeps them in a database and reconnects with them every 90 days. "It’s our responsibility to stay in front of them," Harter says. McGladrey has 50,000 candidates in the database.
To further establish a relationship with candidates, the firm recently sent a letter from its senior VP of human resources along with a book, Managing From the Heart, to everyone who had declined offers from McGladrey over the past 18 months. "The gist of the letter was to tell them, ‘We would love to stay in contact with you and would like to open the door for discussion at any time,’ " Harter says. Within two months of sending the letter, the company had received dozens of calls and had hired two people who contacted McGladrey.
"Your career is a marathon"
One of the biggest challenges in recruiting experienced accountants is that there are just not enough of them. Colleges and universities offer a flood of entry-level job candidates, but those with the technical knowledge to understand their way through the maze of accounting rules are scarce. "We realize that there is not an untapped pool of people to bring in, so we are focusing on making people want to stay with us longer," says Jennifer Allyn, director in the diversity and work life office at PricewaterhouseCoopers.
One way that PwC is looking to address this is by creating an environment where employees work more as teams, she says. The firm is conducting a pilot now to allow accountants to always work with specified clients. Currently, the firm’s associates work as free agents and are deployed based on where the project need is, Allyn says. "We find that people don’t feel connected to the other people at the firm," she says.
PwC is also conducting employee focus groups to get feedback about how it can provide staff with a way to slow down without stopping work altogether, Allyn says. "Our work model used to say. ‘Your career is a marathon and we would like you to sprint the entire way,’ " she says. "Some people would pass out after Mile 10, but that was OK because we had so many people. Now we are trying to figure out how to keep them over the long haul." Specifically, the company is considering offering a type ofsabbatical program where employees could take a break but still stay connected with the firm.
BDO’s Murphy agrees that retention needs to be a focus for all accounting firms because it’s an industrywide issue, withturnover costing at least $50,000 per person. "But that is what it would cost per person in a regular market," he says. "In this market, where firms conceivably are not accepting all the business they can because they are not completely staffed, there is also the opportunity cost of lost business."
The accounting industry, like many others, faces the skills shortage that will occur when the baby boomers begin to retire. There is a bigger issue, however, that is specific to public accounting: People do not see it as a long-term profession.
Too often, people start out as public accountants only to end up as financial officers within the corporate world, Murphy says. "The retention rate within the industry is disproportionately low," he says. BDO has joined a task force to address this issue, but Murphy declines to elaborate on it. "We as an industry need to look at how we can go about branding the career of a public accountant," he says.