Accountancy practice not immune to the credit crunch
Gloomy economic forecasts in recent months have started to dent the recruitment plans in some areas of accountancy practice.
Top accountancy firm Ernst & Young has told some university leavers who were promised jobs in September that they may have to wait until next spring to join the firm. It is reported that of the 500 graduates recruited to start in the autumn, 6% have been told they must wait until April, or take a small number of alternative positions. Ernst & Young cited ‘current market conditions’ and said other groups are likely to be considering similar measures in an attempt to cut costs.
Over 50% of employers believe that newly qualified accountants were more likely to stay in their current organisation this year as a result of the credit crunch.
The remaining Big 4 international accountancy and professional services firms, PricewaterhouseCoopers, Deloitte and KPMG, said they have no plans to rescind or delay graduate jobs. However, KPMG is shedding 90 jobs in its corporate finance arm; this could be a barometer for the wider market. Our financial services team have reported a slowdown in mergers and acquisitions; there has been very little activity apart from the mining sector.
But what about the rest of the market?
The press is full of commentary focused on members of the Big 4, but what do the rest of the accountancy practices think about their staffing needs in the current climate? In June, we asked a sample of professionals from across the UK’s 100 top accountancy firms, excluding the Big 4, for their views on recruitment and retention for the year ahead.
We asked a series of questions around intake of trainees, planning for the exodus when audit seniors come out of contract and the subsequent impact on the firm. In terms of intake, virtually two thirds of firms reported their intake of audit seniors is unchanged this year – and that figure topped 70% when it came to a consistent approach for this year’s intake of audit trainees.
While a quarter of respondents said they expected to see fewer seniors choose to leave their firms this year, almost two thirds anticipated the situation remaining the same as previous years - despite the current economic climate and perceived market tightening. Employers told us they were on top of the issue – many of them speak to their seniors on a regular basis about their career paths, planning and future role within the organisation.
Over half the respondents thought that newly qualified accountants were more likely to stay in their current organisation this year as a result of the credit crunch, but they saw the impact as positive. “It will help us add consistency to our client relationships,” said one, and there was a general feeling that more stability is a good thing.
Audit seniors sitting tight
For many years we’ve seen a trend for newly qualified accountants moving out of practice and into industries such as financial services, but almost half our respondents felt that the latest batch of NQs will face a tougher time this year. “The big banks have a massive freeze on recruitment, so it will be harder to secure those opportunities,” one respondent told us, although others still anticipated that there would be plenty of opportunities in commerce.
We know that there’s always a lack of top quality individuals at this level, and more often than not, candidates will draw interest from a number of hiring firms. It’s clear that some candidates may be staying on with their current employer to ride out the credit crunch. The impact on employers is that they need to work even harder to attract and retain the best.
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