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As one Big Four firm boldy sets out its plans for a massive recruitment drive, are we about to witness another skirmish in the fight to attract financial professional?

Esther An

This article was first published in the November/December 2013 UK edition of Accounting and Business magazine.

When EY stole a march on its competitors last month by announcing its intention to take on 3,700 more staff by mid-2014, plenty of qualified accountants and other professionals must have been dusting off their CVs in preparation for the headhunter’s call.

Even looking at the small print of the story, the figures still sound impressive. Between now and its financial year-end in June 2014, the firm, which is the smallest of the Big Four, plans to recruit 1,300 students (graduates and school leavers) alongside a further 2,400 experienced professionals. This compares with 780 graduates and school leavers, and 1,200 experienced hires this year.

These figures do not, however, include natural attrition within its workforce. The firm currently employs around 11,000 staff, including 565 partners. Assuming an industry-norm attrition rate of 15%, the firm could expect to lose more than 1,500 staff over the same period.

So the net increase would be less than the headline 3,700, but nonetheless the growth rate is still ambitious.

‘This will be across all levels of the business,’ says Steve Varley, EY’s UK managing partner. ‘The headcount growth will be less because people do leave to move on, but I’m telling my partners that we need to attract 3,700 new people.’

The push into the recruitment market is, the firm says, driven by increasing levels of confidence among its clients, but also by significant growth in some niche advisory areas. Varley points to plans to double the size of the firm’s cyber security team to 500, and boost its ‘big data’ analysis teams to 700.

‘There has been an explosion in demand across government as well as other sectors,’ Varley says. ‘But although there has been a focus on large corporate organisations, one of our concerns, and of growing client interest, is how cyber security affects SMEs, particularly those that have strong intellectual property assets.’ Rather chillingly, he warns that these smaller businesses could very easily become targets for state-sponsored espionage.

Of course, it is not just EY that is looking to boost staff levels as clients move from cost-cutting mode to a renewed appetite for growth. Rival Big Four firm KPMG says it is planning to take on 1,500 experienced professionals alongside 850 students, including 150 school leavers in the coming year.

‘We have seen an upturn in the last few months,’ says Alison Heron, head of recruitment at KPMG, ‘and we will be taking on people right across the business, in audit, tax and advisory.’ Heron adds that back in 2011 the firm said it was on course to recruit 7,500 experienced professionals over the following five years. ‘But I think we are going to reach that target before the five years are up,’ she says.

In terms of sectors, Heron says that financial services is one of the ‘hot’ recruitment areas, as well as energy and natural resources, utilities and oil and gas. ‘On the advisory side, technology consulting is also very big,’ she says. Like EY, she points to cyber security and analytics as areas earmarked for growth.

Deloitte and PwC, the remaining two Big Four firms, are also planning for increased staff recruitment – PwC is aiming to take on at least 4,000 by the end of June next year, while Deloitte is looking to hire 3,700.

The right fit

But given that these firms will be fishing in the same talent pools, is there a concern that this latest recruitment spree will drive up salaries?

‘We are starting to see this already,’ concedes Heron. ‘It is going to be tricky, because we are looking for niche skills. But we want the right people, so it will be about the cultural fit as well as the skills and expertise that they can bring in.’

And Heron adds that sometimes it is not always about money, and that candidates could be tempted to leave one organisation to join another as a result of softer issues. She believes it is also about what the firm can offer – not only once an individual is on board but also during the recruitment process itself. ‘First and foremost, before we get to that stage [of employing someone] it is about how we look after them as a candidate,’ she says. ‘In the same way that we look after clients, it is absolutely crucial. It is about how the initial approach is made, it is about whether, when we say we are going to do something, we fulfil that promise, because that gives an indication of how you will be treated once you are in the firm.’

Understandably, talk of recruitment booms will be good news for the agencies that supply the firms with suitable candidates. The recruitment agencies that specialise in the accountancy and consultancy world are themselves gearing up for busy times ahead.

Mark Thomas, a director at recruitment consultancy Marks Sattin, is seeing an increase in business. ‘Without exception, all the firms have moved from hiring a small number of experienced staff to hiring quite significant numbers,’ he says. He is expecting to see an upwards shift in audit recruitment as firms prepare for the busy season over the next few months, with jobs available at all levels, from audit seniors, managers and above. ‘Q1 is traditionally their busy season, in line with a lot of financial year ends, so auditors are keen to be hiring experienced audit professionals now,’ he says.

Thomas is seeing an increase in recruitment across the UK.

‘Regionally, there has been a lot of movement, and we are seeing activity in all of the main city centres and business hubs,’ he says.

Thomas has also noticed an increase in contact with the firms. ‘They are coming out to agencies much more now, they are keen and active to hire more experienced individuals, and its is a signal that they are aware they will be competing against one another again,’ he says. ‘Before, they tended to recruit in single digit numbers, and would try to do as much as possible of that directly, using in-house resources.’

Hotting up

Such activity, Thomas says, is a clear indication that the market is ‘warming up’, and he also accepts that there is a risk of over-heating. ‘If you are moving externally, you can probably ask for at least a 10% increment on the salary that you are on as part of the cost and benefit of moving. For a rival firm to attract you, there needs to be a decent carrot dangled,’ Thomas says. But he agrees with Heron that it is not just about money. ‘It is about the opportunity for development,’ he says, but notes that this is something candidates might be able to get by staying put.

And it is not just the Big Four that are recruiting. ‘We are seeing rising demand outside the Big Four as well, right across the top 20 firms. Some are seeing the changing nature of competition, with increasing numbers of audit tenders, as a threat, but equally as an opportunity,’ Thomas says.

Mark Sheffield, chief operating officer at mid-tier firm BDO, reckons that his firm will be taking on an extra 500 people, an overall increase of some 7% after natural attrition, in the next year. Financial services is a hot area, both in compliance and advisory work, he says, alongside risk and regulation in wider business sectors. Technology and real estate companies are also calling on his firm for advisory work.

He is also seeing increased demand for staff in specialist tax, human capital and private client work. BDO’s offices in the regions are gearing up as well, with growth in cities such as Leeds, Manchester, Birmingham and Glasgow, and there is still plenty of government work to go around, despite the ongoing climate of austerity in Whitehall and town halls.

Sheffield has also noticed a rise in the number of opportunistic applications. ‘We are seeing an increase in applications, particular since our merger [with PKF] which has given us a better brand presence in some of the regional areas,’ he says. ‘The quality of those applications is better than ever before.’

Sheffield is aware that the Big Four will see firms such as BDO as hunting grounds for new staff, but equally he believes the mid-tier can offer something for those that want to pursue their careers away from the giant practices. ‘We are recruiting a lot from the Big Four,’ Sheffield says. ‘Career progression may have been stunted over the last few years, and you hear of promises made followed by further reasons for a delay. People are at the stage where it has been a hard grind for the last five years so they will look to see how they can move their career.’

‘So while there might not a be a lot of people coming into the industry, there will be a lot of movement within it,’ he says.

Smaller firms may be able to give candidates greater career progression opportunities, and the chance to be a big fish in a small pond, whereas larger firms may be able to offer a wider spectrum of niche opportunities.

So as well as fighting for new talent, firms should be looking at how they can keep hold of their existing staff. According to recruitment consultancy Robert Walters, a lack of career progression was the reason given by 50% of professionals as most likely to cause them to move jobs. Some 28% cited a difficult boss as a reason to move, while only 10% said a disappointing salary review would be the main reason to jump ship. Six out of 10 say a good work-life balance is very important to them, while only four out of 10 claim remuneration and benefits to be very important.

Robert Walters also found that some 41% of accountancy professionals believe they should change employers once every three years – given that the recent recession will have put a brake on those seeking to enhance their careers by changing jobs, the news that firms are now in the market for new recruits will be welcomed by those wanting to look for new opportunities.

‘People have been sat in jobs for longer than they would have done normally,’ Thomas says. ‘Attrition rates haven’t been as high as they would normally have been, but we are now seeing candidates returning to the market, together with a growth in headcounts.’

There is also an international dimension to this recruitment drive. As EY points out, its current growth rate is being driven by its clients’ appetite for doing business in overseas markets. As a consequence, three years ago the firm pushed to take on more staff who could speak languages such as Mandarin, Cantonese and Hindi. ‘But we want people that don’t just speak the language,’ Varley says. ‘We are looking for people that have a cultural background in building business in those areas, and for people with existing relationships in those areas.’

EY’s growth plans in the UK are reflected among its network firms around the globe. Collectively, the international network is looking to add 55,000 new recruits and interns over the coming year. Times that by four, and then add some more for the other major international networks, and it is easy to see that recruitment consultants could be in for a busy year.

Philip Smith, journalist

Last updated: 17 Dec 2013