by Melissa Klein
The soft economy, the fallout from Enron, WorldCom and other scandals, and the effects of the Sarbanes-Oxley Act appear to be having a positive impact on the accounting profession - in at least one aspect.
According to partners at accounting firms nationwide, and to the latest industry hiring statistics, the combination of those factors appear to have eased the staffing shortage that has plagued firms and the profession over the past several years.
While finding and retaining qualified staff was the top issue for firms for the seventh straight year in the 2002 Management of an Accounting Practice survey, MAP Committee chairman Neal Harte said that, since last year’s survey was conducted, “there’s been a slight uptick in that area.”
“There’s been an increase in accounting enrollment in colleges,” said Harte, executive vice president and vice chairman of Boston-based Vitale, Caturano & Co. “Because of the economy, fewer students are looking at finance and other glamorous majors. And, as the profession gets more publicity with Sarbanes-Oxley and the fallout from Enron and WorldCom, more people are looking at the profession and realizing that there are opportunities. They’re also realizing that the profession has more responsibility with the enactment of the legislation.”
And while CPA firms aren’t rushing the gates to hire just yet, the outlook is improving, according to Wayne Mello, executive director of Robert Half Finance and Accounting, a division of staffing giant Robert Half International. Their latest Financial Hiring Index showed that, while most chief financial officers don’t expect to hire accounting and finance professionals in the third quarter, they don’t expect to make cuts either.
Among 1,400 CFOs surveyed, 85 percent anticipated no change in hiring for the third quarter, while 5 percent planned to add staff and another 5 percent expected reductions. The remaining 5 percent were undecided.
“For the balance of the year, I think we’ll see it slowly getting better,” said Mello. “The overall feeling may be that we’re going sideways, but we’re going forward slowly.” Mello also credited Sarbanes-Oxley as having a positive impact on the profession by putting accountants in the spotlight.
“People are looking at what accountants do more closely. There’s much more focus on the industry, and that’s a good thing,” Mello added. He also noted that the hiring time frame has gotten shorter. “As companies are starting to feel more comfortable with the economic conditions, they’re not taking as long to make hiring decisions,” he said.
Hinting that they’re optimistic about an economic recovery, among those CFOs who said they plan to hire in the coming quarter, 52 percent cited business expansion as the primary factor.
Buoyed by industries that continue to perform well in the tough economic climate, the East South Central and Mountain regions expect the greatest rise in hiring during the third quarter. Eight percent of CFOs in these areas plan to add staff, while 3 percent expect cuts, for a net 5 percent increase in both regions.
Strength in the health care industry is driving demand for medical billing and collections specialists in the East South Central region. Manufacturing is also growing, as auto makers move forward with new plant and expansion projects, generating the need for professionals with cost-accounting expertise. In the Mountain region, home building and sales, mortgage refinancing, and property management are driving demand for bookkeepers, property accountants, mortgage lenders and loan processors.
With low interest rates continuing to fuel refinancing and residential real estate activity, professionals at all levels with real estate, property management or construction industry experience are also in high demand, Mello said.
The demise of Arthur Andersen proved to be a boon to Harte’s firm, which hired a total of 35 former Andersen employees in 2002. Vitale, Caturano, ranked 58th on Accounting Today’s 2003 Top 100 Firms List, with $26 million in revenue, has 183 employees, including 26 partners. In addition to the Andersen hires, a July 2002 merger with Harte, Carucci & Driscoll bolstered its staff by 25 employees.
In contrast to prior years, staff turnover wasn’t an issue last year at New York-based Rosen Seymour Shapss Martin & Co., according to personnel director Don Leavy. “In prior years, it was really bad, but last year we didn’t lose many people at all,” said Leavy. The firm doesn’t have plans this year to expand its staff, which stands at 140, including 17 partners. “We don’t foresee hiring this year unless people leave,” said Leavy. “We can handle the normal growth of firm with the staff we have. We’re at a comfortable level.”
He attributed the ease in the staffing crunch at least partly to the soft economy. “When the economy is good, the midsized firms lose employees to big firms or private industry,” said Leavy. “The big firms and private companies aren’t expanding right now, so midsized firms aren’t losing people. When the dot-coms were doing great a few years ago and the financial companies were doing fantastic, we were losing people left and right.”
Leavy noted that his firm has taken steps to ensure that its talent stays in house. RSSM, ranked 85th among the Top 100 with $19.2 million in revenue, sets its minimum number of hours during tax season for all employees at 50, which Leavy said is lower than the 55-hour minimum that many firms in the area require. It’s also lower than the average 54-hour busy season work week reported by the 995 firms that participated in the 2002 Recruitment & Retention Survey by the American Institute of CPAs.
“We try to keep a balance of life and work for our staff. That’s one of the reasons people leave public accounting,” said Leavy. “They get burnt out during tax season.”
Three years ago, the firm began a tradition of closing the office during the first weekend in March to give staffers a break. The firm also expanded its benefits, adding a flexible spending medical plan and increasing its 401(k) plan contribution match. Leavy said that the firm is also considering adding a dental plan.
Gumbiner, Savett, Finkel, Fingelson & Rose Inc., in Santa Monica, Calif., will add at least four people to its 92-member staff during the summer months to replace employees who left the firm during tax season. Three staffers moved out of state, while others left to join Big Four firms, said chief operating officer Michael Savoy.
“We do a lot of tax, as well as accounting and audit. If people want to do only accounting and audit, and no tax, we lose them to the big firms,” Savoy said.
The new hires are all recent graduates, in keeping with the firm’s strategy of hiring students straight from accounting schools. “In prior years, we’ve had difficulty hiring at senior levels because when people come from different firms there may be cultural differences, or they say they’re better than we found them to be,” Savoy explained. “So, now we try to hire employees straight from school and grow them within firm. It’s been successful for us in the last few years - we’re about to make six promotions.”
To help talent stay put, training is a top priority for the $13.62 million firm. GSFF&R spent over $100,000 on staff training last year, not including the time that the firm gave up in billable hours, and the firm will spend the same amount this year, Savoy said.
For the first time, the firm also added a bonus pool specifically based on tax season performance this year. The firm agreed to pay every employee a bonus if the firm equaled its production from January to April 15, and to increase the amount as productivity increased. Savoy said that the firm succeeded in beating its performance over 2002. In addition to annual bonuses and raises and a 401(k) match, the firm added long-term disability benefits this year.
To help keep new and prospective employees happy, Miami-based Morrison Brown Argiz & Co. is instituting flexible work hours in some departments, according to managing partner Tony Argiz. The $20.3 million firm, which ranked 82nd among the Accounting Today Top 100, plans to add to its 121-person staff during the next six months. Argiz said that he expects hiring to be easier than in recent years because of the economy and the firm’s increased flexibility.
“At the end of the day, people want to be treated professionally, paid fairly for their work production, know that the firm is making an investment in their development, and feel that they are an integral part of the team,” said Argiz.
