Last month’s defection of a 16-strong Deloitte transaction services team to bitter rival KPMG sent shockwaves through the industry and highlighted a serious issue currently plaguing accountancy – the skills shortage.
This year’s Accountancy Age Top 50 accountancy league table reveals that firms’ profits are, on the whole, rising again. But while the prospects for the world economy are good, the black cloud of a serious skills shortage continues to dampen enthusiasm about the economic upturn.
How to recruit in time to meet increased client demand is the burning question on the lips of those in the business of human resources and the dearth of qualified staff is already influencing how firms recruit.
Some are coming up with innovative ways of developing teams, while others are using a less conventional, but equally tried and tested method – poaching.
Deloitte insists that the loss of its 16-strong transaction services team has caused no damage. The firm says its private equity department remains ‘strong’, despite the loss of four partners, two directors, four associate directors and a number of managers.
But, while it may provide an answer to an obvious problem, poaching staff can be fraught with difficulties, as the ‘gang of four’ discovered for themselves.
The four partners became embroiled in a legal dispute with their former employer after quitting Deloitte in November 2003. They disputed being bound by the extent of the notice period and restrictive covenants included in the firm’s limited liability partnership agreement in July 2003. The court upheld Deloitte’s partnership agreement.
Clive Davis, regional manager at Robert Half Finance & Accounting, advises building up a contingency for legal fees that arise in situations such as those in the Deloitte case.
On top of the dangers of legal wrangling, there are other more personal aspects to consider. Martyn Sloman, training, learning and development adviser at the Chartered Institute of Personnel and Development, offers some words of warning.
‘Individual success is about the context in which a person is working. You can’t always assume that a high performer will work as well in a new environment,’ he says.
‘How people choose to perform is more important than what they’re told. And how they choose to learn is more important than how they are trained,’ says Sloman. ‘It’s all about individual volition.’
Sloman emphasises the importance of developing a culture and environment where staff are comfortable enough to improve on their skills.
‘If you can poach staff in the short term, in the long term it’s all about creating the right environment and culture,’ he says.
But despite the drawbacks, there is a strong argument for poaching. ‘The positive side is that it’s rapid, it’s a show of force and you may end up attracting other people, as it’s impressive to pull away a whole team,’ explains Davis.
But it is not the only method. Those firms that were able to retain their graduates when many firms were waving goodbye during the downturn in 2001 have been busy nurturing their novices ready to place them in the thick of it when times improve. Others are frantically trying to attract the best people with better opportunities and higher salaries.
Deloitte recently won kudos for developing an innovative team with an unusual mix of people. Last spring, the Big Four firm formed a research and development tax team dealing with all aspects of R&D tax relief claims on the back of new legislation.
The unusual approach won the firm this year’s award for the best tax team at a large firm at the LexisNexis UK Tax Awards.
David Cobb, head of R&D tax services at Deloitte, explains: ‘In terms of recruiting, there were no people in the UK who had the experience we needed as it was wholly new.’
Cobb found that recruiting for the specialist team was more effective through bold advertising than through recruitment agencies because the team’s concept was new. But there were teething problems.
The team is made up of engineers, scientists and tax specialists, so getting a group of people from widely different backgrounds to work together in a new environment was ‘fun, in the liberal sense of the word’.
With hindsight, Cobb says that next time he would spend more time establishing, in advance, the methodology and framework in which the team works.
Davis says the benefits you can look forward to when building a team from scratch include loyalty and fewer problems with institutionalisation and change management.
These are all questions that recruiters at accountancy firms of all sizes will have to consider as the economy grows and the skills shortage bites even deeper.
With economic prosperity comes increased recruitment. Firms began the year with a round of hiring, which has continued unabated across all disciplines and practices. It is a much-needed boost after two years of redundancies and all-round belt tightening.
But regardless of the methods employed, some see evidence of mass poaching as an encouraging sign.
‘The good news is that it’s a positive indicator of what is happening,’ says Davis. ‘It’s been years since we’ve seen wholesale poaching.’
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements