Will the looming credit crunch stunt practice growth this year?

BDO Stoy Hayward

One key measure of future prospects is recruitment, and if it really is a
sign of things to come those dark clouds seem to have a silver lining, for
accountants at least.

Take the recent results of Michael Page, one of the top recruitment agencies.
Early last month Michael Page revealed that worldwide profits had soared by 37%
and that profits for the UK market witnessed a hike of 19.4%.

Despite the gloomy outlook Michael Page said the UK market was seeing ‘good
levels of activity’ across all disciplines and industry sectors. More
importantly, the agency said it expected to ‘experience strong demand for talent
around the globe.’

So far so good. But what’s the view of the firms? Reports seem to show that
the credit freeze might not bite too deeply. Research by Accountancy Age
showed that the Big Four are in the market to take on 1,000 recruits this
year and there have been a raft of partner appointments in recent weeks.

Firms below the four have been on a recruitment rampage over the past 12 to
18 months with BDO Stoy Hayward working particularly hard to bolster numbers on
the back of efforts to win more work against the largest firms.

But there’s further reason to be cheerful. Across the Atlantic The Wall
Street Journal reports that the number of people taking accountancy degrees has
grown by a third.
As Ira Solomon, head of the University of Illinois’s accountancy department,
said: ‘It’s not the case that as the economy goes down the demand for
accountants goes down.’

And that’s quite true. Firms have indicated that they are strengthening their
financial services teams, they may be applying more manpower to audits in fear
of missing credit crunch imposed anomalies and there is strong evidence that
they expect their business recovery and personal insolvency businesses to grow.

The problem may be how much they lose in a falling M&A market.

Firms usually reassign staff from there to assurance rather than cut
headcount precipitously like the investment banks. But that may not be
sustainable over a long drought of deals.

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