The Big Four have been like triumphant elephants on campus this year. All report that recruitment has been easier and their timetables to fill graduate intake quotas are far more advanced than in previous years. Accountancy, it would appear, is once more in vogue.
While PricewaterhouseCoopers has already completed its recruitment of 1,000 soon to graduate, Deloitte is nearly at the same place with its 1,000 target and way head of last year, having experienced a 25% increase in applicants. KPMG, meanwhile, is also ahead of its timetable in recruiting 830, as is Ernst & Young in its quest for 600 graduate recruits.
All four cite various reasons for this good fortune. For Charles Macleod, director of recruitment at PwC, it’s a simple supply and demand equation. ‘10% of graduates say they would consider a career in accounting. That means there is a pool of 35,000, which means there are a lot to choose from. I think graduates are getting much cuter about getting their applications in early. It’s all part of the competitive world.’
PwC feels that its appearance in various polls and competitions as one of the most enlightened and high-profile campus recruiters does it no harm. In fact, all the Big Four make great efforts to sponsor and dominate many aspects of student life so that when it comes to career choice they will not only be acceptable but high on the list.
The battle for campus profile has become so competitive that KPMG flies blimps and carries undergraduates around on rickshaws while PwC illuminates university buildings with its logo. This year 10,000 students applied to Deloitte of which 3,000 were seen and 1,200 offered jobs. PwC says that, of those it offered jobs to, 95% accepted and KPMG’s acceptance rate is 90%, up from 87% last year. Ernst & Young, meanwhile, has an 85% acceptance rate and this year had 16,000 applicants. Many years of heavy investment in graduate recruitment appear to have paid off. In brand terms, both the profession and the Big Four are highly desirable and high profile.
Accountancy is not always been flavour of the month. Susan Newton, head of HR for tax and people services at KPMG, says the dotcom bust played a major role in making it once again fashionable.
‘Four years ago we all found it difficult to recruit because of the dotcom boom. That failure has underlined how important it is to get a professional qualification, especially one which is flexible and can help you wherever you make your business career.’
It is something of a triumph, or maybe a most glorious self delusion, that all the Big Four feel that they are seen as creative, interesting and highly popular career destinations for modern graduates. They are all winners of various recruitment awards and prizes, which show that their efforts have not gone unnoticed.
Charles Macleod speaks for all the Big Four on the campus experience when he says: ‘Graduate recruitment is not a problem area. We are getting the right mix of both quantity and quality.’
Mark Molyneux, managing partner ‘people’ at E&Y, adds: ‘We are all fishing in the same pond and therefore experience the same conditions. Strategically, recruitment in the graduate market has not been a problem for some time, and our pipeline has been full for some years. We have a summer internship programme for 100 and we are expanding that, which also helps keep the flow.’
The Big Four are also looking to tap into a modern generation that is far more career focused than previous ones.
Early applications, CV doctoring, far more interest in placements and internships and a desire to achieve a marketable professional qualification are all very much part of that trend. Their position, especially on the top 20 campuses, and their genuinely innovative efforts in making the profession more noticeable and attractive have created a momentum.
Interestingly all the Big Four make a big play to the 20,000 or so applicants (many apply to several firms) of how high their ethical, professional and socially responsible standards are. This, they feel, is doubly important as corporate scandals placed accountancy under very critical scrutiny.
The fact that, post-Enron, there has been no let-up in the interest among undergraduates for the profession shows that either the Big Four have been successful in distancing themselves or that undergraduates are more cynical than many supposed.
‘I don’t want to sound complacent,’ Macleod says, ‘but problems, what problems?’
But the retention of newly qualifieds is something else. Overall total staff attrition rates are nothing particularly worrying – at PwC it currently stands at around 12%, compared to 15% at Deloitte, 14% at KPMG and 17% at E&Y. There is scepticism among the competition about the PwC figure. ‘I can understand their feelings,’ Macleod says. ‘We have done well.’
But among the newly qualified, even at PwC, attrition stands at around 30%. And that’s an historically low figure. David Sproul, Deloitte’s managing partner of talent, says: ‘We know on qualification we are going to lose a certain amount – our model allows for that. We recruit bright people and train them well, so they are bound to be attractive to the market. The fact that we have got our loss rate down to 30% – it was 35% last year – is because we are really focusing on this area.
‘We emphasise how much value add we can offer in terms of career development, how much each year with us really counts in terms of professional development. Because we have a large consultancy division we can also show how much else we have to offer.
‘Research shows that the finance directors of the FTSE100 companies are all accountants who didn’t leave professional practice at the first opportunity.’
Newton stands by the ‘improved’ graduate attrition rates. ‘One of the reasons we have got better at retaining the newly qualifieds is because we have become better at selling a career in auditing.’
But last week’s Accountancy Age/Robert Half Accounting & Finance salary survey showed that firms still have a long way to go. Three quarters of respondents in audit revealed that they struggle to recruit people with the skills they need.
Nonetheless, communicating the benefits of staying put is an area where all the Big Four have became very proactive. At KPMG, they talk about refining management so they can communicate to the newly qualified the advantages of staying with the firm.
At PwC, they make a big point of spelling out exactly what their financial package on offer really means. Too often the car, the medical insurance, the holidays and the rest are forgotten as the newly qualified only looks at the pound signs on the salary cheque.
‘Coming back after the summer is a big time for career decisions and movement,’ Macleod says. ‘It is then we make a lot of secondments around the firm to add interest and excitement.’
Over at E&Y, Mark Molyneux denies that newly-qualified staff leave the firm simply because they have completed their training. ‘They have their own career agenda and ideas. Around 40% of our newly-qualified leavers last year were not going to another job, but to what can only be described as gap-year experience, either because they didn’t have one the first time round or because they enjoyed it so much the first time round. They are confident enough to know that they will get a job when they return.
‘We have accepted this fact and will now allow people paid time off for them to explore their dreams. We have become more flexible and our retention rate is showing significant improvement. It’s definitely something we are focusing on.’
One of the reasons that recruitment is not quite the problem it once was is because of the increasing role that HR plays within the firms. Management, motivation and career development are now seen as mainstream, boardroom concerns for firms who once thought these matters were best left to the individual.
But as far as retention goes, the Big Four are always pushing water uphill. Sure, they have their own broad-based practices that allow all kinds of development and experience. But as those recruiting finance directors point out, it is the time spent in industry especially with blue chip companies that the recruiters are most interested in.
As one headhunter put it: ‘Time spent in the professional firm is training; time spent in industry is the real thing. If an accountant wants a career in industry, the sooner he leaves the better.’ It’s statements such as this one that make current retention rates all the more impressive.
If recruitment of graduates is now just a question of well-run fishing fleets trawling through campuses elsewhere, the Big Four do have problems.
Ernst & Young admits it is short of senior audit managers and it’s not alone. With increased regulation and a healthy stock market both fuelling demand, the Big Four are having to pull out all kinds of stops to recruit at more senior levels.
Newton says the KPMG’s approach of casting a wider net has paid dividends. ‘We find that at a more senior level, recruiting in South Africa, Malaysia and Singapore has two effects. It means we are not directly competing with the other Big firms and also we improve the diversity in the firm which makes us more attractive both to graduates and our clients.’
‘This is a harder market because, unlike with the students, you have to go to other firms, banks, corporates and abroard to find the people you want. This means headhunters, which always complicates the process,’ says Molyneux.
‘There is something of a shortage among experienced accountants, there is something of a spike in demand at a time when, because of the slowdown in recent years, the supply is limited. Having maintained a large consultancy practice helps us in this market,’ says Spoul.
Over at PwC, the bullish tone continues.
‘To address this mature accountant market we have been very creative. We have advertised at stations and airports and even on sandwich wrappers. This not only gets our message across but reinforces the idea that we are interesting and innovative – the kind of firm people want to work for. The result is we are getting something like 200 applications a day and we need to recruit only 500 a year. Among this group we are getting acceptance level of 75%. Others may have problems.’
There is, therefore, something of a myth that the modesty of accountancy allows – that the profession is unattractive and the Big Four find it difficult to hold onto people. Of course in any market specialist skills are at a premium and have to be fought for.
The idea that accountancy practice would pay its people to take three months off sunning themselves in the Far East would be preposterous if that wasn’t so. But it’s just another example of the profession – and the Big Four in particular – being equal to the market pressures it has to face.
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