Being interesting can be overrated. Accountants became suddenly intriguing in 2002 with the spectacular collapse of Arthur Andersen, because of its involvement in the scandals surrounding the fall of Enron. This added unwanted colour to a grey profession. Since then the surviving titans of accountancy—Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC), also known as the Big Four—have mostly retreated back into the shadows of public awareness. But interesting they remain, above all for the way they manage their people.
It is not just that they collectively employ some 500,000 people around the world. Many companies are as big as they are. Unlike most, however, the Big Four really mean it when they say that people are their biggest assets. Their product is their employees’ knowledge and their distribution channels are the relationships between their staff and clients. More than most they must worry about how to attract and retain the brightest workers.
Time is regularly set aside at the highest levels to chew over how best to do this. Detailed goals are set: Deloitte’s 2010 business plan includes targets for staff turnover, the scores it seeks in its annual staff survey and the proportion of female partners it would like to have. Partners are increasingly measured and rewarded as managers of people, not just for the amount of money they bring in. People-related items account for one-third of the scorecard used to evaluate partners at PwC. KPMG’s British firm has introduced time codes so that employees can account for how long they spend dealing with staff matters. The idea is that those who devote lots of time to people-related matters are not disadvantaged as a result in pay rises and promotion.
The Big Four are by no means perfect. The sheer numbers they employ can still make them feel like sausage factories. Small firms are quick to take advantage of that when recruiting. Nevertheless, the big firms’ evolving efforts to attract the best candidates and to encourage and keep the brightest people provide useful lessons for other companies.
The most intractable problem is that there are never enough skilled or promising people to go around. Just as competition for the best of the bunch is growing, the pool of available talent is changing. In America baby-boomers are flooding into retirement; in Europe the market is greying; and in India and China the large number of graduates masks low numbers of truly high-quality candidates.
There are added problems for accountancy firms. Job cuts earlier in the decade created a shortfall of people now. Regulatory changes, such as America’s Sarbanes-Oxley Act, have boosted demand from clients not just for accountants’ services but also for their staff. To add to their difficulties the Big Four are now aggressively re-entering the field of advisory services, necessitating a new burst of hiring. Ernst & Young is not unusual: it hired some 25,000 people in 2006, but expects to hire 30,000 this year and 35,000 in 2008.