For some time now, Caleb has been touching on the upcoming/ongoing/always-occurring exodus from Big 4 into the private sector. The obvious reasons for the change from public to private are obvious, but here’s a few for kicks:
• Bigger pay day (and potential growth)
• CPA requirements completed
• Actual work/life balance
• Specialized skill set transition to a new career
There are other reasons of course, but it is the ferocious combination of these that leads to the breaking point – low morale.
Going Concern received an email from a distraught and burnt out Big 4 auditor from the Southeast region:
The level of morale in the [XYZ] office is at an all time low. Discussion with low level staff, through managers, have yielded the same opinion of overwhelming expectations without the needed support from the firm. They want us to draw blood from a turnip, and they want it done better, faster, and with less resources than last year. This has caused everyone to start exploring options in the market. A vast majority have started fielding resumes and contacting recruiting firms. The select few who have made it past that hurdle are interviewing with no looking back.
Not to downplay what this auditor is saying (and I’m not), but this sounds like the unfortunate reality of many auditors working on smaller, non-public clients. You know, the not-as-sexy-as-ABC Bank but just as important to the firm’s bottom line. You won’t get tickets to the pro sport’s game, but thankyouverymuch for your efforts.
The reader goes on:
Primarily, people have expressed their interest in holding out any real intentions of leaving until promotions roll around in the later part of the summer. They’re hoping that maybe there will be some juicy 20% raise waiting for them, but the stark reality of a measly 5% raise is what they know is coming. Any fifth year Seniors who are waiting for the promotion to manager are just using it for resume purposes.
Our offices are already using under qualified second year staff at the Senior level, as well as retaining new managers in the Senior position because they are extremely understaffed at that level. This, in turn, is causing all of those people to take measures to leave perhaps after busy season and certainly after the insulting promotions come through in August.
It’s a matter of time before this individual (and half of their respective office) becomes another statistic that the Big 4 HR guru’s term “natural attrition.” From an HR perspective, here’s a loose idea of the attrition formula:
Fall 2010: 100 new hires
Fall ’11: 95 new hires become “2nd years”
Summer/Fall ’12: 88 2nd years promoted to senior staff, 70 seniors remain
Summer/Fall ’12: 2 years of public experience reached, 55 seniors remain
Summer/Fall ’13: 45 seniors remain
Summer/Fall ’14: 35 seniors remain
Summer/Fall ’15: 25 seniors remain; 15 promoted to manager, 10 remain on as seniors
Summer/Fall ‘XX: 10 senior managers are eligible for partner
The recession stunted this formula for every firm, as they were forced to make cuts, not only for cost cutting purposes, but also to keep their staffing formulas close to being in-check. But think about it – your firm expects this kind of turnover. They know it’s a matter of time before their hiring class is whittled down to 10% of its original size.
And in the case of the reader, their firm dropped the analytic ball 3-5 years ago. Had they better estimated the percentage of projected losses, there would be more seniors to handle the work.
Remember that time you felt bad about leaving? They’re waiting for you to do so.