Have you heard? There’s a talent crisis. Which is glorious for those bright-eyed, business-minded college students choosing from any one of countless lucrative career paths right now. But for the gatekeepers of those paths, it means they’ll need to dig deeper into their pockets to secure the talent they need. And we know how much firms hate to do that.
Across the pond, an epic battle for talent is raging between investment banks and Big 4 firms, both of whom offer coveted name recognition but need to bring more than just a resume item to the table if they want the best and brightest.
As investment banks increase junior salaries in a ferocious battle to recruit and retain junior talent, Big Four professional services firms are responding with a few pay rises of their own.
Sources say that at least two of the Four Big firms in London have implemented recent pay rises of £10k ($14k) for managers in their advisory teams. The two firms are understood to be KPMG and PwC.
The going salaries for junior investment bankers in London are now thought to be £60k ($83k), £65k and £70k for first, second and third year analysts, up from £50k to £60k earlier this year.
The article goes on to detail a reality we already knew. Sure, you can make decent money at Big 4 firms, but you’re going to have to invest some time at the firm before you get there.
Even after the increases, however, pay in the Big Four is a lot lower than in banks. One recruiter said the £10k increase brings the going rate for junior managers to £70k, up from £60k previously. However, managers have typically been working for around four years – which would make them an associate in a bank, on a salary of £90k+.
You can find a more detailed chart of bank salaries here, feel free to take a look and then bemoan the fact that time travel is not possible yet, thereby robbing you of the opportunity to go back in time and pick a different career track.
Meanwhile in Australia, firms are getting desperate. Manic even. There’s just too much work and not enough people to do it, which we know has been a problem since the dawn of time, but because the firms chose to never do anything about it, here we are.
The lower number of available foreign professionals, along with growing client demand, has led to a jobs market for experienced advisory professionals described by one recruiter as “manic”.
The big four – Deloitte, Ernst & Young, KPMG and PwC – currently have almost 1000 active job advertisements on business networking site LinkedIn for roles in areas such as auditing, management consulting and IT consulting.
The true number of open positions is much higher with many of the advertisements urging anyone with the applicable skills to contact the firm, while behind the scenes the firms are actively contacting potential candidates and urging them to apply for positions.
As we all recall, firms tightened their belts last March as the global pandemic took hold, only for some to announce record-breaking revenues later in the year. This of course helped maintain partner profit because God forbid partners have to skip out on that summer home just because there’s a plague about. Not all firms that cut staff and/or pay at the beginning of the pandemic did so in order to save profits at the top, with some spreading the burden higher up so that the cuts at the bottom didn’t have to be so severe. Just throwing that out there in case one of you firm owners wants to write me a long, rambling #notallfirms email (you know who you are).
So what’s the takeaway? Well, the talent crunch is very real. And getting serious. Firms need to step up their game if they’re going to compete. All things we already knew, but perhaps it will get serious enough that they stop spamming LinkedIn with job openings and sincerely ask themselves if their salaries are truly competitive like they say they are. If history has taught us anything, none of that will happen and they’ll keep doing what they’ve always done until the situation reaches critical mass and their only option is to change or die. So don’t go getting your hopes up just yet.
As a wise person once said, keep your expectations low and you’ll never be disappointed. Which is a good mantra for those of you going through recruiting now that I think about it.