Layoff Watch ’23: Deloitte UK Cuts More Than 800 People Because Business is Slow and People Aren’t Quitting
Reported earlier today by Financial News, Deloitte UK is cutting approximately 3 percent of its workforce or more than 800 people. The cuts are concentrated in consulting, financial advisory, and risk advisory though a few audit and business services folks also got the axe. FN cites slowing demand in the second half of the year […]
Just How Many People Left Big 4 Firms Last Year?
Just how many people left Big 4 firms — voluntarily or not — in 2022? About 56,600 according to this CFO Journal piece published on WSJ this morning. For this year, the number is about 21,400 through June, a 11.6% drop from the same period the year prior. That’s from workplace data analyzed by Revelio […]
Why Won’t You Leave?! Korean Big 4 Firms Have the Same Low Attrition Problem Everyone Else Does
When KPMG US laid off 5% of its workforce last month, the firm’s official statement made mention of “historically low attrition” as a contributing factor, meaning firms were no longer bleeding talent as they’d been just a year before. KPMG was not unique in experiencing this, it’s something we’ve been hearing since late last year: […]
PwC Goes on Record to Say There Will Not Be Layoffs (Not Loud Ones Anyway)
One of the hundreds of local Business Journals wrote yesterday about layoffs in our sector, those layoffs being KPMG’s 5% cut announced Monday, Deloitte laying off 1200 or so people in April, and EY’s 3000 layoffs that coincidentally happened shortly after Everest fell apart but had nothing to do with Everest falling apart (according to […]
Layoff Watch ’23: The KPMG Workforce is Shrinking By About 5% (UPDATED)
Stock photo of KPMG office in London. Look, the logo is the same ok. Update 8.18.23: reports of layoffs in advisory (and memes about them) began trickling out on social media this week. We confirmed with KPMG that these layoffs are the last batch of people let go as part of the 5% reduction in […]
Grant Thornton Layoff Numbers Are In (UPDATE)
Ed. note: We’ve received some additional information about layoffs, see update at the bottom. The other day Grant Thornton sent out a firmwide email packed with words like “difficult but necessary decisions,” “values and culture,” and “continued investment in growth” to inform everyone that heads were soon to roll. While pointing out that “unlike peers,” […]
Carmine Talks About AI Putting HR Out of a Job, Attrition, and a Rough Labor Market
EY Global Chairman and CEO Carmine Di Sibio and King Charles III stan showed up on Squawk on the Street today talking about the labor market and, more notably, how the firm is using an AI chatbot to answer payroll questions. The AI segment begins around 3:05. He also discussed hiring, saying they’ve been seeing […]
Turnover at EY Australia Was Significantly Higher Than Competitors’ Turnover Last Year
One difficult thing about observing and reporting on the happenings at professional services firms is that they tend to be really tight-lipped about internal metrics, attrition, and salaries. They know exactly how many people they’re losing in any given period, we do not. Not so much the case in Australia where the Workplace Gender Equality […]
Deloitte Transparently Informs Us Asians and Males Have the Highest Attrition at the Firm
The 2022 Deloitte Diversity, Equity, and Inclusion (DEI) Transparency Report somehow flew under our radar when it came out in August, probably because Deloitte puts out approximately 263 reports a week and it would be impossible for your average person to read and understand each and every one of them. As the name implies, the […]
Report: IRS Is Doing More with Less, Still Needs More
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In a report released today, the inspector general said attrition and a heightened workload have combined to leave the IRS understaffed.
The new hires in the agency’s small business and self-employed division resulted in a net gain of just 580 revenue officers by the end of fiscal 2010, according to the report. The IRS watchdog predicted a net gain of 127 revenue officers by the end of fiscal 2012. The study could affect the debate over funding for the agency. It comes two days before IRS Commissioner Douglas Shulman is scheduled to testify before a congressional panel on the agency’s budget. The inspector general warned that, unless the IRS is fully staffed, compliant taxpayers are at a disadvantage. “If the IRS does not have a sufficient number of qualified” revenue officers, the report said, “it could create an unfair burden on the majority of taxpayers who fully pay their taxes on time.” [Bloomberg]
The KPMG New York Exodus Picks Up Steam
Last month we touched on a possible exodus starting in KPMG’s New York office with the news that a number of people had given their notice to leave the firm. A few readers were not impressed with the news including Hyperbole:
6 people leave a massive office in an industry that even in a slow year expects 10-15% voluntary turn. I’m all for ripping on the firms, but this is a little ridiculous…
“DAMANGE CONTROL BEGINNING: 26 FANS LEAVE LAKERS GAME AT HALF TIME
EXODUS!!!!”
However, another commenter, blah felt that this was just the beginning:
I believe the exodus is coming. Folks are pretty pissed off these days and there are a lot of career opportunities out there right now for us.
Now, here we are, a month later and it sounds as though the numbers are increasing quickly as we have had multiple sources confirm that approximately 12-15 professionals have given recent notice between the banking and asset management groups – two of the largest in the New York office. The majority being SA2s, SA3s as well as experienced managers.
Our sources have indicated that many more are actively looking and that this is not the “normal attrition” that is expected by a firm. One recent SA that gave their notice was kind enough to send us a copy of their farewell email that sounds – oddly – inspired. After drying your eyes (or throwing up in your mouth), feel free to discuss the latest conga line going out of 345 Park.
Allow me to leave you with a few words of inspiration on this most joyous day:
BLOOD ALONE MOVES THE WHEELS OF HISTORY!
Have you ever asked yourselves in an hour of meditation – which everyone finds during the day – how long we have been striving for greatness?
Not only the years we’ve been at war the war of work but from the moment as a child, when we realize the world could be conquered. It has been a lifetime struggle a never-ending fight, I say to you and you will understand that it is a privilege to fight. WE ARE WARRIORS! Accountants of New York City, I ask you once more rise and be worthy of this historical hour. No revolution is worth anything unless it can defend itself. Some people will tell you accountant is a bad word. They’ll conjure up images of used car dealers, and door to door charlatans. This is our duty to change their perception. I say, accountants of the world… unite. We must never acquiesce, for it is together… TOGETHER THAT WE PREVAIL. WE MUST NEVER CEDE CONTROL OF THE MOTHERLAND…
Deloitte Is Totally Cool with You Jumping Ship
A GC reader from Deloitte emailed me the notes from a recent meeting for management on the health of its staff levels. Our source had the following to say:
I’m a senior in D&T (making manager in the fall) and thought the minutes from a recent manager meeting were interesting in terms of HR’s take on attrition. It does match what you’ve said in your column, i.e. they plan for a certain level of attrition, but I don’t think they even want to consider that there could be a cause for concern.
Management Community Feedback
Retention: Previous S. Manager / Manager Practice meeting unity is seeking additional clarity as to where the firm is heading, in the short term and long term (i.e., economics, compensation, etc.).
HR Audit Update: As of the time of the meeting, specific numbers are not known
DWB: Staff complaints, questions, and concerns, are summed up with the phrase “community is seeking additional clarity.” People want to know what the *#&! to expect in these still-somewhat-unclear times. Oh, and HR? They can run their “numbers” in minutes. Why they were not shared is a mystery; a concerning one at that.
Senior Turnover: Managers feel concerned with the leadership leaving at the senior level – potential for additional turnover in the fall
HR Audit Update: Turnover is comparative to 2 – 3 years ago so not considered a concern.
• Recent increase in the number of seniors that are voluntarily leaving the firm when compared to those trends seen in the last 12 – 18 months
• Region is looking at approximately 75 new hires
• Restrictions on inter-office transfers are being lifted
DWB: A lot to take away from this.
1) Managers are vocalizing the fact that people are leaving; this goes beyond the typical public accounting attitude of “good riddance.”
2) Turnover in 2007 was incredible. Do you remember what the market was doing in 2007?! It was a rip-roaring success. To compare it to that time frame and say it is “not considered a concern” is troubling. The difference between then and now is D&T was hiring like gang-busters themselves at that time so the attrition was not “felt” as severely as it’s being felt now. Layoffs and frozen hiring budgets make the recent staff losses more significant.
3) More people quitting now than during the recession? What research expert included that bullet point?
4) Inter-office transfers being reintroduced is a positive point; expect an announcement about this spun in the HR-style of “woo-hoo, now you can work in St. Louis!” And by St. Louis they mean Branson, Missouri.
What to do?
• Create a positive environment for the seniors and staff
• Leverage personal experiences to keep seniors/staff motivated
• Express advantages a “manager” position can add to one’s career path when looking at long-term goals.
• HR Advisory Update: National recruiting expects a good group in the Mid-West. Comparative attrition trends are taking place even though it may feel that the turnover rate is higher than normal.
DWB: Talking about the glory days of D&T audits doesn’t sound exciting, but sometimes it’s enough of a Kool-Aid effort to keep staff motivated. And look! Attrition rates are right where they want them to be. So all of you on under-staffed, over-worked projects? Yeah, this is the type of environment they plan for.
I’ll let our anonymous tipster finish off the commentary:
At least they might try to “create a positive environment” for me. I’d be really concerned if HR actually believes this or if they just don’t want to panic the managers. (Incidentally, I will be leaving after they give me the promotion.)
Layoff and Exodus Watch ’10: Grant Thornton Chicago and New York Seeing Movement
Two weeks ago, we heard that Grant Thornton’s Cleveland office started their layoffs a little earlier than what on might expect that was followed by an emergency meeting that the content of which is still a mystery.
Now we’ve received word on Chicago and New York who are rumored to be having layoffs and some quitters respectively.
From a Chipman Blog Reader:
I work in audit at Grant Thornton and have heard through the grapevine that offices are trying to keep staff. With the job market improving, it seems like other offices are looking to see if staff/seniors voluntary leave before making any final decisions pre-promotion day. Chicago has let go a partner and 2 senior managers in the audit practice and rumors are swirling of a few staff reductions, which seems crazy given that the current A1 class and the incoming class are so small. For other offices, national is working to roll out a benefit plan practice similar to what Chicago has to help keep staff busy during the summer months but it looks like this is not moving quickly enough….[T]he GT wire is that NY saw 10+ individuals put in their notice recently.
We left messages with both the Chicago and New York offices, neither of which have been returned.
An accountant close to the situation indicated that the partner and senior manager layoffs are part of those mentioned by Stephen Chipman back in January.
At that time, SC said that many of those partners and senior managers were already being notified, so since these most recent cuts knew that this day was coming, it was awfully generous of them to stay on for this busy season (we’re guessing there was money involved).
As far as the the staff situation in Chicago is concerned, cuts at the staff level do seem crazy if the classes are small. Meanwhile, although some attrition in New York was probably expected, at this point, it’s not clear whether 10+ leaving in mid-April is a lot or a little. Keep us updated.
Big 4 Firms Are Planning for Your Exodus
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
& ill 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.