August 16, 2022

offshoring

Are Accounting Firms Really Sending 30% of Their Work Offshore?

In the past several weeks we have heard — and read — about huge amounts of work getting sent offshore. To India mostly, also the Philippines. Outsourcing is nothing new and rather expected given today’s talent shortages but 30%? Perhaps more? Doing a quick search pulled up a 2011 Accountancy Age article which mentioned PwC […]

Layoff Watch ’21: EY Gave Client Technology Staffers a Parting Gift As They Were Being Kicked to the Curb

Before we recently learned what was happening behind the scenes with workplace services staff and on-site technology support employees at EY, we got tipped off from someone in client technology that his/her and others’ jobs were being eliminated or offshored. After a couple of weeks of not hearing anything else about what was going on […]

Accountapocalypse: Let’s Talk About Offshoring

I’ve touched on offshoring in a couple of my previous articles, and it seems to have gotten some attention. While offshoring is prevalent in top firms it's not standard practice in the rest of the profession, it has certainly been gaining momentum. I fully expect this trend to continue, and here’s why: Barriers to offshoring […]

What If 20 Percent of Audit Work Was Performed Offshore?

You may have heard that accounting firms – primarily Big 4 firms – have been slowly transitioning work to countries like India and Sri Lanka. This particular topic of discussion typically results in a heated/subtly racist conversations about “foreigners taking American jobs” which eventually evolves into a more overtly racist conversation, not unlike what happens on some Deloitte forums.

ANYWAY, just how much work is being sent offshore? The FT reported some recent projections that the UK’s Financial Reporting Council (“FRC”) found for PwC in the UK:

In an annual inspection report, the FRC said the UK arm of PwC might move as much as 20 per cent of its core audit work to Calcutta by 2014. Less than 2 per cent of its work was offshored in its last financial year.

“On the face of it, 20 per cent of an audit being done without any face-to-face contact with the client seems high,” [FRC Director of Audit Paul] George said. He added that all the large UK audit firms were considering offshoring to cut costs but had so far only shifted a tiny fraction of work overseas.

That “20 percent” has a few people concerned and the FRC is looking into it. Granted, this is just an isolated example to audits at PwC, so obviously your offwhoring experience would vary from audit to audit and also for tax and advisory services. And lest you think this is all about money, the article quotes a flak from P. Dubs as saying, “The driver for us was not a reduction in costs. It is an improvement in quality.” O RLY?

Since many of you have worked directly with this process, you may have a difference opinion with this statement and one tipster – who is interested in hearing other people’s offshoring tales – details his:

My experience with this process has been horrendous. Don’t let comments in the article fool you, we are required to send a set amount of hours overseas to be performed by our shared service center. A process that would originally take 1 hour to start and complete (think bank reconciliations) now takes 6 hours. Nothing like writing instructions on how to perform a simple process and receiving a phone call from someone who barely speaks English to ask you how to perform the test. Or receiving a bunch of garbage and re-doing the work yourself.

Teaching someone how to do something, who has presumably never done it before, is difficult. Teaching someone how to do something, who has presumably never done it before, over the phone is worse. Teaching someone how to do something, who has presumably never done it before, over the phone, whose first language is something other than English is maddening.

Arguably, offshoring has benefits but if this trading 1 hour for 6 hours is fairly standard, then quality certainly isn’t one of them. Of course for a firm flak to say otherwise is grounds for a severe beating from his/her superior. The mere idea of trading 1 hour of work for 6 hours is enough to make a manager lose their shit unless the 6 hours are significantly cheaper. Then there’s the whole “client service” thing which is tricky from the get-go. How do you best explain the increased hours and/or the fact that you’re waiting on something from “the offshore team” that’s ordinarily slapped together in a few minutes?

Clearly, this “20 percent” is a shot in the dark but it’s definitely enough to make someone say, “OH HELL NO. NOT ON MY ENGAGEMENT.” But it’s not impossible that some of you have a grand time with the offshoring, so either way, you should let us know.

Watchdogs probe ‘offshoring’ of audit work [FT]