Letter to the Editor: Small Firms Are Suffering in This Market, Does Anyone Care?
We received the following from a small firm owner who is suffering under the weight of talent shortages, massive workloads, and hoards of would-be clients shopping around because their accountant (rightly) raised their fees. What’s a small firm to do? I have a small firm in [redacted]. I have been reading constantly about how the […]
What Do We Make of the Headcount in Deloitte’s Los Angeles Office?
Our tipster had this to say, “No wonder they are getting rid of PSW [Ed. note: he/she is referring to this], there are more partners than junior staff! Where the hell is the leverage model? This is beyond completely ridiculous.”
Posted on the Green Dot’s internal interwebs:
Did you know?
The Los Angeles office represents 55% of the PSW region in terms of headcount:
Los Angeles Headcount Partners, Principals, and Directors 195 Sr. Managers and Managers 407 Senior/Senior Consultants 304 Staff Consultants 188 Junior Staff/Analysts 141 Client Service, Admin, and Other Support 271 TOTAL 1506
Technically, the combination of “Staff Consultants” and “Junior Staff” exceeds the PPD number although that but that puts the ratio of 1.69 staff for every PPD. I’m no expert but that could be considered low. It’s safe to say there are a few big engagements in L.A. that demand more than 1.69 staff people which probably leaves the small jobs shorthanded. Anyone in Deloitte L.A. (or anywhere else for that matter) feeling the pain because of this? Let us know in the comments.
What Happens When the “Numbers” People Can’t Count?
There was some quiet chatter here at GC about Ernst & Young’s closure of its Greensboro, NC office this past December, right around the Merry Happy holidays. Thanks Ernie.
This is nothing new. Smaller offices have been getting shut down for years. Years. Years.
You’ll probably find this to be a shocker but your feelings are not the main problem facing the firms due to the combination of recent closings and endless rounds of cuts. The problem is – it’s the theme of any busy season – firms finding themselves short staffed.
Many readers have commented that engagements are understaffed heading into the cold winter months. Albeit this is typically the unofficial “norm,” but slashed fees are only compounding the problem this year. The troubles of ’09 will be used as firm scapegoats for 2010. Move along, kids. Nothing more to see here.
Serious trouble is brewing for at least one Big 4 firm, however. A source confirmed that their Big 4 Beast is outsourcing work in the Carolinas to smaller regional firms because they are so understaffed:
The combination of layoffs a year ago and people leaving now that the market is turning around is causing the firm to hire outside help just to get through busy season.
Ummm. How did this happen? Is this firm (or any other firm for that matter) initiating rotations from staff “heavy” areas like Chicago and New York to cover the lapses in smaller areas like Buffalo or Greensboro? If so spread the winter cheer, because that sounds downright awful.
The public accountant’s mind is a simple one with regards to job searching:
The market is moving ever so steadily from red to green. This time is now, and no one, not even leadership, is denying that. Firm leaders have been talking, talking and talking some more about the upswing of 2010. If they are handing out the Kool-aid, doesn’t SOMEONE take a moment to think, “Hey guys, should we really have cut so much staff six months ago?”
Someone, somewhere underestimated staff needs or overestimated staff loyalty. Or both. So now, cutting into the already razor thin fees will be the misguided expense of hiring outside help just to get by. The situation is only going to get worse in the coming months; money is starting to move, financial firms are beginning to reinvest, and jobs are going to be created and filled by your colleagues.
How can a firm’s leadership whose fundamental – and societal stereotyped – sole function is numbers be so off the mark? This is elementary, is it not?