Our CA profession is in grave danger

What you start thinking when you hear news of some foreign accounting firm taking over a small or medium scale CA firm or any other such professional firm. When you hear more and more chartered accountants are joining Big Four or Big Ten firms (most of them are foreign companies). Can you think of these incidences as wake up calls for our profession?

If no, then I am sorry, we are in grave danger. (First mistake is that we are not realizing it). 

Even if you think it as wake up call, we are still facing that challenge ahead of us. We have to move mountains to face that challenge. Now, let me not puzzle you for longer and come to the point.

There was a time in history of developing India when multinational companies started coming to India and with their world class technology and work culture, they progressed in leaps and bounds. After a passage of time, somehow, we were able to insulate ourselves from the grave repercussions that lie ahead. (Don't worry, we still have to face it now even if we have given deaf ears to the problems).

But, here I want to make a different case, I want to talk about the problem that lies ahead of Indian Accounting Profession. The probable victims are Indian Chartered Accountant practitioners. (If we don't take steps at the moment, this moment, right here, right now).

Now, let’s analyze what is missing in our profession. First and foremost problem is that we are not building people oriented, people centric, people caring organizations (whether its small or large, whether it’s a service industry or manufacturing industry. Of course, you will find few exceptions).

Hence, the cycle of depression in our profession begins. Here we go. Let’s see what exactly happens.

Step 1. Dissatisfied employees lacks happiness.

Step 2. Unhappy employees cannot innovate or work full-fledged on creative work and bring around new ideas. (Happy employees are 12% more productive than normal employees – http://www.theguardian.com/science/2010/jul/11/happy-workers-are-more-productive)

Step 3. Lack of innovation and deficient employee morale leads to sub-standard services (Concept equally applicable in manufacturing industries)

Step 4. Step 1-3 leads to lesser satisfaction of clients and customers and results in lesser turnover and lesser progress of your organization. 

Step 5. Your customers and clients start searching for better products and services. And eventually finds out that your fellows are suffering from same problems. And ultimately finds out that Big Ten foreign firms are very efficient and they charge hefty fees. But gives better services. (of course, who will be willing to take bath with an Indian soap when you get a Quality soap at a little higher price,  people don't think much about price when there is a quality concern). Stressing on selection of foreign firm’s services does not mean they are smarter than us. Who runs their firms after all? Are they all white people? No, they are like you and me.  Foreign version of Indian people like all of us. We run the MNCs in India and all over the globe. Where you don’t find Indians working, just keep in mind their government is fearful about our presence (like Obama who did not allow Modi to come to United States, lol). We should be proud to have smarter brains than any other kind of people around the globe. (Sorry, am not sure about Japanese people, LOL).

Step 6. Results of above steps - foreign exchange outflows and slow growth of domestic players.

Step 7. Slow growth of domestic players makes them think to go for merger with a big corporation (I don’t know what must be the reasons and what they must be tempted by, but the discussion requires another write up. Will think and give it here for benefit of all). One of the reason they feel is they think they cannot compete big MNCs. It’s better to join hands and earn out of the association. (They don’t realize that ultimately who suffers? Our own business community which will pay hefty fees of the MNC professionals).

Step 8. Takeover by multinationals adds further problems in economy. (Of course, only if the MNC is optimistic about the takeover and expects to earn in millions, then only they will go for the takeover, don’t think you have made fool of them. It can be a reverse scenario.)

Step 9. Above all steps results in existing employees woes. Fears haunts them every now and then. They starts thinking that there are blink chances of progress here, let’s move away. But they will observe that all domestic firms and organisations are working on the same principles (profit centric principles, all for themselves, nothing for others). Then he will feel, let’s join hands with Big Ten. (Just like small and medium firms does), at least I will get a better paycheck if not satisfaction of work, if not recognition.

Step 10. We have been worrying about brain plight from India to Foreign countries (for last two three decades and at present also). And now, on this day, more and more MNCs are coming to India, hence we are giving deaf ears to the brains that joins MNCs day in day out. (I don’t know whether I am making the point clear but I feel, the same can be called as brain export. And the brain works for a foreign company. The difference is just that the brain is resident and not an NRI.)

Note:- Very serious note from me, my personal views - Presence of MNCs or MNC service providers like big ten firms does not mean we, small and medium practioners are not capable to provide world class services. Of course, we can.

But

“kuchh paane ke liye kuchh karna padta he, kuchh khona padta he, kuchh an-dekhe sapne dekhne padte hai, kuchh mushkile jelni padti he, kuchh anchaahe kadam uthaane padte he, kuchh naye khwaab sajaane padte he, Insaano ki kimat samajni padti he”

Inputs should be world class in order to match outputs to the world class. Our inputs are our people, our employees and our ideas, our employees’ ideas and creativity and innovative capabilities.). When we start recognizing them, valuing them, the days are not far when we will soon become world class and Chartered Accountants will join the small and medium firms leaving behind the glamorous MNCs. (I hope, you are not facing a situation at this moment where some of your young chartered accountants are joining big four and waving you good bye)

Before the situation goes out of control, we should work towards solving it. I think it's late, but its better late than never. We can make a difference, if we think we have to. You can contact me anytime for a detailed discussion about the possible solutions for this. Presently, I am not charging anything for sharing my ideas. Lol. It’s a social project for me, I feel it’s my responsibility to save my profession. Will surely think on possible solutions and will give a detailed article once again.

Ernst & Young, PwC, KPMG and Deloitte to hire 43,000 people in the next four years

BANGALORE: The Big Four professional services firms — Ernst & Young, PwC, KPMG and Deloitte — are together likely to hire about 43,000 people in the next four years, top officials from the firms say. This is being propelled by a rise in business in tier-II and tier-III cities, growing work in telecom, infrastructure and state government projects, aggressive ramp-up of global shared services centres, and increased focus on emerging markets by global headquarters.

Fresh graduates, engineers, chartered accountants and MBAs are likely to account for roughly 60-80% of the new hires. On an average, the Big Four firms typically pay salaries of Rs 3 lakh per annum for fresh graduates, Rs 4 lakh for engineers, Rs 7 lakh for chartered accountants and Rs 11 lakh for B-school pass-outs. Higher salaries are not uncommon. Much of the hiring is done at tier-I colleges.

Lateral hires will also play a big role in all this. Aggressive poaching of partners and even full teams between KPMG, PWC, and Ernst & Young — something that's been hitting newspaper headlines lately — is also likely to intensify. The industry is already seeing attrition rates as high as 25% in some pockets, the highest in recent times.

KPMG, the smallest in terms of manpower strength, plans to more than double its headcount in four years; Ernst & Young and PwC intend to grow their talent base by 22-24% and 15%, respectively, every year for the next four years and Deloitte intends to hire 9,000.

Together, the Big Four earn revenues of over Rs 6,000 crore from an assortment of services ranging from auditing to consulting.

KPMG, which now has over 8,000 employees on its rolls, will add another 9,000 executives by 2018, including 225 partners (including internal promotions). "We have put before ourselves a very ambitious target of becoming a $1-billion organisation in the next 4 years. For this we need 17,000 people and 460 partners," says Richard Rekhy, CEO, KPMG India.

It has just hired the managing director of consulting firm, Protiviti Consulting and its entire seven member leadership team.

Earlier, the firm had snagged the whole team of Eicher Consulting Services that was acquired by PwC. Industry sources say that Big Four firms, in their aggression to find the talent to grow, have also repeatedly tried to poach entire teams from other firms like Grant Thornton and BMR.

 

In the last year, the Big Four have been aggressively building out and expanding business lines," says Sonal Agrawal, Managing Partner, Accord, a search firm. "There has been a constant demand for revenue generators and product specialists.

Typically, they are seeking higher quality talent, or replacing high-cost talent with value hires. Additionally, team hires are becoming more common."
Not one to be left behind, PWC, on its path to recovery after the Satyam fiasco, has big plans too. The firm that currently is 7,000 strong (190 partners) typically takes 15% growth per year in employee strength as a benchmark. "We have been hiring in particular areas that have been growing fast for the firm," says Mark Driscoll, leader human capital, PWC. The areas where Driscoll and his team are out on a hunt are tax (especially transfer pricing), financial services, advisory (risk advisory, compliance and forensic), tax consulting, new types of IT services like cloud etc, and specific skill sets like Big Data and analytics. Market leader Ernst & Young won't be left behind in the rumble.

It expects to grow its talent base by 22,000 to 25,000 in the next four years taking its overall employee base to 40,000 plus in 2018. This will include staff at outsourcing centres in Gurgaon, Bangalore, Trivandrum, Chennai and Kochi where more than 9000 people are employed now.

Deloitte will also show its aggressive side by taking on board more than 9,000 employees by 2018. With 20,000 employees on board, the company will still recruit at 8-10% more every year, says P Thiruvengadam, Senior Director, Deloitte Touche Tohmatsu India.

Hiring for Deloitte will focus around technology, enterprise application, research and analytics, financial advisory. Deloitte also runs perhaps the biggest shared services centre among the Big Four in Hyderabad. Interestingly, while large numbers are being hired in some service lines, the entry into the coveted apprenticeship programs of the Big Four still happens to be toughest across industries with each firm hiring just a handful of youngsters (between 20 and 25) after a gruelling interview process each year. The Big Four firms have navigated the slowdown well, growing at 15% to 20% annually since 2008.

Among various service lines, tax has grown at a fair clip due to new overseas regulations and rising complexity. Audit has been a stable business, but bigger and more complex businesses now require more services as number of statutory requirements increase; advisory market though is down due to price cutting and damp investment climate, but hiring continues.

Transactions work has dipped due to low number of M&A and PE deals, but firms are maintaining team strength. Shared services centres being run out of India by Big Four firms are expected to be a big growth area on the back of a push from global headquarters.


Source: Economic Times