Tuesday, June 30, 2009

Jackson, Rolfes, Spurgeon to Merge with Plante & Moran in Cincinnati

Jackson, Rolfes, Spurgeon & Co. (JRS), Cincinnati, is merging with Plante & Moran, PLLC tomorrow and plans to expand the firm in the future.

“Locally, the jobs we had here are going to stay,” said Plante & Moran’s incoming Managing Partner Gordon Krater. “If anything we’re looking to add jobs to the area, and to the city. Cincinnati is a city we intend to invest in and we’re looking to grow the office significantly over the next several years.”

JRS Managing Partner Jim Rolfs added: “We don’t anticipate any changes really in any of the jobs except some minor changes in roles and responsibilities, possibly.”

The merger brings JRS access to specialty practice professionals in international tax and consulting, corporate finance, financial advisory, healthcare, manufacturing and not-for-profit organizations.

JRS has five partners who will become Plante & Moran partners and a total of 50 staffers. It provides financial, tax and consulting services to small and mid-size companies in Southern Ohio. JRS’ specialty practices include manufacturing, real estate, construction and auto dealerships.

Plante & Moran sees the merger as a way to increase the firm’s local footprint. “Cincinnati rounds out our Ohio presence…we’ll be able to expand west and south from there,” Krater says.

Friday, June 26, 2009

CFOs, Treasurers, Staff Saw Modest Pay Hikes in 2008, AFP Survey Finds

Chief financial officers, treasurers and their staff saw their paychecks grow by an average of 3.4 percent between January 2008 and January 2009, more than the average white-collar worker, but somewhat less than the 4.5 percent increase they saw in 2007, according to the latest salary survey from the Association for Financial Professionals http://www.afponline.org/.

The average bonus was 15 percent, unchanged from 2007.

Middle managers reported slightly larger increases in total compensation than did VPs of finance and CFOs, said AFP, which collected its data from 3,000 professionals at 2,000 primarily North American companies in February 2009.

Managers of treasury/finance reported the highest percentage increase, 5.7 percent, and an average base salary that rose from $88,000 in the 2008 survey to $93,900 in 2009.

Here’s what AFP reported for other positions’ 2009 base salaries:

  • CFO 184,300 up 3.2 percent
  • VP of finance 161,600 up 3.2 percent
  • Treasurer 161,600 up 3.9 percent
  • Controller 116,500 up 3.3 percent
  • Director treasury/finance 125,400 up 4 percent
  • Assistant treasurer 124,700 up 3.8 percent
  • Cash Manager 71,000 up 3.6 percent

Wednesday, June 24, 2009

PwC's Plans for India

India is the fastest-growing market for PricewaterhouseCoopers (PwC), and the company plans to add 3,500 staffers there over the next four years, up from the current 6,500, PwC Chairman Dennis Nally said during a recent tour of the country.

In an interview with The Economic Times, Nally talked about the use of non-Indian auditors in the wake of the Satyam debacle, how the growth of the Indian economy has increased demand for auditing and off-shoring:

Q: PwC recently decided to bring in auditors from its various international/outside affiliates to run a check on the audit work done in India. Is it to maintain consistent audit standards?

A: It is based on the whole idea of cross-border expertise, where we take individuals with skill sets in one country and share that expertise in another country. The idea is to make the firm stronger.

Q: What are your plans for India?

A: China, India and Vietnam are important markets for us, as the growth in such regions is very positive. We have over 6,500 employees in India, and plan to take the number to 10,000 in three to four years. We also plan to add a significant number of jobs from our sourcing strategy.

About 4 percent of PwC’s employees are based in India.

Nally told The Times of India that the company regrets its failure to detect the fraud at Satyam Computer Services. Two of PwC’s partners were arrested earlier this year in the case:

PwC has particularly brought about changes in the process of recruitment, in terms of looking out for qualities of ethics and values in an individual. "If we don't have those type of attributes from day one, it is pretty difficult to build them down the road. So this is what we really look for in our recruits and make those judgments right upfront on day one even before those individuals are offered to join the firm,'' said Nally.

Tuesday, June 23, 2009

CFOs Try to Avoid Layoffs

To avoid layoffs, nearly half (47 percent) of chief financial officers are trying other options ranging from salary freezes to shortened work weeks, according to the most recent quarterly survey conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business.

About a fifth (21 percent) of the 334 CFOs surveyed said they expanded early pensions and other retirement incentives, while 17 percent implemented furloughs.

Forty-seven percent of respondents were trying other tactics, including salary reductions, unpaid vacations, pay raise stalls and preferences to hold onto experienced personnel:

• Salary freeze – 51 percent
• Redistribution of responsibilities – 29 percent
• Elimination of bonuses – 29 percent
• Restructuring – 29 percent
• Salary decreases – 20 percent
• Shortened work week – 16 percent
• Mandatory unpaid time off – 11 percent
• Option to telecommute – 3 percent

On a more optimistic note, over a quarter (28 percent) of CFOs are witnessing signs of stabilization at companies where layoffs did not occur this quarter (30 percent).

The job outlook for recent graduates and interns was still challenging when the survey was conducted at the end of March. Nearly all (95 percent) of the CFOs whose companies traditionally hire students had either hired fewer, or the same amount as the previous year. A scant 5 percent of the CFOs had increased graduate hiring.

Among companies that have historically hired paid summer interns, 61 percent planned to hire fewer interns, and only 8 percent said they would hire more interns this summer.

Thursday, June 18, 2009

Redundancies at Large UK Accounting Firms

The 50 largest accounting firms in the United Kingdom have reduced their headcount by about 3,000, or 5 percent, over the past year, according to an annual survey from Accountancy Age.

The top 50 firms by revenue now employ 56,669 qualified accountants, the survey found.

“Experts expect the job cuts to continue as firms try to slash costs in response to a sharp slowdown in demand for corporate finance and other services,” Accountancy Age predicts.

Even KPMG, which last winter reduced UK staffers to a four-day work week to avoid layoffs was planning to cut 200 jobs.

Phil Shohet, director of Kato Consultancy, told Accountancy Age firms are cutting managers and recruiting graduates:
This has forced partners to "trade-down" and handle more technical work, Shohet said, meaning that clients are often relying on inexperienced graduates to help them survive the recession. "You need more rounded managers who are technically very good, but who can also manage staff better," he said. "In independent firms there is very little management training."
Here in the U.S., the Bureau of Labor Statistics reports CPA firms employed 438,600 people in April of 2009, down 4,800 people from April of 2008.

The BLS also offers seasonally-adjusted numbers for the broader accounting and bookkeeping industry. Those figures show 5,100 fewer people working in the field in May of 2009 than were working in May of 2008.

Anecdotally, our viewers continue to share the news about layoffs in many cities by accounting firms, including the Big 4, as they comment on our blog What's Behind Layoffs at the Big Four.

Tuesday, June 16, 2009

Bay Area Job Market Better Than In Other California Areas

Accountants on the job hunt in California should pay extra attention to the San Francisco Bay and Silicon Valley areas. Robert Half International’s head of recruiting for the state said opportunities are likely to remain more plentiful in the northern California hubs over the next six months than other parts of the state. Brett Good, Half’s District President Southern California/Arizona, says that San Francisco and Silicon Valley were less affected by slowing real estate development than other areas. Moreover, Good also said that technology firms that are a staple of the Bay Area economy have kept busy on projects that started before the meltdown, not to mention supplementary assignments targeting efficiency. “From a technology perspective, for organizations involved in upgrades, these projects have long tails,” Good said. “You can’t just cut them off.  He added: “There are some companies that are just starting projects. (All) this has kept technology organizations puddling along. The question is whether San Francisco will (in the more distant future) fall into what the other major metropolitan areas are facing now if new projects aren’t coming along.” A recent Half survey of CFOs – released earlier this month – underscored Good’s comments. Eight percent of San Francisco CFOs responding to the quarterly Half Hiring Index said that they expected to reduce staff while 6 percent said they would probably hire employees. To be sure, an Index where fewer CFOs are likely to hire workers than make cuts generally reflects a weak job market. But the minus 2 differential for San Francisco was much better than negative 7 percent differentials in Los Angeles and San Diego and a negative 5 percent gap in Sacramento. 

Friday, June 12, 2009

Women Partners vs. Directors

Deloitte LLP’s announcement this week that it had reached the 1,000 mark for U.S. women partners, principals and directors is worthy of note for some not-so-obvious reasons.

The announcement talks about not just equity partners and non-equity partners, but directors as well – a term that’s sure to start an argument over what’s included in the category if you ask more than one firm to supply that figure. “They could all inflate their numbers if we expand the definition to include female directors,” points out Public Accounting Report (PAR) Editor Jonathan Hamilton.

If you’re just counting partners, the Big 4 run about even, according to PAR, which surveyed 171 firms about their percentage of women by staff category in mid-2008.

PAR’s results:

KPMG 18.6 percent
Plante & Moran 18.4 percent
Deloitte 18.1 pecent
CBIZ/MHMcC 18.1 percent
E&Y 17.0 percent
PwC 16.9 percent
Grant Thornton 14.9 percent
BDO Seidman 13.9 percent
RSM McGladrey 14.3 percent

Hamilton points out another potential reason for the increase in women partners: recent layoffs of partners, most of whom are older, white males, which could shift the ratio of male/female partners, even if no new female partners were created.

Going forward, accounting firms that don’t find a way to retain and promote women could find themselves facing serious retention issues due to two factors. First, the ratio of women to men in accounting programs continues to favor women in ever greater numbers, so the inflow of accountants is predominately female.

Second, there’s an exodus of older white males on the horizon. “More CPAs will retire over the next 10 years than retired in the previous 40 years combined,” Hamilton says.

Taken together, these trends mean we’re likely to see firms continue to attempt to position themselves as female-friendly.

Deloitte CEO Barry Salzberg could argue that the 1,000 number touted in this week’s press release really does reflect Deloitte commitment to developing women and minority leaders through its Initiative for the Retention and Advancement of Women.

After all, it was the first Big Four professional services firm to create an official program for the advancement of high-potential women through training, mentoring, coaching and succession-planning programs.

And, it is the first and only major professional services firm to have a woman chairman, Sharon Allen. In addition, its board of directors has six women -- a female representation of 29 percent.

Wednesday, June 10, 2009

Older Workers Have Seen it Before

The challenging economy has hit the psyche of younger workers hard, while older employees are showing greater resiliency in the recession-battered workplace, according to a new study by Boston College's Sloan Center on Aging & Work.

The survey, which measured attitudes about job security, supervisor support, job quality, inclusion and overall employee engagement among about 2,200 workers at 12 job sites, was done from November of 2007 until just after the Bear Stearns collapse in March of 2008 and again between June and September 2008.

Not surprisingly, employees of all ages reported a drop in employee engagement, a measure of how invested and enthusiastic employees are in their work.

Generation Y workers -- ages 26 and younger -- reported the greatest decrease in engagement, followed by Generation X -- ages 27 to 42. Baby Boomers and older Traditionalists -- ages 43 or older -- reported that their levels of engagement hardly changed at all.

"Some older workers have seen it all, and that gives them experiential resilience," says Marcie Pitt-Catsouphes, director of Boston College's Sloan Center on Aging & Work. "Younger workers just don't have the depth of experience, which leaves them feeling less engaged in their jobs. But younger workers bring energy, enthusiasm, and idealism."

The survey also found:
  • Perceptions of engagement, supervisor support, inclusion, and job quality declined after the onset of the economic downturn for employees who felt that their job security had decreased, but it stayed the same or only slightly declined for those whose job security had stayed the same or increased.

  • Those whose job security decreased or stayed the same experienced a slight increase in work overload after the onset of the economic downturn, whereas those whose job security increased experienced a slight decrease in work overload.

  • Those whose job security decreased perceived a slight decrease in team effectiveness after the onset of the economic downturn, whereas those whose job security increased experienced a slight increase in their perceptions of team effectiveness.

  • While younger workers felt the effectiveness of their work team as a whole dropped as their job security declined, older workers felt the effectiveness of their team held steady even though they too reported a decreased sense of job security.

Friday, June 05, 2009

Before you Agree to Cut Your Hours...

If your company asks employees to reduce their hours to avoid layoffs, would you stay on the job?

In the United Kingdom, where employers such as KPMG reduced hours rather than cutting staff, KPMG People Strategy Director Tim Payne recently wrote a feature The Telegraph that’s a nice laundry list of things to consider if you face this situation:
  • Why are the reductions necessary?
  • Can you afford it?
  • How long with the cut-backs last?
  • When do they start?
  • How will my salary change?
  • What will my take-home pay be?
  • What happens to my retirement and other benefits?
  • How would I spend the extra free time?
  • Can I trust management?
  • Who decides how far to cut back hours?

“Handing over control of your work schedule and salary to your boss requires a certain level of trust,” Payne writes. “But, if you can pull it off, the outcome is an incredible amount of flexibility in the workforce, and a precision tool for managing costs while retaining talent.”

Thursday, June 04, 2009

Unemployment Claims Drop, Productivity Rises In Latest Reports

Over the last few weeks, there have been a few minute indications that the economy has stabilized. The latest encouraging sign comes with today’s Labor Department report that the number of people filing first-time claims for unemployment insurance dropped slightly from last week’s 625,000 to 621,000. To be sure, that remains well above levels consistent with a strong economy. A year ago, initial claims were 370,000. In addition, a number of experts have been predicting that unemployment will rise from April’s 8.9 percent to 9.2 percent when the May figures are released tomorrow.

Still, there was other positive news in the Labor Department report. The number of people receiving jobless benefits shrank by 15,000 from 6.750 million to 6.735 million. That represented the first decline since January. Continuing benefit claims have been setting record highs in recent months. Continuing claims data follows initial claims data by a week. Also, a separate Labor Department report found that productivity – the output per working hour – rose 1.8 percent in the business sector and 1.6 percent in the non-farm business sector. Those numbers were higher than the Labor Department predicted in a May 7 report. Greater productivity has wider benefits, raising living standards as industrious employees earn more without companies having to raise prices.

Some recruiters focused on the finance sector are a little more hopeful about the near future. “I do feel it’s steady as she goes just as it has been the past three to five weeks,” says Paul Herrerias, a managing director in the San Francisco office for executive search firm Stanton Chase. “There’s more conversation about recruiting again. I’m encouraged that the stock market is steadily inching forward and that’s where we think the economy is going as well. Hiring will start to pick up.” But Herrerias added “there’s still a lot of pain out there. It’s still a long way before big financial services firms will be hiring (in large numbers) again.”

Wednesday, June 03, 2009

Audit Fees Up 2.2% in 2008

Public company audit firms upped their fees 2.2 percent in 2008, according to the latest Financial Executives Research Foundation (FERF) Audit Fee Survey.

However, that increase may not translate into fatter paychecks for employees since a majority of company officials also reported taking on more work internally and considering a change in audit firms.

The Audit Fee Survey polled over 360 executives from U.S. publicly held companies (76% of those were either accelerated filers or large accelerated filers), privately held companies and foreign companies to gauge the total fees companies paid to external auditors in 2008 and overall satisfaction with audit firms.

According to the survey, publicly held companies paid on average $3.7 million in total audit fees for fiscal year 2008, representing an increase of 2.2% over total audit fees paid for the prior fiscal year.

Total audit fees paid by privately held companies responding to the survey averaged $219,500, a 3.7% increase over the prior year.

Public company audits averaged approximately 9,881 hours in 2008, and their average blended audit fee rate was $216 per hour ($196 for non-accelerated filers and $217 for the accelerated filers).

Private companies averaged about 1,903 hours at a blended audit fee rate of $179 per hour ($152 for the smallest companies to $230 for the largest).

If you’re working for a regional or local firm, you know retaining clients is an on-going challenge. Nearly a quarter of the private company respondents said they re-bid their audit work every four to seven years, while only 11 percent of public companies put the engagement out for bid in the same time frame.

“In addition, 15 of the 245 private companies plan to switch auditors,” the survey says, “compared with only two of the 110 public company respondents. Companies that expressed intention to change auditors cited services issues as a primary concern."

Looking ahead, the survey turned up differences in what companies expect to pay for future audits. A scant 19 percent of public company officials expect audit fees to increase.

By contrast, half of private company respondents expect audit fee increases of 2 percent to 10 percent in 2009.

Online Job Openings Rise in May

The Conference Board reported June 1 that online advertisements for job openings rose by 250,000 to 3,367,000. It was the first increase since October’s small 21,000 ad increase and the largest since October 2006.  The New York-based Conference Board, which provides research on business trends, tracks monthly Internet job advertisements via its Help-Wanted Online Data Series.

These online postings offer one measure of the strength of the job market. The report found that 43 of 50 states posted gains in Internet job ads and that labor demand has increased or leveled off in such states as New Jersey, Maryland, Georgia and Maryland.

Gad Levanon, senior economist for The Conference Board, saw positive signs in the report. The May bounce in labor demand is a very welcome sign.” Lebanon said, “April and May are both months when businesses typically step up their demand for workers. This year, while April was weak, by May employers were placing ads for workers in numerous locations across the nation. Over the last four months, there are now about a half-dozen states where the drop in labor demand shows signs of leveling off and another handful of states show some very moderate increases. Labor demand typically leads the trend in both employment and unemployment, so positive signals on labor demand are always important."

But Lebanon also said that unemployment was likely to continue rising, albeit at “more modest levels throughout the summer.” He added: “April (the May numbers are released on June 5), there were 10.6 million more unemployed workers than advertised vacancies.”

Indeed, there were 4.4 unemployed people for every one online job advertisement – up from 4.05 to one in March. Michigan had the worst ratio of roughly nine unemployed people for every one advertised opening. Maryland and Virginia were best with two to one ratios. Those states have heavy concentrations of Federal agencies and organizations working closely with them. Government has been among the stronger sectors for hiring over the past 18 months. 

Tuesday, June 02, 2009

Benefits Top List of CFOs, Surveys Find

What’s most on the mind of today’s cost-conscious CFO?

It’s no surprise that employee benefits top the list, according to surveys released recently by accounting firm Grant Thornton. One study found that 73 percent of CFOs from U.S. manufacturers said that benefits were their major concern. That was 11 percentage points higher than their second biggest worry, paying for raw materials, and 26 points higher than concerns over energy costs. Benefits are among the largest expenses and the most difficult to cut.

Chicago-based Grant Thornton surveyed 120 CFOs from companies with revenues ranging from $100 million to $1 billion.

The Grant Thornton survey also found that 70 percent of CFOs don’t expect to give pay raises this year, and that 59 percent won’t provide bonuses. In addition, 70 percent of the participants said they would be reducing recruiting and hiring activities.

In a separate survey of 46 CFOs and senior comptrollers from financial services firms, 74 percent of the participants said that employee benefits, including pensions and health care, created the most significant pricing pressure. In this survey, 85 percent of the respondents said the recession would last through 2009. But here’s a bright spot: 42 percent of the participants also said they expected their companies’ financial prospects to improve over the next six months, almost double the percentage of those who said their organizations’ prospects would worsen. 

Symonds, Evans Joins Delap

Delap, LLP, Lake Oswego, Oregon has merged with Symonds, Evans & Co., P.C., Portland, Oregon. The new firm, which will retain the Delap name, plans to use its 90 employees to create larger client service teams.

Delap’s current clients include healthcare, financial institution, aviation, forest products, wholesale distribution, manufacturing, automotive, employee benefit plan, construction, real estate, retail and technology companies.

“We are going to have a stronger healthcare and financial institution practice, including commercial and community banks as well as credit unions,” says Delap Business Development Manager MyKim Tran.

To serve those clients, the firm hires year-round. “We hire on campus every year, a year in advance and we are still very active in our recruiting for experienced hires,” Tran says.

RHI Survey Says: Few Hires, Few Fires Coming Next Quarter

Companies are reluctant to hire new accounting and finance professionals, but only a scant 8 percent plan third-quarter layoffs, according to the Robert Half International (RHI) Financial Hiring Index.

Five percent of the 1,400 chief financial officers surveyed by RHI expect to hire full-time employees during the third quarter. The majority, 85 percent, plan to stick with their current staffing levels.

Despite the survey’s lukewarm results, CFOs say they continue to have a hard time finding senior and staff accountants as well as auditors.

The survey did turn up regional differences in CFOs’ hiring outlooks. Those in the East South Central and West South Central states were the most optimistic.

RHI also noted differences among industry sectors. "Growth among the healthcare and hospitality sectors in some areas within the East South Central states is boosting hiring activity in the region," says RHI Chairman and CEO Max Messmer.

"In the West South Central [states], employers seek mid-career professionals who have a proven work history and are flexible and skilled enough to manage a range of accounting projects," he adds.

Read more local results here.

Monday, June 01, 2009

For Feds to Tax Carbon, Something Has to Measure It

If Congress decides to cap or tax carbon emissions, how might your firm track what it uses or owes? Chances are you’ll either get an updated SAP or a stand-alone software program to do the calculations.

As The New York Times reported today , start up firm Hara has launched a software program that helps companies track and potentially reduce their greenhouse gas emissions.

Meanwhile, SAP AG last month said it would acquire Clear Standards, Inc., a privately held firm that helps organizations measure, optimize and report greenhouse gas emissions.

Evergreen Energy Inc. subsidiary C-Lock Technology, IBM and Enterprise Information Management Inc. have developed a carbon information management technology solution that currently serves agriculture and energy companies.

Expect to hear a lot of claims and counterclaims as developers mix science and technology in the quest to measure carbon emissions.

“A green economy built on carbon avoidance and cap-and-trade programs can’t be sustained with approximations or best-guesses,” said Jim Bitonti, president of C-Lock. “Existing emissions measurement tools are acknowledged to be inaccurate by as much as 30 percent, an unacceptable failure level that can cost businesses millions and threaten the credibility of nascent carbon markets.”

Rate of Layoffs at Big Companies Slowed

The Forbes Layoff Tracker finished its quietest week last Friday since it started tracking layoffs at the country’s 500 largest companies in November 2008. The Tracker recorded 650 layoffs – all at business supplies manufacturer Cintas -- for the workweek ending May 29; by comparison, for the previous workweek, five companies, including American Express and Hewlett-Packard, announced more than 12,300 layoffs. The news followed the most recent Bureau of Labor Statistics report, which found that the number of first-time unemployment claims dropped in April compared to the previous month. So did the number of mass layoffs, defined as those involving at least 50 people.

Is the economy getting ready to start a long, slow rebound, as a number of experts have suggested recently?

On the other hand, the same Labor Department report found that the unemployment rate rose from 8.5 percent in March to 8.9 percent in April, while 12 of 19 major industries reported all-time highs in terms of average weekly first-time unemployment claims in April. The industries included finance and professional services.

Still, the president of one major executive recruiting firm found some upbeat notes in the most recent data and says his firm has received a number of assignments, especially at the board and CEO level. “We’re gradually approaching some sort of change, and consumer demand seems to be saying the same thing,” said Chris Clarke of Hawthorne, N.Y.-based Boyden Global Executive Search. “The good news is we think we’re past the bottom.”

Moreover, Clarke added that a number of companies are still seeking talented CFOs and other finance executives. “Finance is one of the toughest functions right now,” he said. “These are the people who have to sort out the messes. Those good at it are much in demand.”