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Accounting Updates

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Status: Burning mid-night oil....daily
Joined: 07 Nov 2008
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Schools: Yale SOM 2011 Alum, Kellogg, Booth, Tuck
WE 1: IB - Restructuring & Distressed M&A
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Accounting Updates  [#permalink]

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New post 20 Jun 2011, 11:27
Accounting hires add up
Local businesses replenish staffing levels after recent years of industry tumult ... /306209985


Bloodbath is over.

After a period of more accounting firm layoffs than one industry consultant can remember in decades, CPA firms are back in hiring mode.

Ernst & Young LLP, one of the big four accounting firms, has hired more than 100 in Northeast Ohio in the last 12 months — an increase of about 10% for the market — and expects to add another 100 over the next year, said Lee Thomas, who becomes Cleveland office managing partner in December when Northeast Ohio managing partner Don Misheff retires. (Simultaneously, Ed Eliopoulos will become Akron office managing partner.)

The firm's three-figure hiring follows three years of reduced hiring, Mr. Thomas noted.

Similarly, local hiring by KPMG, another of the big four, began to pick up about a year ago and will continue into 2012, said John MacIntosh, managing partner of the Cleveland office. More than 50 recent hires will spend the lion's share of their time in the Cleveland area, he said, noting that's significant hiring compared to a year or two ago.

And it's not just the big four: Local CPA firms Pease & Associates Inc. in Cleveland and Corrigan Krause in Westlake have added a few CPAs this year, too, and plan to hire another handful this summer.

Nationally, after three consecutive years of declines, CPA firms “finally” are projecting positive growth between 3% and 4%, said Allan D. Koltin, CEO of Koltin Consulting Group, a Chicago firm that specializes in the accounting profession.

The industry had enjoyed enormous growth and enormous hiring between 2003 and 2007, Mr. Koltin said, but the recession year of 2008 ushered in a dark chapter. Many firms instituted hiring freezes and made cuts. Most of the 100 largest firms let go of anywhere from 10% to as many as 20% of their accountants, he said.

“It probably was the worst bloodbath of layoffs that the accounting profession has had in well over a couple decades,” Mr. Koltin said. “The bloodbath is definitely over. Firms all over the country, Cleveland and everywhere, for the first time are doing serious hiring after a serious drought.”

Accounting firm hiring really began to pick up in the fourth quarter of 2010 and the first half of 2011. According to the U.S. Department of Labor, “notable job gains” occurred in May in accounting and bookkeeping services, which enjoyed a net gain of 18,000 jobs nationwide.

Today, it seems virtually all firms are engaged in hiring, Mr. Koltin said, though today's hiring pales in comparison with the frenzy that occurred before 2008.

While he stopped short of saying that the hiring is an indication that the recession is over, Mr. Koltin sees it as a sign that the recession has leveled off.

Many of the firms adding to their local ranks attributed their hiring to the growth other businesses are experiencing.

“Two years ago, companies were kind of frozen,” said Mr. MacIntosh of KPMG. “Now, companies are making decisions (and) usually when they make decisions of action, they need some sort of help.”

Others echoed that sentiment.

As companies expand, they rely on accountants to guide them in different elements of growth, and that translates into more accounting jobs, said Greg Skoda Sr., chairman of Skoda Minotti & Co. in Mayfield Village, which grew its staff some 8% to 10% in the first half of 2011.

“There's a lot more business activity than there was a year ago,” he said, citing increases in merger and acquisition activity and bank financing. “We're seeing a number of clients' businesses moving forward.”

Mr. Skoda anticipates the same amount of hiring in the second half of the year. The firm's employment had remained relatively flat during the first six months of 2009 and 2010, he noted.

Reform of many types also is driving an increased need for professional services, Mr. MacIntosh noted. The financial services sector is grappling with the requirements of recent reform, and health care reform will pose challenges to companies for years to come, he said.

Upside in Cleveland
For some firms, current growth is driven by changes in strategy, too.

Mr. MacIntosh estimated that market growth is driving probably 25% of KPMG's local hiring; the other 75% is the product of a corporate decision to strategically invest in Northeast Ohio.

That decision was rooted, in part, in the net staff reduction that occurred at area professional services firms in recent years, he said.

“(Cleveland) is, we think, an underserved market with a very large upside,” Mr. MacIntosh said. “There's a chance for us to make KPMG even more relevant within Northeast Ohio.”

Strategy is more important today than it was a couple years ago, when firms could grow based simply on the quantity of work to be done, said Gary Shamis, managing director of SS&G Financial Services, which has had a “nice rebound” this year and is “definitely in hiring mode again.”

The Solon-headquartered firm is focusing on strengthening its advisory and accounting services for certain niches, such as health care, restaurants and public company work, Mr. Shamis said.

“I believe that's the way you've got to do it right now,” he said. “You've got to be really strategic.”

The firm, which employs some 325 in Northeast Ohio, has hired 15 full-time people. “Not huge,” Mr. Shamis acknowledged, but considering the industry's flat numbers in the past couple years, it is positive growth.

SS&G had decreased its staff by about 6% or 7% in 2008, but had returned previously to those levels. Its most recent hiring will put the firm at an unprecedented headcount, he said.

So who are the lucky new hires?

Seemingly all firms are hiring a range of positions, from those that require more than a decade of experience to those requiring two or three years. In fact, because many of those cut during the recent past were entry-level people, those who have a couple years of experience are in high demand, Mr. Koltin said.

“There's this tremendous void of two- to four-year people,” he said.

Those CPAs and advisers who specialize in an industry — for example, international tax, renewable energy and health care — also are in great demand, Mr. Koltin said.
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Accounting Updates   [#permalink] 20 Jun 2011, 11:27
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