Accountancy next bubble to burst.

DJDC

http://www.independent.ie/business/irish/kpmg-tells-trainees-they-wont-be-offered-jobs-on-graduating-1643132.html

ACCOUNTING giant KPMG has told scores of its trainees their contracts will not be extended if they qualify this spring, ending the established practice of near-automatic contract offers.

A spokesman for the company declined to say how many trainees had already been told their contracts will not be extended, but admitted the process was ongoing since the company would be offering a "reduced number of positions this year".

The move comes as the accounting 'Big Four' -- KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young -- face into increasingly difficult trading conditions.

Fears of similar moves by the other accounting giants are rife within accounting circles.

Plans

Spokespeople for the other three firms in the 'Big Four' were asked about their plans on Monday. By close of business yesterday, all had failed to reply to repeated queries.

At KPMG, 130 accounting trainees are due to "come out of contract" this spring, according to the firm's communications boss. Industry sources say that while most qualifying trainees have traditionally opted to leave the 'Big Four' in favour of industry jobs, job offers from the 'Big Four' were "pretty much automatic".

In the current jobs climate, offers from the 'Big Four' are expected to have been more widely accepted this year.

Trainees at KPMG were understood to have been shocked when they were informed of the decision.

Discuss.

Dixie Chick

DJDC wrote: »

http://www.independent.ie/business/irish/kpmg-tells-trainees-they-wont-be-offered-jobs-on-graduating-1643132.html



Discuss.

This isnt leaving cert english is it?

Cyrus

DJDC wrote: »

http://www.independent.ie/business/irish/kpmg-tells-trainees-they-wont-be-offered-jobs-on-graduating-1643132.html



Discuss.

much ado about nothing, when times were good nobody wanted to stay anyway, people only want to stay now because the job market is so tough right now.

this was always going to happen, KPMG went from intakes of around 120 in 2003 to over 300 in the last few years, so they will let qualified seniors go until this corrects itself in a few years time.

Kinetic^

It's old news tbh and when companies are going in to liquidation as fast as they are,it reduces the amount of audits/accounts being produced.

Cyrus

Kinetic^ wrote: »

It's old news tbh and when companies are going in to liquidation as fast as they are,it reduces the amount of audits/accounts being produced.

but increases insolvency work

Fruiti

I think the bit where it says "Trainees were understood to have been shocked..." is pretty funny! What planet are they on - in a time like this, the people employed on contracts will always be the first to go when the contract expires!

And I agree with Cyrus - they had no loyalty to the firms when there were industry jobs offering more money a few years ago - now the shoe's on the other foot! The big 4 run a business after all and everyone's costcutting now!

Mr. Incognito

Permanent and Pensionable for me in a Big 4, safe!

Dlite

In a Big 4, there is a shock coming our way, just waiting on the mail.

Fruiti

Mr. Incognito wrote: »

Permanent and Pensionable for me in a Big 4, safe!

Do you think? I am too and I always thought that but with rumours of 4 day weeks for certain firms I just wonder whether it's really that safe. How safe is a permanent contract these days? I'm guessing they'll be more focused on chargeable hours etc!

Cyrus

Mr. Incognito wrote: »

Permanent and Pensionable for me in a Big 4, safe!

i wouldnt be over confident:(

NaasMan

Mr. Incognito wrote: »

Permanent and Pensionable for me in a Big 4, safe!

I would expect to see action from all 4 firms within days/weeks. This could involve Redundancys, pay cuts or four day weeks in the same way the legal firms have done. Still thing that you are safe?

Mr. Incognito

Maybe that sounded flippant- I work in tax and if the overhall that is expected in the taxation system comes in, well then yes, I'd be confident of keeping a job- Taxes go up, people need sound tax advice.

It's no joke people being laid off but people out of contract are goint to be the first to go- after that- who knows.

NaasMan

Mr. Incognito wrote: »

Maybe that sounded flippant- I work in tax and if the overhall that is expected in the taxation system comes in, well then yes, I'd be confident of keeping a job- Taxes go up, people need sound tax advice.

It's no joke people being laid off but people out of contract are goint to be the first to go- after that- who knows.

The question is can companies afford to pay for this advise, or can they put is off until they start making profits.

The VAT guys thought that the new VAT on property rules would given them a lot of work this year, but most VAT units currently have very little going on at present and some are of 3/4 day weeks.

A lot of the big tax practices have teams of people who deal with property who are sitting on their hands doing nothing.

A2fan

I have sympathy for anybody losing their jobs whether at end of contract or not......particularly if they have big mortgage bills to pay.....the fat is being trimmed big time though - the best will be kept and those a little further up the ladder who are not deemed to be progressing as fast as their counterparts or not bringing sufficient fees will also be sacrificed without remorse....

http://www.boards.ie/vbulletin/showthread.php?t=2055455390&page=3

As a business model I haven't seen anything that is as refined as an accountancy practice....there's practically no waste of any kind....the internal controls are draconian but 99.9% effective.....(I came to Big 4 from a different background)....
Although the business model is admirable but it is the middle management who can make it unbearable - they are in competition with eachother for bonuses,promotion etc.....I've said previously that it is laissez-faire....the partners either don't know or don't care what managers ask/force trainees to do or what kind of demands are made on any staff below director level in order to get the job done...

There's also an air of superiority among some Big 4 staff.....particularly younger staff in the cities.....they're used to going on holidays, nice cars and generally being ostentatious - those days are numbered for some at least and that's a good thing...........maybe it's a culture that has grown out of having a job that's relatively well paid and being promoted at a young age......

Those graduates that have gone on about about choosing one Big 4 firm over another on this forum because of how the people in the interview seemed or how it was sold to them haven't a clue what they're in for....wait till a middle-manager asks them to miss weekday lectures or starts ringing them late in the evening or at weekends over work....as some do....I bet none of those things came up at the graduate presentation....!

hotshots85

Rumour that PWC announced 10% pay cuts today? Anybody able to confirm?

Dlite

hotshots85 wrote: »

Rumour that PWC announced 10% pay cuts today? Anybody able to confirm?

Yeah, just go the mail

ManwitaPlan

sh1t. Is it 10% paycut for everybody?


Im assuming the rest of the Big4 wont be far behind:mad:

Pisco Sour

ManwitaPlan wrote: »

sh1t. Is it 10% paycut for everybody?


Im assuming the rest of the Big4 wont be far behind:mad:

Yeh you can bet your house that the other 3 sheep will follow very quickly!

aoibhebree

And you know, when I went to the PwC milkround presentation, they were the ones who were really emphasising that despite any rumours we may have heard, they wouldn't be cutting salaries/hours etc due to the current economic climate. I'm glad I didn't accept their offer, but I presume the others will follow shortly.

Running Bing

aoibhebree wrote: »

And you know, when I went to the PwC milkround presentation, they were the ones who were really emphasising that despite any rumours we may have heard, they wouldn't be cutting salaries/hours etc due to the current economic climate. I'm glad I didn't accept their offer, but I presume the others will follow shortly.

They made sure the milkround was past before they announced it too:rolleyes:

Fiona44

Does anyone know whether its a 10% paycut for everyone or is it a 5% cut for those on 25-35k and 10% for 35k+?
From reading the email it seems to be 10% for everyone but some people seem to think it's not...they didnt make it too clear

Dlite

10% reduction in everybody's salary with effect from the 1st of April

- Offering fixed term contracts to limited number of people who will be coming out of contract in 2009.

5% cut for those between 25k - 35k.

Running Bing

Thats crap.


Its not like the money was great to start with. Im not so bad but I feel for anybody who is renting in the city and has all the bills that come with it. Gotta be hard to live on 22,500 a year:eek:

LightningBolt

Dlite wrote: »

10% reduction in everybody's salary with effect from the 1st of April

- Offering fixed term contracts to limited number of people who will be coming out of contract in 2009.

5% cut for those between 25k - 35k.

Is this definite, I was talking to a few mates there right now and they said it's 10% for everyone below manager level.

DJDC

The market for audit is starting to collapse across the country and the bubble I mentioned in the class sizes of 2003-2007 is becoming more apparent by the day.

Accountancy has never appealed to graduates because of the interesting exciting work, however the job security and slightly above average wage appeal to some. However with the later 2 now questionable, you have to question why intelligent people would want to go into such a mind numbingly boring job.

Mr. Incognito

That's a joke really considering the profts they've been raking in the last ten years and even last year- not like they're going to need the cuts to survive- blatant profiteering off their staff.

quad_red

KPMG sent an email to all staff today saying that a review was at an advanced stage and that early next week staff would get detailed information on a number of 'very difficult decisions' that would be happening right across the firm...

elroy45

Surprised no redundancies were mentioned in PWC email??

Heard rumours of 4 day week been offered to staff as well, any of this true?

hotshots85

Mr. Incognito wrote: »

That's a joke really considering the profts they've been raking in the last ten years and even last year- not like they're going to need the cuts to survive- blatant profiteering off their staff.

Definitiley there is no way income is down so much as to need these cuts, keep the people at the top earning well, this isn't a survival move

Dlite

LightningBolt wrote: »

Is this definite, I was talking to a few mates there right now and they said it's 10% for everyone below manager level.

It is definite, I work in PWC and received the email.

Dlite

elroy45 wrote: »

Surprised no redundancies were mentioned in PWC email??

Heard rumours of 4 day week been offered to staff as well, any of this true?

- Some roles becoming redundant through re-organisation or services no longer required.

MonsterMob

Dlite wrote: »

10% reduction in everybody's salary with effect from the 1st of April

- Offering fixed term contracts to limited number of people who will be coming out of contract in 2009.

5% cut for those between 25k - 35k.

its a 10% paycut for professionals (accountants, tax people and the solicitors) and for support people between 25k-35k its a 5% cut

Fiona44

Quote:
Originally Posted by LightningBolt
Is this definite, I was talking to a few mates there right now and they said it's 10% for everyone below manager level.

Actually I just re-read the email and you're right. It's 10% cut for everyone regardless of what we're earning except for support staff.

Barracudaincork

TG im not affected by this or anything similar in our practice and i really feel for those who are affected, but it may now keep the public workers off our back saying we have it so good etc Maybe now they will realise that all employers are having to make cuts, not just their employer i.e. the government.

Mr. Incognito

Only below manager level?

That's not going to save them a whole lot is it?

Wy doesn't everyone below manager level go on strike

boredatwork82

Its tough, but everyone knew this was going to happen before christmas. I did and I am in industry down the country. At least ye still have jobs which is the only positive to take out of it. My company has moved to India just shafting everyone. Anyone want to hire me, send me a pm, (so that recruitment agents don't see the job!!)!!!!
Lets spare a thought for all the people in the IFSC banking industry who will lose their jobs too. I know a company in there announced lay offs today.
Hopefully things will get better sooner rather than later.

thebang

DJDC wrote: »

The market for audit is starting to collapse across the country and the bubble I mentioned in the class sizes of 2003-2007 is becoming more apparent by the day.

Accountancy has never appealed to graduates because of the interesting exciting work, however the job security and slightly above average wage appeal to some. However with the later 2 now questionable, you have to question why intelligent people would want to go into such a mind numbingly boring job.

Most graduates are only there for the exit opportunities, and people not should worry unduly if they are near the beginning of their contact. Despite what people seem to think, there is good exit opportunities for good people in most countries (Ok probably not the US) if they get an ACA and good experience (not in the current cycle granted)
I would not try to undermine that some people are feeling the pinch but IMO if you can survive at the moment you will be ok in the long run.

By the way DJDC, you seem to have a big time hard on for the profession, and if you think their status is so lowly, I suggest you look at the staff bios of practically any big UK private equity firm.

schumacher

will this 10% pay cut apply to graduates starting their contract next October? Or will we be lucky to have a job come then?

grey01

Do you know if that just applies to PWC/KPMG in Ireland? Or is that a Ireland/UK email? Sorry - I work at EY and I know UK and Ireland are counted as one business unit there!

Kingkong

Got an email today saying they are going to announce something next week. Its hilarious how both KPMG and PWC made announcements today. It just shows how the Big 4 are just a cartel. They have more loyalty to one another than their own staff, the same staff that made them so much money in the past decade. I wonder how many partners were involved in advising the big banks that started all this in the first place.

Bren1609

Kingkong wrote: »

Got an email today saying they are going to announce something next week. Its hilarious how both KPMG and PWC made announcements today. It just shows how the Big 4 are just a cartel. They have more loyalty to one another than their own staff, the same staff that made them so much money in the past decade. I wonder how many partners were involved in advising the big banks that started all this in the first place.

Of course they are, go onto the cro website and see who the auditors of all the banks were and you'll seee that its rotated between the Big 4. There's no doubt in mind that E&Y were fully aware of what was goin on in Anglo.

Kingkong

Do you reckon the banks shareholders might try and sue E&Y?

censuspro

Kingkong wrote: »

Do you reckon the banks shareholders might try and sue E&Y?

Unlikely. But you have to ask what is the institute's stance on all this. Afterall they are ones ultimately responsible for regulating it's members.

suckslikeafox

Census_Pro wrote: »

Unlikely. But you have to ask what is the institute's stance on all this. Afterall they are ones ultimately responsible for regulating it's members.

Lets face it the big4 control the institute more so than the other way round, they'll publish some bull report and that'll be it.

Curious to see exactly what cost reduction measures the other 3 bring in now, and for those who don't know the one that announced cuts today promised more to follow soon...

Kingkong

I heard there was some Big 4 redundancies today. Is it true.

tall_paul83

yes and they are believed to be ongoing until the end of next week. I doubt anything will be announced officially as it's smarter from a business perspective to keep this hush hush.

schumacher

tall_paul83 wrote: »

yes and they are believed to be ongoing until the end of next week. I doubt anything will be announced officially as it's smarter from a business perspective to keep this hush hush.

Which Big 4 is this or is it them all? Can you sack trainees in the middle of a contract do you know?

tall_paul83

I'm not going to say which one it is to protect myself but yes you can definitely sack trainees in contract for various reasons - poor performance, inability to pass exams etc. Obviously it is cheaper to keep a trainee than keep a newly qualified accountant so I think that is the way they are going. The days of being handed a full-time contract upon completion of a trainee contract are gone, for now anyway. I've been suprised at the sudden level of bad news eminating but then again we aren't privy to the finer details. I think everyone is just in a little bit of shock at the moment as a big 4 accountancy job was always considering a job for life unless you had something bigger & better lined up. I can see a lot of these people being let go just heading away for a year and hoping things are better when they come back - I might be one of them soon!

schumacher

I am about to start my contract with one in October. Do you think that they would just say sorry we dont have a job for you? I wouldn't trust what HR would say as I am surprised too at all the bad news about the Big 4. I knew they would have to do something but now its getting serious.

tall_paul83

I'd be suprised if they cut back on next years intake. I genuinely wouldn't worry too much though because after all you guys are cheap labour!! Staff on wages below 35k were due to take a 5% pay cut so maybe re-adjust your starting salary expectation. Maybe if things get even worse they will ask some people to defer for a year or something but there's no way they will withdraw 150 or so contracts! Not a chance.

schumacher

Yeah thats what a lot of people have said. I just was worried. Yeah I'll probably earn less but I don't really mind as I just want to get qualified as then I could at least go live in a different country for a while and have a qualification.