Trends In Accounting Employment

By: Tracy Levine, President – Advantage Talent Inc. and Michael Levine, Principal – Advantage Talent Inc.

What have employment trends been like for the accounting industry in both Georgia and nationwide in past years?  Looking back to the period from 2003 through early 2008, the trend was very positive for accountants in both ‘Industry’ and ‘Public Accounting’.  In mid-2008, many companies in ‘Industry’ reduced their hiring appetite, but ‘Public Accounting’ firms were still scrambling to find accountants at all levels to ramp up for the upcoming Busy Season.  By February 2009 (only 7 months later), many of these same ‘Public Accounting’ firms were forced to lay people off due to lack of demand for their services. 

Over the past several years was there a shortage of experienced Accountants?  From 2004 to early 2008 there were some minor shortages in ‘Industry’ but ‘Public Accounting’ experienced a shortage of experienced candidates for their positions.

What’s the overall landscape of Accounting Employment?  Today, the employment environment for both ‘Industry’ and ‘Public Accounting’ is mixed.  Some companies and some firms are expanding and others are contracting.

How has the recession impacted employment in the Accounting industry?  Unemployment within ‘Public Accounting’ and ‘Industry’ has increased significantly during the last 2 years.  Many of the ‘Public Accounting’ firms have cut staff, and large numbers of accounting professionals from ‘Industry’ are between jobs and looking for work.  The first half of 2010 saw some modest improvement in the government and healthcare sectors, but employment in many sectors continued to decline throughout most of 2010.

How has it impacted education in the Accounting field? Are there fewer students?   The number of students majoring in accounting has been steadily growing.  In fact, according to the last AICPA survey, 2008 saw the largest number of graduates in history.  This trend is expected to continue.  The major problem is replacing the Accounting Ph.D. Professors.  They are retiring in large numbers.  The current economy may help this problem.  Many of the new graduates who did not get hired continued their education.   The AICPA has a fund to help students who wish to continue their education and earn an Accounting Ph.D.

Are fewer people being certified as CPAs? Or is it just more difficult for those new to the profession to get jobs because of layoffs, consolidations, etc.?     Just like their peers, accounting graduates were affected by the bad economy.  According to a survey from the National Association of Colleges and Employers, only 19.7 percent of all 2009 graduates who applied for a job actually had one. 

The AICPA reported a significant drop in students sitting for the C.P.A. Exam when the exam was computerized that made it look like the number of students sitting for the exam had dropped 50%. The truth of the matter is there has been a small decrease. When the exam was given in paper form, if a student took the exam in May and November, they were many times counted twice. 

What’s in store for Accountants in the coming years?  We believe the demand for CPAs will be strong whether the economy improves or not.  New governmental healthcare/insurance regulations and Financial Reform regulations will require companies to put significant resources toward compliance.  International Financial Reporting Standards (IFRS) are scheduled to be implemented over the next few years. Some companies that have been putting off Merger and Acquisition activity or other transactions will get ‘back in the game’ at some point.  All of these activities represent good news for the accounting community because all of these issues create additional demand for CPAs.

Will employment numbers for Accountants (both in Georgia and nationally) increase again? If so, why?  According to the U.S. Department of Labor’s Bureau of Labor Statistics’ Occupational Outlook Handbook, employment for a number of accounting and finance specialties will rise as fast or faster than the average for all occupations in the coming years.  In fact, accounting was listed as one of the top 20 industries that would experience the most growth through 2018.  The MetLife Foundation and Civic Ventures, a think tank that focuses on baby boomers, predicts that a worker shortage could develop within 10 years as this group retires.  This will be particularly true for the Public Accounting Firms.  Many of the current Partners are part of the baby boomer generation.  Public Accounts at all levels will have more opportunities for positive career advancement as the top positions become available.  We have seen a huge pickup in hiring by Public Accounting Firms across the nation.  This trend should continue well into first quarter 2011.

Check out our National Public and Industry Accounting Jobs at http://www.advantagetalentinc.com/Job_Openings.html

The Devil Went Down to GA: Goldman Sachs vs. Credit Suisse-Noncompete Agreements

AtlantaBy: Tracy Levine, President, Advantage Talent Inc.

In February of this year, Credit Suisse lured away seven of Goldman Sachs’ top Wealth Managers.  Purportedly some were offered upwards of $10 million to move to Credit Suisse.  According to some of the articles written, Credit Suisse is the devil, and companies like them are the reason Georgia needs to change their view on noncompete and non-solicitation agreements.  It is amazing how much media this situation got in Atlanta that was not just gossipy news but highly politically charged news.  I am sure the defection did hurt Goldman Sach’s business.   However, Goldman Sach’s is hardly the poster child for reform.

How shocking, a Wall Street firm stole top talent from another top Wall Street firm.  Wrong.  This is not shocking at all and is business as usual. The top Wall Street Firms have been raiding each other’s top employees for decades.  In this instance, Goldman Sachs filed a lawsuit not against Credit Suisse, but against the seven wealth managers.  It was voluntarily dismissed the next day.  What makes this situation so ironic is that Goldman Sachs is no saint.  This is a situation of what is “good for the goose is good for the gander.”  In 2010, I believe the score is Goldman Sachs 55 and Credit Suisse 7.  Earlier this year, Vestra, a Goldman Sachs backed UK company lured an estimated 55 employees from UBS.  Shocking really shocking…..not.

Full disclosure: Back in the 1990’s, I was an employee who was lured away from Credit Suisse, then Credit Suisse First Boston, by Smith Barney with 3 other employees.  In that point in time very few people had non-solicitation agreements.  Obviously, Credit Suisse has more than thrived since then to have the money to lure people from Goldman Sachs for millions of dollars.  Over the past three decades, it hasn’t been unusual for the very top Directors and other top employees to be lured away from one Wall Street firm to join another and lured back by the original firm in a year or two.    

So why has this business as usual situation in Georgia led to many trumpeting the horn for stricter noncompete and non-solicitation agreements?  Wall Street already has a current master agreement that all Wall Street Firms and Investment Firms are encouraged to sign that says a firm will honor nonsolicit/non-compete employment agreements.  If Goldman Sach thought honoring non-solicitation and noncompete agreements were good for business in the long run, they would have signed it.  Or was it their arrogance of being one of the biggest or strongest bullies on the block that made them feel immune to the ramifications of not playing nice with others?  Credit Suisse is another firm that has up to this point not signed the agreement either; probably for the same reasons as Goldman Sachs.

Noncompete and non-solicitation agreements have been problematic for both employers and employees in Georgia’s current environment.  I agree Georgia needs to review their approach to non-solicitation agreements and noncompete agreements.  However, it needs to be viewed in a real context and not the lens of hyperbole.  Goldman Sachs is not a victim but the recipient of their own practices.  Yes, they might lose millions of dollars.  I am sure UBS probably lost millions of dollars also when Vestra hired their employees.

In the real world, it is not appropriate to leave each contract brought before the court to individual judge’s discretion on whether they are enforceable or not.  The Georgia Courts’ approach with these type of contracts is a little like defining pornography…I know a bad contract when I see one.  On the flipside it is not o.k. to go too far the other way by changing the Georgia Constitution to the point it makes it impossible for an employee to work for up to three years after leaving a company due to corporate downsizing.

In November, the public is going to be asked to vote to make the following changes to the Georgia Constitution in regards to non-solicitation and noncompete agreements.

H.B. 173, codified in relevant part at O.C.G.A. §§ 13-8-2.1 and 13-8-50 to -59, provides for a host of revisions to the current status of Georgia law on restrictive covenants.

  • Georgia courts will be allowed to partially enforce restrictive covenants that are otherwise overbroad, thus reversing Georgia’s strict and longstanding “no blue-penciling” rule;
  • provides that in-term restrictive covenants will not be considered unreasonable because they lack specific limitations on the scope of activity, duration, or territory, as long as the covenants promote or protect the purpose or subject matter of the agreement or deter any potential conflict of interest;
  • establishes a presumption that post-employment noncompete agreements with a duration of two years or less are reasonable;
  • establishes a presumption that post-employment customer and employee non-solicitation agreements with a duration of three years or less are reasonable;
  • permits employers to extend post-employment restrictions on customer solicitation to customers and potential customers with whom an employee did not have actual contact as long as, within two years prior to the date of termination, the employee supervised the employer’s dealings with the customer, obtained confidential information about the customer, or earned compensation, commissions, or other earnings as a result of the customer’s purchase of the employer’s products or services; and
  • permits employers to enforce post-employment restrictions on employee solicitation that lack an express reference to a geographic area.

See Paul Hastings Client Alert for complete information.

It is about time that Georgia did away with the non-blue penciling law that made it hard for employers to have any kind of meaningful protection.  The rub for the employee is that Georgia is an “at will” state.  A company can end your employment at anytime.  This wouldn’t be such an issue if noncompete and non-solicit agreements were only being signed by the very top level executives.  Up until recently, they were the only employees asked to sign such agreements.  Now many companies make all employees sign a non-solicit or noncompete agreement whether they are a top level executive or integral to the overall big picture or not.  It is hard to discern what the appropriate balance is for protecting the employer, the employee and the public’s intrinsic right to have free competition and the right to do business with whomever they want.

I would like to hear your thoughts on the amendments to the Georgia Constitution.  Is it not enough of a change? Does it go too far? Or do the changes strike the right balance? Why do you believe that some of the Wall Street firms don’t see the advantage of agreeing to honor nonsolicitation/noncompete agreements and completely ignore employment agreements?

What Candidates can learn from the Bachelorette!

If anyone has looked at internet trending topics, they will see that reality shows, such as, the Bachelorette rank toward the top.  Out of morbid curiosity, on Monday night, I watched the premiere of the Bachelorette with growing horror along with pure amazement.  WOW! People truly do not know what TMI (too much information) is.  While a certain amount of outrageousness is to be expected on an entertainment reality show, somehow this ease of sharing inappropriate information with total strangers and with the world has crossed the line into everyday life.  For those who have not watched any of the comedians or spoofs of the Bachelorette, one of the Bachelors explains how he received the name “Shooter”.  I will not go into it in this blog but a search of the Bachelorette and the word “Shooter” will bring up this truly amazing and unbelievable revelation.  This Bachelor did not receive a rose and will probably never go on another date….ever.

Unfortunately, over the years I have seen professional candidates, like this Bachelor, who did not know what is appropriate or funny when dealing with their job search and employment.  For example, I placed a candidate in a management job with a major company.  An offer was extended and accepted.  In the end, the job offer was rescinded.  Why?  When filling out the requisite company application paperwork after the question, Sex, the candidate wrote, “As often as possible!”  When I received the call from the Client explaining why the candidate was no longer welcome at the company, I could not believe what I was hearing. 

Recruiters help candidates with their resumes and prep them for interviews.  However, it should be obvious that any references to topics, such as, sex, politics and religion have no place in the job hunting and employment process.  Nothing seems to be off-limits on Reality T.V. anymore, but that does not translate to everyday life and career moves.  If you want the rose, job offer, DO NOT share inappropriate information or discuss inappropriate topics.

By: Tracy Levine, President, Advantage Talent, Inc.