From 2004 to 2011, employees at Big Four Accounting Firms have increased by 210,000 or 48%. Also, 2011 revenue per partner reached $3 million.
New York, NY (PRWEB) February 06, 2012
Big4.com, the premier social networking forum for professionals and alumni of Accenture, Andersen, BearingPoint, Capgemini, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers PwC provides a detailed analysis of the employment situation at the Big Four Accounting firms. The review shows that combined net employment at Deloitte, KPMG, Ernst & Young, and PwC increased by 6% and revenue per partner reached $3.0 million in 2011.
FIRM EMPLOYMENT ANALYSIS
The Big Four firms cumulatively employ close to 650,000 staff all over the world, including partners, audit, tax and advisory professionals and administrative staff. This staggering number has been consistently on the rise from 2004, when cumulative employment was around 435,000 staff. In 2009, employment peaked at around 617,000. However, in 2010, as firms slowed hiring and outbound attrition reduced, total employment fell by nearly 7,000 to 610,000. In 2011, the situation reversed with hiring in line with revenue growth, boosting total employment by 37,000 net new hires to 647,000. From 2004 to 2011, the number of people working at just these four firms has increased by around 210,000, an increase of 48% over just seven years. And while revenues did increase 9% from 2010 to 2011, net employment increased 6% over this period. Typical annual attrition rate at Big Four firms was running about 15% prior to 2008. For example in 2008, the Big Four firms cumulatively would have made about 140,000 new hires to account for the loss of professionals and the additional revenue growth. This works out to about 550 hires for each business day of the year.
Even in 2009, assuming attrition rates had dropped to 10%, new hires in 2009 would be about 85,000 equating to about 350 hires each day. And in 2010, assuming that attrition rates held steady at 10%, new hires would be 55,000 or 200 per business day in one of the toughest job markets in recent history. In 2011, assuming that attrition rates again held steady at 10%, new hires would be 98,000 or 390 per business day in a difficult job market. Truly, Big Four firms are huge seekers of talent with correspondingly very busy recruiters even in a period of deep recession.
Elevation to partner at a Big Four firm is a tough and long process as every professional who has ever worked at a firm knows. Partners form an elite class within these large partnerships, and only one in about 20 people belongs to this exclusive club. In 2010, we estimate there were only about 34,000 partners in all the Big Four firms, overseeing a steep pyramid of about 460,000 professionals, thus the typical partner being responsible for about 14 professionals in 2010. In 2011, we estimate a small increase of about 1,000 new partners to a total of about 35,000 partners in all the Big Four firms, overseeing a steep pyramid of about 493,000 professionals, thus the typical partner being responsible for about 14 professionals in 2011. In 2004, the professional to partner ratio was only 11, thus partners are taking on more responsibilities in terms of professional management and development over the years.
Another metric that is closely watched is revenue per partner, in 2004, each partner was holding up $2.1 million in revenue, and this had crept up to $2.8 million by 2010 and further to $3.0 million in 2011, matching the prior peak of $3.0 million in 2008. In other words, each partner was expected to bring in and manage client revenues of nearly $3 million in recent years to justify his or her position in the highest levels of the firms. Clearly, making partner is only the beginning of a series of demanding client development and professional responsibilities down the road.
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