Ernst & Young has been trying to recruit more young people to join the accounting profession, but the recent cancellation of high-profile plans for splitting the consulting and audit sides of the global network has left the firm trying to quell uncertainty and resentment.
The firm announced plans last month to cut 3,000 employees in the U.S., close to 5% of its workforce, soon after the failure of its so-called Project Everest plan for spinning off the advisory side into a publicly traded company. That’s part of a $500 million cost-cutting program over the next 12 months. EY’s member firm in the U.K. announced a similar cost-saving program. Not surprisingly, other Big Four firms and smaller firms are seeing the opportunity to pick up much needed talent to fill their ranks.
At the same time, EY doesn’t want to lose all the talent it has been working so hard to develop and retain over the years. Most employees are remaining with the firm, despite lingering uncertainties.
Jack Taylor/Getty Images
“None of that really affected their day-to-day work,” said Dilek Çilingir Kostem, EY’s global assurance talent leader. “What we heard from them directly is that they don’t feel any impact at all. We haven’t actually had any people that left us as a result of that. There are obviously regular exits, but we also have exit interviews just to make sure that if there’s a risk, we mitigate it, but I can’t say that this really affected them. Yeah, we can see that there are some firms approaching our people, but they’re looking at it as it might be tough for now, but at least our firm tries such a bold transaction. They’re looking at it from a positive perspective.”
EY’s people and organization may have learned some lessons from the attempted split.
“We had several things that we learned, which would be a lot of positives for our people and for our organization going forward,” said Kostem. “We were working on this project, but now we are one EY, and we will continue to get whatever skills we need, either from assurance itself or from consulting or strategy and transactions. We’re just going to need to work on as we used to before. At this point, that’s how we are continuing.”
Like other firms, EY has been doing its best to recruit young people who probably haven’t been dreaming of a career in auditing and assurance and may have negative images of the accounting profession. However, other areas like technology and sustainability consulting may be more enticing, especially as EY will remain a unified accounting and consulting firm.
“It’s not an easy fix,” said Kostem. “There are several things that we’re trying to do at the same time. Technology and sustainability, we think these topics will help.”
Last year, EY announced it would invest $1 billion in next-general audit and assurance technology. The extra funds will help the firm audit large, complex globally connected companies using data analytics, artificial intelligence and other advanced technology to root out financial problems and fraud. The firm is also leveraging blockchain technology to audit companies with cryptocurrency assets.
“The skills of the auditors are not only accounting anymore,” said Kostem. “Now they need broader technology skills. The people we started to hire now are not only accountants. We’re also hiring STEM graduates who are really good with coding and data visualization. Then it also makes things interesting for our other people as well. Although they might not be coming from a tech background, they need to really understand the complexity of these businesses in such a way that they can identify these risks. It’s not only about using this technology, but identifying these risks and making sure that they use the right technology at the right time.”
The firm has been investing in upskilling its employees to learn about the latest technology and keep them interested.
“We know this generation is very into lifelong learning,” said Kostem. “They are curious, and they like to develop themselves.”
The firm now provides an EY Tech MBA program in conjunction with Hult International Business School. “This is the first fully accredited corporate MBA that we’ve provided to our people,” said Kostem. “When they’re working with us, they’re able to also actually graduate from EY Tech MBA.”
EY is also offering a master’s in sustainability program with Hult. “Sustainability is an area that every company needs to be mindful of, and non-financial reporting is very important,” said Kostem. “Our people are also very interested in this.”
The firm has introduced a digital badge program called EY Badges to incentivize employee upskilling and career development by earning badges for taking training sessions and experiences.
“These badges are shorter programs compared to the Tech MBA,” said Kostem. “These badges include all sorts of upskilling. If they would like to grow themselves in hybrid working, they can do that. If they want to do that with empathy, we have a badge. If they would like to have this with blockchain specifically, they can have that. We have a wide range of EY badge programs that people can reach whenever they want.”
Learning new skills can also help allay fears that accountants are going to be replaced by AI programs like OpenAI ChatGPT. A study released in March by researchers at the University of Pennsylvania and OpenAI found accountants and auditors to be among the most vulnerable jobs. But AI technology can also ease time pressures on accountants and auditors who stay in the profession.
“Our people will obviously have this technology as well,” said Kostem. “In the long term, people might be affected or impacted, but at the moment, work-life balance is an issue for auditors. One of the things to increase the attractiveness of the profession is by bringing in this AI, having them actually focus more on the business side of things, rather than more administrative things, we feel it will be more attractive to people.”
She believes there will still be demand for more auditors who can focus on bringing value to their clients by using advanced data analytics to help them understand business risks, as well as do newer types of non-financial reporting on areas like sustainability.
“There’s a lot of new work to be done there,” said Kostem. “We’ll need a lot of auditors to be able to start working on that more as well. One of the things we’re trying to do is to have a better day-to-day life for our people. We call it smart delivery. We are now creating centers of excellence, even for some of the admin work, so our people will not need to do routine work. It will be worked on by an expert, who is used to working on it all the time. The centers of excellence will make everything a bit more efficient, but also give our auditors a chance to really go back to the business risks, talking more to their clients, understanding their issues, and bringing the value back to them.”
EY is continuing to attract talent, despite the labor shortage in accounting and other sectors, and the uncertainties generated by the recent plans to split that were ultimately shelved.
Overall the assurance side of EY has 115,000 people working across the globe this year. The firm received 700,000 applications and 500,000 applications for internships, and out of that talent pool, EY hired 43,000 people globally.
“Compared to 10 to 15 years ago, you might think the attractiveness might have gone down a little, but when you look at the numbers, they’re strong again,” said Kostem. “When you look at the retention numbers, after COVID, like the other firms we struggled with retention, but now it’s going back to around 75 to 80% again, based on the country, which was actually a good number for us before COVID times.”
EY’s people go through 8 million hours of training per year in assurance, she noted, or approximately 85 hours per person.
“Going forward, in order to continue attracting people here, we need to continue to invest in developing business leaders,” said Kostem. “It can’t be ‘OK, you’re an accountant, and you will continue to be that way.’ No, it shouldn’t be that way. I think we need to invest in our people to upskill them in all these technology skills and soft skills that business leaders need to have going forward. It’s OK if they stay with us for three years, five years, or till the end of their career. We need to invest in growing them as business leaders because that will be good for our company, for other companies, for the business world, and for that person. We make them reach broader experiences if they start in audit and would like to then go on and work in sustainability for six months. We will be able to have a broader range of skills, and then if they want to continue in, let’s say, forensics for another six months, that’s good too. Then they can go back to being an auditor. If you look at our leaders at the firm today, the most successful leaders are actually coming from diverse backgrounds. That’s what we need to continue doing. They can be experts in some of the areas. That’s OK, but we’d like to actually provide them with any opportunity and experience they would like to have, also with other geographies. As a global organization, that’s our advantage. They can basically do the same work in New York or in Sydney or Tokyo. We would like to continue giving them that opportunity as well. This is the way to go, to continue increasing the attractiveness of the profession by building business leaders.”
Credit: Source link
