Accountancy firms put recruitment on hold.....but tax is safe??
Tuesday, 8 July 2008
Source: AccountancyAge.com
Research reveals about 57% of UK’s top accountancy firms are putting recruitment on hold.
About 57% of UK’s top accountancy firms are going to reduce staff numbers or keep them the same next year, according to the latest research by online recruitment group cvmail, part of media giant Thomson Reuters.
Although only 5% of firms said they actually planned to cut staff, the survey signalled the first significant pause in the dramatic growth of accountancy firms since the 9-11 terrorist attacks.
‘The effect of the credit crunch on top accountancy firms has been felt in a slowdown in corporate finance work and may feed through into consultancy work,’ Andy Eddleston, cvmail commercial manager, said.
‘However, their core audit and assurance and tax work should be largely unaffected. It is hoped that the vacuum created by the slowdown in areas like IPOs will be filled with rescue and recovery work.’
SG comment: Reading the results of this article are no surprise, but I don't agree that tax departments will be largely unaffected. Some of the biggest fees that are made by top accounting firms are from lucrative tax consultancy projects on M&A deals or tax structuring advice. In a downturn economy, this fee income will drop dramatically, and the result will be to cut staff in these departments. Tax compliance departments may be less affected.
For more analysis on this, read my article on Recession, Redundancy and Re-hiring
Research reveals about 57% of UK’s top accountancy firms are putting recruitment on hold.
About 57% of UK’s top accountancy firms are going to reduce staff numbers or keep them the same next year, according to the latest research by online recruitment group cvmail, part of media giant Thomson Reuters.
Although only 5% of firms said they actually planned to cut staff, the survey signalled the first significant pause in the dramatic growth of accountancy firms since the 9-11 terrorist attacks.
‘The effect of the credit crunch on top accountancy firms has been felt in a slowdown in corporate finance work and may feed through into consultancy work,’ Andy Eddleston, cvmail commercial manager, said.
‘However, their core audit and assurance and tax work should be largely unaffected. It is hoped that the vacuum created by the slowdown in areas like IPOs will be filled with rescue and recovery work.’
SG comment: Reading the results of this article are no surprise, but I don't agree that tax departments will be largely unaffected. Some of the biggest fees that are made by top accounting firms are from lucrative tax consultancy projects on M&A deals or tax structuring advice. In a downturn economy, this fee income will drop dramatically, and the result will be to cut staff in these departments. Tax compliance departments may be less affected.
For more analysis on this, read my article on Recession, Redundancy and Re-hiring
Labels: Big Four, employment market, market view, tax careers, tax jobs
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