The global economic crisis has left an unwelcome mark on the so-called “lost generation” of professionals. Graduate employment prospects in many affected countries are the bleakest they have ever been. That said, it is fast becoming clear that in this competitive job market you need more than a solid degree.
In conjunction with the European Business Awards, we recently surveyed 500 business leaders from 32 European countries. Their comments reflected that when hiring, they rate characteristics like confidence, enthusiasm and an entrepreneurial spirit far higher than a strong academic degree or business acumen. Over 80 percent of those surveyed said personality traits are more important than tangible and testable skills.
Many firms are moving away from traditional interviews and toward all-encompassing assessment days, where candidates are assessed not only on their expertise and knowledge but also, and just as importantly, on their personality fit within an organisation’s culture. For example, our UK member firm, RSM Tenon, reports that when hiring entry level trainees, they, of course, look for quality degrees, “but equally important is ambition, determination to succeed and commercial awareness.” Similarly, our Irish member firm, RSM Farrell Grant Sparks, notes that “while strong academic credentials are important, we look for motivated and ambitious graduates who can demonstrate an interest in accountancy, an ability to relate to clients, commercial awareness and a commitment to teamwork.”
With these criteria being used to inform hiring decisions, we can look forward to working with a generation of young professionals whose wider range of skills, rather than qualifications alone, will help boost business growth at a time when it is desperately needed.
You may have seen a report in International Accounting Bulletin yesterday drawing attention to findings from Paul Gillis, a visiting professor of accounting at Peking University’s Guanghua School of Management.
Paul discovered a Big Four only lending clause in a loan agreement issued by the state owned China Development Bank (CDB) to Harbin Electric as part of a privatisation proposal.
The smallprint of the loan facility agreement stated:
No Group Member may replace the Auditors, unless the new auditor to be appointed is any of Deloitte & Touche, PricewaterhouseCoopers, Ernst & Young and KPMG.
It is examples like this from a state owned bank in a major global market that demonstrate just how prevalent these clauses actually are.
The dangers of audit concentration are well documented. The significant disruption that would occur in the event of one of the leading players leaving the market unexpectedly – a scenario that is all too familiar following the Enron scandal less than ten years ago – is clear, but moreover in the interests of a fair and open market, examples like this CDB clause need to be consigned to our profession’s history.
At a European level we are pleased to see scrutiny of such matters led by Commissioner Barnier and as you can see from my post earlier this year on Challenging Audit Market Dominance we are actively involved along with others of our peers in encouraging Europe’s legislators to recognise these issues and take action.
Any such legislation needs to prohibit contractual clauses and any other institutional bias in favour of the four dominant firms. But it is clear this is not a problem confined to European borders, and authorities globally need to pay attention.
You may have seen the media interest around recent reports regarding a former female employee of KPMG US who is filing a $350m class action lawsuit against the firm. I read with interest the opinion of Arvind Hickman, the Editor of the International Accounting Bulletin, in his report about the case.
While this case brings to light that gender equality is still very much a corporate culture issue (certainly not restricted to the accounting profession), I believe it is equally important to recognise that gender imbalances are, albeit slowly, being addressed around the world.
Take our US member firm as an example. More than half of the employees at RSM McGladrey, are female. The firm is also listed in the 2010 Working Mother 100 Best Companies list, and importantly, 37 percent of its female workforce is in a senior management position.
The International Accounting Bulletin’s recent coverage of the KPMG US case provides some geographical trends worth sharing:
“Russia has the largest proportion of women at senior level with 37 percent.”
“In the UK, only 6 percent of senior positions were held by women in 1998. In 2008 this had grown to 20 percent.”
“In South Africa, 29 percent of partners and senior executives are women…”
These statistics are encouraging but there is clearly still a long way to climb on the equality ladder and large question marks on how to tackle this issue. Back in February I wrote a blog post about what impact the Lord Davies Enquiry might have on women taking senior management positions in UK boardrooms. There is global progress on these issues – slow change is better than no change.