A major part of a recruiter’s success is knowing what’s going on in the job market and getting in front of trends in the local market. Since we talk to hundreds of people every week we get an opportunity to ask them what they think about business trends in the Valley and how they are feeling about their own career prospects. We also read lots of articles, blogs and tweets about technical developments, V.C. funding, professional publications (ours and the accounting profession), economic reports, earnings releases, job postings, etc. to stay informed about our local business market. One of my jobs is to evaluate all this information for its potential impact on the job market for accounting professionals. What I’ve learned recently leads me to believe that the following two trends are emerging in the job market for accounting talent: 1. Valley firms will increase their use of contract and/or temporary services significantly in 2010, and 2. Regular full-time hiring will be stronger than 2009, but will not be as strong as the pre-Great Recession levels.
Contract Services
The January 8th edition of Forbes magazine had a great article about employment and its corollary, unemployment. The article stated that a recovery in the temp services business is a leading indicator of a rebound in employment. Nationally, temp services added 166,000 new jobs from July through December, 2009. 47,000 of those new jobs happened in December. The use of temps is trending up, and indicates that fulltime hiring will begin to increase in 2010. Kula is also seeing an increase in temp/contract orders and a decline in the number of candidates currently available to take these assignments. The demand for exempt-level accounting temps/contractors is increasing and the supply is starting to tighten. For Kula, this means we need to spend more time recruiting temp service candidates to be able to meet the needs of our clients.
Regular Full Time Hiring
My twenty plus years of staffing industry experience tells me that hiring will improve in 2010. As I mentioned earlier, temp services have always led the jobs recovery in the Valley, and I believe the same will happen again in 2010. Our new order flow began to pick-up in the Fall of 2009 and is continuing to grow. The year end survey we made of 200+ financial executives shows that the business climate is much improved compared to a year ago particularly in technology. While the mood is much improved it is still a cautious optimism. There are still some clouds in the sky: The record high unemployment, the budget crisis in California, two wars going on, and the unresolved commercial and residential mortgage problems come to mind. Any of these issues could spark a “W” economic trend (another dip before “final” recovery). In spite of these issues, about thirty percent of Valley firms expect to add staff this year. When you add normal staff turnover to the mix (and historically we have seen that turnover is higher after a recession), over three-fourths of Valley firms will need to hire accounting staff in 2010.
These hiring trends bring me to my last point: The job market for technical accounting and tax professionals will turn from a buyer’s to a seller’s market. The talent pool has not grown much from pre-recession levels while demand continues to increase. Take a look at the San Jose Business Journal’s Book of Lists published this month. Unless they forgot to update the numbers, the Top Twenty-Five Accounting Firms listing shows very little movement in the number of accounting professionals and the sub-set of those who are CPA’s. For example, the Big 4 firms have a total Silicon Valley headcount of 3153 and about 1050 of those are CPA’s. These numbers are identical to the numbers listed in the January 2009 Book of Lists. 2009 was not a great year to work for one of the Big 4. Almost every one of them had a workforce reduction (or two) in 2009. Most of the Big 4 moved out promotions and elected fewer partners than in past years. The recession took its toll on the accounting profession. At their current staffing levels, I’m predicting that less than 400 of these Big 4 CPA’s will enter the job market in 2010. I posted a blog a month or so ago about the number of CPA’s in the San Francisco Bay area. If you haven’t read it, please do as it will give you a more complete picture of the size of the talent pool.
So what does all this mean? The longer companies put off adding technical accounting or CPA talent the harder it will be for them to attract “A” talent. My advice for 2010 is to always be looking for top talent and hire them when they are available. Think like the Yankees do and go get the best people, even if that means stockpiling a couple for future needs. Plus, the IFRS/GAAP convergence issue (and others) will begin to be a big deal in 2010, and big deals mean more work for finance and accounting departments.
Next week I will post a blog about how to hire in a seller’s market. Of course, I’ll recommend using Kula to help you attract the talent you need to succeed in 2010! That’s part of my job, too. Like Mr. Good Wrench (before GM went BK), pay us now (and beat the rush) or pay us later (and be one of many seeking the same “A” players).