September 18, 2018

Big 4 Exodus

Big 4 Firms Are Planning for Your Exodus

For some time now, Caleb has been touching on the upcoming/ongoing/always-occurring exodus from Big 4 into the private sector. The obvious reasons for the change from public to private are obvious, but here’s a few for kicks:

• Bigger pay day (and potential growth)

• CPA requirements completed

• Actual work/life balance

&ill set transition to a new career

There are other reasons of course, but it is the ferocious combination of these that leads to the breaking point – low morale.


Going Concern received an email from a distraught and burnt out Big 4 auditor from the Southeast region:

The level of morale in the [XYZ] office is at an all time low. Discussion with low level staff, through managers, have yielded the same opinion of overwhelming expectations without the needed support from the firm. They want us to draw blood from a turnip, and they want it done better, faster, and with less resources than last year. This has caused everyone to start exploring options in the market. A vast majority have started fielding resumes and contacting recruiting firms. The select few who have made it past that hurdle are interviewing with no looking back.

Not to downplay what this auditor is saying (and I’m not), but this sounds like the unfortunate reality of many auditors working on smaller, non-public clients. You know, the not-as-sexy-as-ABC Bank but just as important to the firm’s bottom line. You won’t get tickets to the pro sport’s game, but thankyouverymuch for your efforts.

The reader goes on:

Primarily, people have expressed their interest in holding out any real intentions of leaving until promotions roll around in the later part of the summer. They’re hoping that maybe there will be some juicy 20% raise waiting for them, but the stark reality of a measly 5% raise is what they know is coming. Any fifth year Seniors who are waiting for the promotion to manager are just using it for resume purposes.

Our offices are already using under qualified second year staff at the Senior level, as well as retaining new managers in the Senior position because they are extremely understaffed at that level. This, in turn, is causing all of those people to take measures to leave perhaps after busy season and certainly after the insulting promotions come through in August.

It’s a matter of time before this individual (and half of their respective office) becomes another statistic that the Big 4 HR guru’s term “natural attrition.” From an HR perspective, here’s a loose idea of the attrition formula:

Fall 2010: 100 new hires

Fall ’11: 95 new hires become “2nd years”

Summer/Fall ’12: 88 2nd years promoted to senior staff, 70 seniors remain

Summer/Fall ’12: 2 years of public experience reached, 55 seniors remain

Summer/Fall ’13: 45 seniors remain

Summer/Fall ’14: 35 seniors remain

Summer/Fall ’15: 25 seniors remain; 15 promoted to manager, 10 remain on as seniors

Summer/Fall ‘XX: 10 senior managers are eligible for partner

The recession stunted this formula for every firm, as they were forced to make cuts, not only for cost cutting purposes, but also to keep their staffing formulas close to being in-check. But think about it – your firm expects this kind of turnover. They know it’s a matter of time before their hiring class is whittled down to 10% of its original size.

And in the case of the reader, their firm dropped the analytic ball 3-5 years ago. Had they better estimated the percentage of projected losses, there would be more seniors to handle the work.

Remember that time you felt bad about leaving? They’re waiting for you to do so.

Has the Post-Busy Season Big 4 Exodus Already Started?

Seems a tad early but with two major deadlines passed, it’s possible that the Spring 2010 exodus may have started.

From one Big 4 auditor, “[A]pparently the DC and/or Philly office just underwent some serious turnover – my [schedule] just got all kinds of fucked up and my performance manager’s explanation was that “we’ve had some turnover and you have been shifted around as a solution.” So that’s cool. And by cool, I mean WTF because there was no warning, and it seems to be changing every few hours now.”


Our source continues:

Not a clue just how much turnover or if it was limited only to the audit practice, and how the turnover took place (I’m assuming people are quitting, as that is what pretty much all anyone at my level can talk about lately), but it was enough that I just went from two normal-hours clients to five “plan on overtime” clients. (It was six clients last night, but it looks like it got switched up again this morning.)

If there’s one thing that may cause violence more than someone quitting in the middle of busy season, it’s getting assigned to a “plan on overtime” client in the second half of March.

It’s likely that the timing of people leaving is an office by office phenomenon as one of our New York sources said that people aren’t leaving but “everyone wants to, but that’s nothing new.”

So if people are heading for the exits in your office, forced or otherwise, let us know.