Accounting Opportunities Abound

January 30, 2006
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GRAND RAPIDS — A set of data has suddenly reversed its curve in the accounting field.

Take, for instance, Beene Garter LLP, West Michigan’s largest locally owned accounting firm. For years, productivity gains have driven headcount down, even as revenue increased. Business there has grown 30 percent over the last five years, while its work force has decreased 20 percent.

This year, the growth continued. At the close of its last fiscal year, revenue had increased more than 12 percent. At the halfway point of the current year, the firm is trending toward 15 percent growth. But despite technology investments, service partnerships and efficiency improvements, it hired twice as many candidates last fall than in a typical year.

“We did more hiring than we have in quite awhile,” said managing partner Tom Rosenbach.

The firm “doesn’t measure how big it is by people,” Rosenbach assured. The company’s pay-for-contribution plan encourages staff contributions in lieu of staff additions. He takes pride in the firm’s efficiency gains — it has tripled its payroll area without adding a single employee.

“But we’re about as low as we can go. We’re looking for people in a lot of areas, and they’re hard to find.”

Beene Garter is not alone in this trend. The West Michigan office of Crowe Chizek and Co. LLC hired 13 candidates off college campuses last fall, adding to a dozen hired from the prior year. Plante & Moran PLLC is up 10 percent in West Michigan this year, with managing partner George Riddering reporting that the company “hired more new starts than we ever have in Grand Rapids.”

The Rehmann Group went from 55 accountants to 70 in 2005. In three years, BDO Seidman LLP has seen its local workforce grow by 25 percent; Ernst & Young added 25 accountants to its audit practice alone.

Nationally, federal estimates predict the accounting field to grow 18 percent to 26 percent by 2014. The state’s labor office is expecting annual growth of 14.4 percent, or 521 new jobs annually, until 2012. The Grand Rapids area is projected to produce 77 of those new jobs a year, for annual growth of 18.4 percent.

Depending on the source, average entry-level salaries range from $40,000 (salary.com) to $50,000 (U.S. Department of Labor). Pay in the sector has increased 10 percent or more, according to CareerJournal.com, with experienced team leaders commanding 20 percent more than a year ago. Recruiting firm Robert Half Inc. is reporting bidding wars for CPAs with three to five years of experience, with top candidates commanding base salaries in the high $60,000s.

Much of the job growth has been attributed to passage of the federal Sarbanes-Oxley Act in 2002. Commonly referred to as the “SOX” law, this response to the Enron, WorldCom and other corporate scandals dramatically increased the responsibilities of internal and external auditors for publicly traded companies, while its Section 404 regulations created an entirely new market for compliance consultants.

Meanwhile, the demise of Big Five firm Arthur Andersen jettisoned billions of dollars of business into the market. And, parallel to that, the nation’s supply of accountants had sunk frighteningly low.

According to the American Institute of Certified Public Accountants, the number of bachelor’s and master’s accounting graduates dropped from 61,220 in 1995 to a low of 44,695 in 2002, likely drawn to other business majors by the dot-com boom of the late 1990s.

Many states, including Michigan, adopted policies that slowed down the production of accountants by requiring 150 credit hours before taking the CPA exam. Another factor is the aging population of the baby-boomer-dominated field. In the state’s projections, the number of “replacement jobs” opening each year will equal the number of new jobs.

Steve Goldberg, chair of the accounting department at GrandValleyStateUniversity, questions how this shortage occurred in the first place.

“For good students who present and communicate well, there has always been good opportunities,” he said, and dismissed the characterization of it as a “boring” profession. “Traditionally it has been viewed that way by people who don’t understand it.”

In reality, the profession is characterized by high wages, comfortable working environments, and as one of the few occupations where entry-level employees work closely with clients’ high-ranking executives. Even when hiring at the major firms is flat, there is still ample opportunity in industry.

“Now, I think the Enron and WorldCom disasters have brought some light to the profession,” Goldberg said. “The word has gotten out about how good the job opportunities are.”

GrandValley’s region-leading accounting program is experiencing a renaissance. The school had 15 percent more accounting majors last fall than the year prior; 50 percent more than 2003.

“SOX made accounting popular on campus again,” said Rehmann Group Managing Partner Don Burke. “It’s elevated the profession.”

Goldberg and staff were especially impressed with the 112 students in GrandValley’s two fifth-year programs, Master of Science degrees in taxation and in accounting: Half of the students were not accounting majors as undergraduates.

“People are looking at the job market and coming back to become accountants,” he said.

The Winn family highlights this trend. Keith Winn’s two college-age children currently work at his Grand Rapids based green-design consultancy, Catalyst Partners. Already in a field perceived by many to be more fascinating than accounting, both chose the latter.

Jordan is a senior accounting major at GrandValley, while his sister, Andrea, is a junior at HopeCollege. Jordan first graduated from Grand RapidsCommunity College with a degree in electronics.

“I took a complete opposite direction,” said Jordan Winn. “The growth and opportunity is a part of it. I’ve always been good with numbers, and I was encouraged by my professors to go into accounting.”

If the number of students in the region’s other accounting programs combined can even match GrandValley’s 396 undergrads, West Michigan colleges will, in the near future, outpace the state’s projections for the region. Yet, insiders discount the notion that there might be more accountants than jobs.

“That hasn’t happened in my 20-year career,” said Dave Hoogendoorn, managing partner of Ernst & Young LLP. “This is a profession where, regardless of the economic situation, companies still need to be audited; people still need to pay taxes.”

Hoogendoorn said that he doesn’t feel there is currently a shortage of entry-level accountants. That’s a sentiment supported by many of the firms interviewed: The problem has been in finding experienced candidates.

Tom Hiller, managing partner of BDO Seidman, said that his firm has been forced to recruit globally.

“If we can’t find these resources locally or from another office, we’ll look wherever we can,” he said.

He added that offshore outsourcing should not have the impact on the industry as once widely anticipated.

As an example, Hoogendoorn said, 80 percent of auditing work is done in the field.

“You can’t take this overseas,” he said.    

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