Talent Crisis Brings Threats And Opportunities to Accounting Profession
13 Feb 2006

The powerful rebound of Hong Kong economy intensifies the problem of shortage of talent in the accounting profession. The competition for high calibers among the Big Four spreads to small-to-medium accounting firms and commercial corporations, and even the tertiary education institutes are facing a brain drain of teaching faculties in accountancy.

CPA Australia Career Market Day attracted over 500 local talents
The Hong Kong and China Division of CPA Australia (CPA Australia HKCD) hosted its annual Career Market Day on 21st January, attracting over 500 graduates and young professionals to come and learn more about the current employment opportunities and trends in the public practice sector. They could also submit CVs and meet the potential employers and human resources personnel face-to-face during the event. Exhibitors include: Baker Tilly, BDO McCabe Lo Limited, Deloitte, Ernest & Young, Grant Thornton, Horwath, KPMG, PricewaterhouseCoopers, Moores Rowland Mazars, and RSM Nelson Wheeler. Among the ten exhibitors, eight of them received a total of over 400 CVs during the event, and the other two accepted online applications.

According to the findings in the Third Quarter 2005 Survey on Manpower Statistics conducted by the Hong Kong Institute of Human Resource Management (HKIHRM), the financial services / banking / insurance sector records a turnover rate of 8.62%, which is the second highest among the six groups in the survey. In fact, despite the economic downturn in the past couple of years, overall speaking, the accounting profession had a two-digit percentage salary increase.

Sound staff retention plans to protect corporates' greatest financial assets
Mr Patrick Yeung, President of CPA Australia HKCD, maintains, "IPO activities in Hong Kong's stock market reached a record high in mid 2005. Lots of accounting professionals were needed throughout the process of IPO, from the pre-listing auditing to the post-listing annual financial reporting. That explained the reason behind the shortage of talent in the profession." The situation has been exacerbated by the limited number of quality graduate training programmes in place for Hong Kong's accountants, compared with other markets around the world.

In view of the quest for high calibers, audit firms make every endeavor to retain staff. New policies to improve working environment and to facilitate better internal communications are implemented. According to Gigi Chow, Recruitment Director of Ernest and Young, "People first" is the underlying philosophy of the company's human resources management principal. "We strive to provide a comfortable working environment for our staff. Even small things like coffee from our pantry, if our colleagues are not happy with the taste, we will buy some other coffee beans right away. Moreover, an anonymous system for voicing out opinion has been put in place. We have set up an email system for staff to express their views to partners without showing the sender's name," says Ms Chow.

Who are the most-wanted employees in today's accounting profession? Ada Tam, Deputy Human Resources Manager of PricewaterhousCoopers, expresses that those with three to five years of accounting and auditing experience, who are senior auditors by rank, are the hottest-picks in the market. "In the past three to five years, most of the audit firms underwent a down-sizing process, which meant hiring less staff during the period. That is why we are now facing a shortage of staff with three to five years of experience," describes Ms Tam.

How to minimize the turnover rate? Ms Tam explains that a "We Care Policy" has been set forth to show the company's concern to the colleagues. For instance, giving extra day-offs before or after public holidays, and providing staff training to help colleagues better equip themselves.

Besides, regarding the shortage of experienced staff, Ms Tam says the company will try to absorb more manpower from the market, and at the same time train up junior staff to fill the gap. Does it mean a faster promotion pathway? Not necessarily. Yet of course there are more chances of getting promoted. Ada stresses that staff promotion will depend on performance in the four major areas, namely interpersonal skills, technical knowledge, client services attitude and project management proficiency.

Mainland market brings both opportunities & threats to Hong Kong talents
When talking about the career opportunities in Mainland China, Mr Richard Ho, Vice President of CPA Australia HKCD, points out that mainland accounting professionals are becoming more competitive, "The Big Four have been recruiting staff from mainland for some years. They are mainly graduates from renowned universities such as Peking University and Qinghua University. Quite different from the general perception, mainland staff's salary level is not far below than that of Hong Kong staff's. This is the direct result of a booming economy and the absence of staff loyalty, many people have chosen to change jobs frequently, creating a tremendous demand to fill vacant positions." The most competitive edge of mainland accountants is their familiarity with China's laws and regulations, as well as their understanding of the local context in which the enterprises are operating." Mr Ho says. China experience is what Hong Kong accountants needed so as to compete with the mainland counterparts.

Nevertheless, the rapid growth of the state and private enterprises in mainland China generates a huge demand for cross-border listings, which require lots of experienced accountants from Hong Kong to provide the finance and business services in order to comply with the international accounting standards. Mr Ho explicates, "As long as the Central Government continues its control on foreign exchange and unpredictable interventions to the financial market, these market uncertainties will render Hong Kong to serve as the mediator between mainland and the global economy, and help mainland to enhance its accounting standards so as to link up with the international practice." Mr Ho predicts in five to eight years, mainland will catch up with Hong Kong's accounting standards, provided that there shall not be a major shift in economic policy from the Central Government. Meanwhile, Hong Kong professionals should grasp the chance and take the lead in exploring career opportunities before it is too late to enter mainland's market.

In the past, working up north will be rewarded with extra allowances. However, now it has become a usual job requirement and extra pay will not be given. Mr Derek Lai, Deputy President of CPA Australia HKCD, thinks that China experience is a good exposure that cannot be measured by material rewards. "Working up north is a chance to understand the mainland culture, which widen one's horizon. Some Hong Kong accountants are very willing to take the chance and voluntarily propose to work in mainland. They can then share their mainland experience with the colleagues in Hong Kong. This is a good cultural exchange. It is expected that working up north with the same salary package will become the trend," says Mr Lai.

Many audit firms use pay rise to retain its staff. However, Mr Lai considers it not an ideal way. "Salary increase has its pros and cons, and can only help retaining staff on a short term. In the long run, providing professional training is the more appropriate for staff retention. Knowledge is a personal asset that no one can take away from you. If the employees can acquire more skills in the company, it may help enhance their willingness to stay longer," explains Mr Lai.

Although salaries are climbing rapidly, with the relatively low inflation rate of 2.5% forecast in Hong Kong this year, the justification for salary rises is based on retaining valuable employees and rewarding outstanding performance. Most recruiters forecast another positive year in Hong Kong and the mainland, While enjoying the pay rise and plenty of employment opportunities, local talents should also get themselves prepared to face all the challenges ahead.