Big 4 firms (and even mid-sized and small firms) are notorious for their high turnover rate. As a matter of fact, I just read that the average turnover rate in the Big 4 is somewhere between 15% to 20% every year while other industries are just averaging 5% (Note: the study was done two years ago, before the recession set in, the average rates may actually be higher during the crisis)! I won’t say if these rates are reasonable or not but turnovers have become so much a part of life of the Big 4 that they have targets for it and even have plans to lower the rate.
In my 8 years in a big auditing firm, I’ve seen my share of people who left the firm. From my co-juniors (when I was just starting out) to my co-managers and even to myself, it seemed like a never-ending exodus of auditors going out of the firm and even out of audit.
So why do these auditors leave? If the Big 4 is such a great place to work in and to get good training and great audit experience, why do we still see juniors, seniors, managers and even partners leaving the firm? I don’t have the hard and fast answers but in all those years, I had the chance to ask my co-auditors who resigned from the firm and I will share some of their answers here.
- The grass is greener…on the other side of the fence. The number one reason? Money or financial reasons. Don’t get me wrong, salaries in Big 4 are okay. But they’re not really that big and well, private companies pay bigger salaries. And if you have loans to pay or a family to support; or if you just want to live a better life, this can be a very good reason for leaving. Of those people I saw leave the firm, maybe about 60% to 70% left because of this reason.
- The other company’s (and even firm’s) offer is too good to resist. This is not only based on salaries, it also includes perks. Perks such as giving you a car, giving you company shares, more benefits, less overtime, giving you a chance to travel to other places and even in other countries. The list can just go on and on. I have a former senior (I was her manager) who resigned to become a chief accountant. Two years later, I saw from her Facebook account pictures of her visiting other countries (with her family in tow). Turned out she was sent there for certain job assignments and the company allowed her to bring along her family (the company subsidized some of their expenses). Lucky her!
- They don’t like their clients / boss. I had a fellow junior who, after finding out she’ll be assigned to the same client for the next busy season, promptly served her resignation letter to her boss! Obviously her reason was, she does not like the client (like may seem a mild word, okay, she hates the client). Or there’s this other junior who was constantly at odds with her manager that she left after just one busy season. Of course, she wouldn’t admit it but, knowing their history, we could read between the lines. Resigning because of the client or the boss is not quite as common as the first two but they do happen. And when they happen, you can be sure that client or that boss will be avoided like a plague by the other juniors.
- Health reasons. Okay, I’m not trying to give you a panic attack or something. But it is true that sometimes, people leave the firm because they want to stay healthy or to manage their blood pressure (which is perpetually high during the busy season) or to live a longer life. I’m just kidding on the last one. Seriously, the Big 4 is not for everybody and sometimes, being in a Big 4 can wreak havoc on one’s health. Some people just deal with it by taking in more and more medicines (and staying on the firm) but other people, well, they deal with it by leaving the firm.
- Family reasons. How does family become a reason for leaving the Big 4? Let’s count the ways. One, your family pressured you to leave the firm because they see that you are looking very, very tired, are often sick, have dark shadows under your eyes and have no time to visit them anymore. Two, the family is banking on you to earn more money because you are helping them out financially so they pressured you to leave the firm (even if you don’t want to) just so you can get a higher-paying job. Three, you, yourself, are starting a new family and you want to have a more balanced work-family life so you chose to leave the firm and get another job that is not too demanding and does not make you work until 2 in the morning (on a Sunday at that!). Fourth, your aunt, uncle, father or mother runs a small town accounting firm and he or she wants you to take over him or her. And you, being the dutiful son / daughter / nephew / niece, resign from the firm to jump to a smaller one.
So those are the reasons I compiled over the years. What about me? What was my reason for leaving the firm? Honestly? Last reason, fourth way. What about you? If you left the Big 4, what was the reason? Or if you’re thinking of leaving one, what do you think you’re reason will be?
It'd be easy to argue that your fourth reason is the same, or at least v. similar, to the first. :)
ReplyDelete(More time with family, support family = more money / less work!)
Your post is good, but inaccurate in the extreme where you posit that lowering turnover is in some way desirable for audit firms. The reason layoffs spiked in the recession was because people got too scared to leave, voluntary turnover fell, so it had to be "forced out." That, and less client business, but the fall in turnover exacerbated the other problem.
In certain ranks (those who just got their professional designation), the expected turnover rate is more than double the rates you've estimated above, FYI.
Actually, by the time I reached my sixth season, I no longer had any busy season. It's busy season all year round! If it's not audit, it's special jobs. Not kidding but not trying to scare either :).
ReplyDeleteI agree on the certain ranks. If I remember correctly, the turnover rate during my first 2 years for my co-juniors was like 33% per year! The above rate is average for all levels and something I saw in one website. I too thought those rates are somewhat below normal but when I look back, if you like even out the average for the 1st year to the 5th year, the average rate would be between those two above rates.
On your second paragraph, agree on the recession (I'll edit the above post to note that the rates may not be applicable during the recession), which I'm planning to write about. But the lowering of the turnover is actually a serious business for auditing firms (we even had brainstorming sessions about it), maybe not during this time, but even before (and after) the recession, firms really want to lower their turnover rates because it costs them a lot to hire and train new people. But hey, wait for my next post. Thanks for giving me the idea :).
Some people leave just because the job just plain sucks.....vouching 200 invoices a day can really make you wonder about your purpose in life.....and they wanna give something else a shot
ReplyDeleteYeah, I can see how all these factors will cause someone to leave this profession. While I am currently still a student, it seems to me that this job is pretty unappreciated and unfulfilling. I see this as the profession closest to a lawyer in the business world. Accountants have to answer hard questions and know regulations and rules that nobody else wants to learn, and solve complex problems that everybody pushes onto the "expert".
ReplyDeleteI guess that's why accountants are supposedly paid so high. During my 3 month stint as an internal audit intern, I realized how much I hated this job, and everything it entails. Which is why I changed my major.
Thanks Anonymous. You guys are giving me some great material for the part II of this blog :).
ReplyDeleteBig Tuna, *sigh* you're telling me. It's like we're know-it-all accounting gurus who are not allowed to make a mistake or to not know something related to the profession.