Ernst & Young: Israel's Largest Accounting Firm

Ernst & Young (EY) is one of the world's top accounting firms – the Big Four. The Israeli branch, Kost, Forer, Gabbay, Cassirer, is the largest in the country and a giant by local standards. The firm currently has 1,600 employees – 200 administrative workers and the rest professionals, mostly accountants, but economists, layers and tax experts as well.
We spoke with Galia Aloni, Deputy Director of Human Relations of the Israeli firm, on its activity and approach to employee management.


What's the significance of being represented by an international firm?

Besides being part of an enormous information system with advanced working methods, we're also part of an international firm that has a uniform organizational identity and culture (though with local adaptations) based on joint values.
One of the prominent values, for instance, is teamwork. We don't operate as individuals. Here the emphasis is on collective efforts.

Can the job be done in a professional manner without a staff?
Certainly. Teamwork is not self-understood. Not even at all of the Big Four, either. For instance, one of the large firms works according to the "pull" method, meaning employees do not belong to a fixed staff, but are assigned to a different task each time based on need. The disadvantage in this is that the individual does not see the whole picture and does not accompany the process from beginning to end.

At another large firm that operates in a manner similar to yours, I was told they employ the "pull" method in the US, but in Israel it's considered unsuitable.
But the firm I mentioned does work that way. Apparently it works and it is a possibility. They've been operating in Israel for quite a while.
For our organizational culture this work pattern is unsuitable. According to our view a worker that enters a large system like ours could turn into a little cog that vanishes in the machine. On the other hand, the moment he is integrated into a team, he has someone to turn to. He belongs to something bigger that has an identity. Within the team he grows and develops.

When was the local firm linked with Ernst & Young Global?
In 1996. Until then the local office was not very big. It ranked eight or ninth on the list of offices operating in Israel back then. The significant growth occurred after the fusion with the international firm. Employees were exposed to advanced working methodologies and extensive professional knowledge.
It's also important to note that the accounting profession has changed significantly in the past ten years.

What characterized the profession until the middle of the 1990s and what characterizes is now?
In the past the emphasis in accounting work was on submitting balance sheets and profit/loss reports. Today customers expect their accountant to be a business consultant as well.

Were the universities that train accountants prepared for that?
Definitely. The curriculum used to be only in the accounting department. That's changed. Today everybody's learning a two-track program, generally accounting and economics. Some institutions have also developed unique tracks. For instance, four or five years ago the University of Tel Aviv opened a track that combines accounting, management and economics. At the College for Management, accounting studies are combined with business administration.

Would you prefer to recruit an employee who has gone through this combined training?
Not necessarily, because in any case there are knowledge gaps. Even those who studied in these combined programs are still not qualified for day-to-day tasks. They receive intensive training provided by the firm. Academic studies are not a substitute for practical learning. There's a lack of know-how on the practical level. There's a gap between the academic material studied and work out in the field.

Are recruitment considerations affected by the institution the candidate attended?
Yes. There are about ten academic institutions that teach accounting. We tend to recruit from those who studied at the five universities, the College of Management and the Interdisciplinary Center in Herzliya.

What's the situation in the job market for accountants? Is it an employers' market or an employees' market?
An employees' market. There's increasing demand for accountants. Every year we recruit more and more workers. The profession is constantly developing. Clients now demand accountants provide a broader range of services. The profession is becoming more complex, therefore we need more accountants. 

Are you recruiting experienced accountants?
Most of our recruitment is aimed at recent graduates. They're also recruited at set times under our focused recruitment drives. But sometimes a need arises for a specific accountant or a professional with a related background [e.g. a tax expert or lawyer], and we can't afford to recruit someone without experience and train him. In such cases we recruit experienced workers.
This is particularly prominent in the consulting departments because the consultant has to be experienced.
For instance, in the Tax Department you'll find workers previously employed by the tax authorities.

What are the main tools for recruiting junior accountants?
Naturally the main recruitment tool is our ties with the universities through various means, such as spotlight days, job fairs and ties with university placement units. We take in students as early as the end of their junior year. Their senior year is essentially to complete their studies and prepare for the Israeli Accounting Board exam. During this year they also work here. That way they already complete one of the two apprenticeship years required to receive an accountant's license.

How many employees do you hire every year and how many stay at the firm?
Last year we hired 430 employees, most of them junior accountants. Naturally a considerable portion will not remain at the firm for long. Many of them enter the free market jobs as accountants at companies, as finance directors, etc.
For our part, we make efforts to keep workers from leaving at the end of their apprenticeship, encouraging them to stay with us for another two or three years. It's worthwhile from their standpoint. Today's apprenticeship period is not enough to become familiar with the profession. Another two or three years of accumulating experience at a company like ours helps them a lot. Even if they plan to develop a career outside the framework of an accounting firm.
Those who decide to remain with us advance at the firm, and because it's constantly growing there is a significant promotion horizon for a substantial number of employees.

How is the staff's management hierarchy built?
At the head of every team is a partner [EY has over 80 partners], and below him is a senior manager [EY has over 250 senior managers and managers]. The manager is the one who actually directs the junior and senior accountants.
The senior accountants [the firm has over 350] have a higher professional status than the juniors, but senior accountant is not a managerial post. Besides their professional work the senior accountants are involved in training, mentoring and guiding junior accountants.
Employees can become managers within four years of starting to work.

Is the lower status of junior accountants comparable to that of many junior attorneys?
Not at all. He's considered an apprentice only from a professional and formal perspective because he's not yet an accountant. In terms of daily tasks there's no distinction between one worker and the next. The junior is an employee in every respect. He doesn't run errands and doesn't make photocopies for another professional employee. That's what administrative support systems are for.
Obviously an apprentice won't have the authority to authorize issuing a financial report because he doesn't have the knowledge and the authorization, but he executes the professional work according to his pace of learning and development. It's not that all of a sudden he receives an accounting certificate and then his standing on the staff changes. He merely becomes authorized to execute additional tasks.

Do job candidates negotiate their salary?
Very rarely. In the case of an inexperienced apprentice just starting out professionally, junior accountants mostly want to gain experience at a worthwhile firm. The question of money is less critical to them. Besides, they have nothing to negotiate with since they don't have knowledge or experience. All of them arrive from the academic institution with the same amount of knowledge, more or less.

How is the salary level at the firm determined?
We're the largest office on the market and also the best-paying office on the market. Our ambition is to lead the market in all aspects, as we have until now.

What's the rationale? If a firm like yours is considered a desirable place to work, presumably employees would be willing to work for less pay as well. Why toss out good money for no reason?
We're not successful merely by chance. We know and respect our workers and therefore we pay them what they deserve. Even if EY Israel is a sought out place to work, and perhaps therefore we could pay less, we don't take advantage of this fact.
That attitude may be common among employers, but not here. Our approach is to offer the employee a home that provides the best professional framework and the best compensation. Of course this raises the chances of good candidates seeking to work for us.

What's included in the training the firm provides?
Training includes three levels of learning.

The first level is on-the-job training. Every new worker is paired with a mentor from day one. The mentor guides him during his first three months of work. As he continues working on the staff there's always someone to help him and guide him as needed.

The second level is a study program suited to meet the needs of every worker at the firm. It's about 120 hours a year. The study program is carried out in classrooms and includes requirements set by the international firm in accordance with local needs. Every professional level the employee reaches has a study program of its own. The program includes studies in various areas: taxes, accounting, English and management.

The third level is remote learning. Individual study through courses at the computer.

Is the candidate's suitability evaluated along with an assessment of his suitability for the staff he would be assigned to?
No. In the initial phase only his suitability for the firm is evaluated. Only in the next phase is his suitability for the staff evaluated. So if in some cases it's found he's not suited for one staff, we won't overlook him but rather he is assigned to another staff.

How do you evaluate his suitability for the firm?
By assessing the presence of parameters that point to an ability to fit in with the organizational culture. For instance, the ability to work as part of a team, as we discussed previously. The presence of values like mutual respect, dependability and confidence in others. Recruitment tools that are used include assessment centers, personal interviews and professional interviews.

After a candidate is found to be suitable for the firm, how do you evaluate the new employee's suitability for the staff?
After his abilities have been assessed we send his resume to the partner who manages the staff. The partner calls him in for an interview and evaluates his suitability. Sometimes the partner makes use of a Human Resources worker.

Presumably belonging to an international firm makes it possible to transfer employees to different branches around the world.
Certainly. The employees' mobility is a central component of the organizational strategy. This type of mobility process generally begins when the employee becomes a manager. Mobility enriches both the firm and the employee. The firm in general benefits when knowledge accumulated in one place flows to branches in other parts of the world. The employee benefits from the opportunity to gain international knowledge and experience. The local firm benefits from the fact the employee returns with knowledge and passes it on to the people here. Mobility is good for everyone.

 

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