Today there are four major accounting firms (known as the "Big Four") operating in the world, located in various countries and providing special added value for their global clients thanks to their extensive arrays.
One of these four, Deloitte, has 135,000 employees in 700 offices located in 150 different countries. The primary services the firm provides its customers are accounting, tax consulting, business consulting, economic consulting and risk management.
In Israel, Deloitte has 750 employees. (The full name of the Israeli company is Deloitte Brightman Almagor. Brightman Almagor was the local office that merged with the international firm and founded the local firm with it.)
The main office is located at Azrieli Towers in Tel Aviv. Another three branches with 100 employees can be found in Haifa, Jerusalem and Eilat.
We spoke with Yiftach Yafeh, vice president of resources at the firm, about the job market and about human resources management at the firm.
There's a tendency to present the firm not just as an accounting services provider, but also as a business consulting services provider.
Yiftach Yafeh: Definitely. This means we provide not just traditional accounting services or services close to them, like those provided through the taxation department, but also consulting services in broader fields, such as customer relations and marketing, IT or human resources. Deloitte Worldwide is positions as the number-one business consulting company in the US and number two in the world. Its competitors in this area are not the three leading accounting firms, but consulting companies like Mackenzie or Accenture. Although the firm's consulting services are developing, in Israel the largest group of workers at the firm are involved in auditing, and in any case most of the employees studied accounting.
The lion's share of new employees is typically accounting students who finished their studies and are doing an internship at the firm. How attractive is it considered to work for the Big Four?
Most accounting students want to reach the Big Four. The large firms provide very broad horizons in terms of development and opportunities. This allows them to recruit outstanding students and make available to them a range of possibilities for promotion and development.
For instance there are cases, which are becoming more and more common, in which comprehensive services are given to an international company and to carry it out employees from Deloitte offices in other parts of the world join the staff. The exposure to this kind of activity, which includes training in methodologies developed abroad, provides our workers excellent on-the-job training. At Deloitte this is particularly prominent due to the fact the other big accounting firms sold their consulting department, therefore the consulting services they provide are based primarily on local platforms without assistance from the worldwide parent company.
I assume this is one of the central considerations for a student trying to get hired at a firm – acquiring knowledge to raise his worth in the job market.
That's right. The matter of training and professional development is heavily weighted. After all that's the main product of an accounting and consulting firm. Deloitte invests extensive resources into constant training for its employees, who must always be at the forefront of professional know-how. The decision is not in the hands of the local firm at all, but is based on explicit directives from the management of the worldwide firm. During the course of the year every employee has to fulfill the minimum number of study hours set for him. At the employee's disposal is a sophisticated learning system with a range of options: classroom instruction at the company offices, training programs abroad or remote learning through the company's sophisticated Internet site.
This is an example of the fair balance between the employee's needs and the firm's needs. The employee not only gains extensive professional knowledge, but also enjoys higher positioning in the job market.
Sometimes small firms seek consulting services from us in a certain area, e.g. international accounting standardization, and then suddenly there's a situation in which the person who comes to train them is one of our accountants who studied in the same class as the person receiving the training. They studied at the same time, but now our man is the trainer and his friend is sitting on the pupils' bench receiving the training. This is another way in which the employee's share value in the job market is constantly on the rise just by being in the firm's employ.
In addition to the enormous pools of information at his disposal around the world from the employees' perspective are there other advantages stemming from the fact he is part of a global firm?
Definitely. He has opportunities to take part in the firm's global achievement. Here's a recent example: One of our employees moved to London as part of his career planning. At the London branch is specific knowledge that we want him to specialize in. The goal is for him to come back here at the end of his specialization training and set up a department in that field.
As a rule we want every manager to have global exposure. There are various types of tasks to be carried out abroad, from joint project execution at our global customers' sites to 2-3 year assignments at branches outside of Israel to execute long-term projects. Our hope is that the majority of new partners at the firm will be people who have gone through this track, so that globalization is in their DNA.
Does an employee at the firm specialize in a single area and delve into it, or is there an opportunity to develop in a number of fields?
Both. The firm's setup allows employees to enrich and vary their professional activity through an employment process called "multitasking," meaning the worker can be employed in two different professional systems – two distinct units under different supervisors.
For instance, an employee in the auditing department can also specialize in the unit specializing in bank audits and the unit that conducts audits of real-estate companies.
Both the worker and the company benefit from this manner of employment. If an employee starts to show signs of burnout this type of framework allows him to learn and rejuvenate. His knowledge grows and he gets to know other systems at the firm, thereby improving his chances of promotion.
It's worthwhile for us, too. We expand the accumulated know-how among our employees, which allows us to move workers from one task to another and from one project to another. This type of employment requires the consent of both parties.
What percentage of the firm's workers are employed this way?
About 30%. You have to take into account that running operations in this way is more complicated and not suited for everyone for a number of reasons:
1. The employee enters a new, unfamiliar field and there is an element of uncertainty.
2. There are certain people who want to gain expertise and develop in a single field.
3. It can create hazy management. It's not always clear who is the "real" direct supervisor and then matters are liable to fall between the cracks.
4. Employees see their development at the firm only as a springboard for a position at a commercial company less in need of this development track, therefore it's best suited for those who want to advance within the firm.
This employment pattern also depends on the organizational culture. At Deloitte USA, for instance, there are no fixed work units similar to ours. They have an employee pool without fixed direct supervisors. The employees are assigned to projects based on need. This allows them to maximize work resources. Here, because of Israeli culture, particularly organizational culture, that type of setup wouldn't work.
Also, presumably not every manager likes having his worker devote energy to tasks under the responsibility of another manager.
Obviously at the operative level the partners (the executive managers) who are in charge of the employees are not always thrilled with multitasking. It's not always convenient for them to share an employee with another partner, especially in cases of heavy workloads in their unit. But on the other hand, in cases where they themselves are in need of a trained worker from another unit they benefit from the advantages of this employment arrangement and understand its importance.
They also understand that it even helps them hold onto workers that have already exhausted their potential for development at their job in the unit since the opportunity to execute tasks outside of the unit as well helps this worker continue and keeps him in the unit and of course at the firm.
What is the advancement track for the accountants at the firm?
In the firm's central enterprise, auditing, the accepted practice is to have four primary levels of hierarchy – junior, senior, manager and partner. Between the various levels are intermediate ranks, but the employee's main milestones are these ranks.
The junior employee is essentially an intern at the firm. This period of work is a good opportunity for the employee to get to know the firm, study its organizational culture and begin to form his own opinion on the most substantial issue in his work life – whether he chooses a career track within the firm or heads out for the job market in search of work in accounting or money management. At the same time the firm assesses its employees during this period in order to better evaluate his suitability to the organization's ingrained character traits. At this stage a great deal can already be learned about the worker and career tracks can be started for the more talented people among them.
After two years, assuming the junior completed his internship and earned a license entitling him to work as an accountant, he is authorized as a junior.
The character of an accounting firm, like that of a law firm, creates a situation in which a portion of the interns leave the firm once the internship comes to an end. How is the decision reached regarding the interns future, whether it lies at the firm or elsewhere?
The end of the internship period, like the completion of the junior term, is a time of internal conflict. We're aware there's no way to continue employing all of the junior employees who complete their internship. There are two primary reasons for this: One, good juniors who were exposed to people outside of Deloitte Brightman Almagor through their work, such as company clients or even other firms, receive job offers that are better suited to their professional development.
For instance a young accountant might decide he longs to be a general accountant at a high-tech company rather than developing within a large accounting firm.
The second reason is the classic organizational reason. The organizational pyramid allows only a limited number of people to receive promotion.
If at the beginning of his career the fresh junior recruit wanted with all his heart to get hired by the firm, now the tables are turned – some of these juniors will decide they'd rather develop outside of Deloitte, which would very much like to keep the good employees from among all those who complete the internship.
That's right, because the market is open before them. Even if during the internship an intern wants to switch to another employer, it could only be at a similar firm since he has to complete his internship. On the other hand, if he completes the internship, since he's acquired knowledge, positioning and recognition he now has the ability to choose his future path – whether through the firm or by accepting one of the other job offers he received.
For its part the firm seeks to hold onto the good employees. A lot was invested in them and now it's time to reap the benefits. But only a portion of the juniors continues to work at the firm. The rest set sail for other destinations.
And in many cases other companies will also offer them a salary Deloitte cannot compete with.
Definitely. A job offer from a commercial corporation can also bring with it a significant rise in salary, even double what he receives at the firm. With us he'll get a raise when he becomes a senior, but not the kind of raise guaranteed him in most of the positions waiting for him elsewhere.
What we can guarantee him if he stays is continuing professional development he is very unlikely to encounter elsewhere. Whether or not he chooses to stay at the firm for an extended period he adds merit points to his resume. At a later point in time, if he chooses to leave the firm he will be able to secure a senior post like vice president of finance at a large company.
Is this a major problem from the firm's perspective?
That's life. At Deloitte Brightman Almagor, like at other accounting firms, we understand these are the rules of the game in the job market and even find it has its advantages. For example, an employee who goes to work at a commercial company can turn the company he joins into one of our customers. He already knows our staff and work patterns, so it can be both very convenient for him and good for us.