Four major accounting firms (EY, Deloitte, PwC, and KPMG) issued advisory services last year after overstaffed companies faced high costs due to a sharp decline in annual turnover (the number of people who leave a company). The company announced hundreds of layoffs across its division and consulting division.
However, Czerniawska expects accounting firms will want to avoid further significant layoffs in their deal teams this year. Not only will large-scale layoffs cause reputational damage, but companies will find themselves short-staffed if trading resumes sooner than expected.
“If you think back to the financial crisis and COVID-19, every time there is a recession, the recovery in professional services has been incredibly fast.
“Nobody wants to find out once the market recovers that they don’t have enough staff,” she says.
Instead, Czerniawska argues that professional services firms, in order to save cash, are delaying the start dates of graduates and apprentices, cutting back on work hours, and underperforming students who are not meeting billable hour targets. We hope that temporary measures will be taken, such as keeping staff in the dark.
Advisory firms are likely to consider more tailored and flexible measures, especially as the private equity industry enters 2024 with trillions of pounds of unspent investor funds.
“There is a lot of cautious optimism as private capital continues to accumulate waiting to be unleashed,” said Alex Hamilton-Bailey, partner and head of legal and professional services at headhunting firm Odgers Berndtson. .
“This should definitely lead to an increase in deal flow at some point, which is why advisory firms of all kinds are not doing their best.”
While investors brace for a recovery in private markets, bankers and money managers are weighing down last year’s shake-offs at Goldman Sachs, Citi and BlackRock, which eliminated thousands of jobs from the global financial sector. Still upset.
While investment firms’ asset management and products divisions were more or less exposed to inflationary pressures, equity lending teams were among the divisions hardest hit by job cuts.
“Generally speaking, stock prices have fallen across the board in the last year, which means there’s less money available in the stock market,” said Tom Andrew, senior manager at professional services recruitment firm Robert Walters. .
More junior investment bankers are now more likely to secure a new job than their senior colleagues because of fewer job opportunities and because companies prefer to promote from within.
“People who are early in their careers will probably find it easier to get back into the market than those who have 15 to 20 years of experience,” said Michael Henning, investment director at recruitment firm Mason Blake. “I’m deaf,” he says. .
Scale matters when it comes to cost reduction, and commentators say Floodgate, a mid-sized firm employing nearly 200 people including 93 partners, has the size of larger, full-service competitors that are better able to hedge market risk. It is argued that this means that there is a lack of . A slump.
Christopher Clark, director of legal recruitment agency Definitum Search, said:
“If everyone is over capacity, you can’t shorten the work week. If everyone is over capacity, you’ll be hiring.”
Some law firms have introduced part-time working hours in response to the business downturn, while others have shortened their working hours as a way to retain staff.
Slaughter & May, one of the city’s most conservative law firms, also announced last month that it would permanently allow its employees to work reduced hours at lower wages. Employees at this blue-coloured organization, where wearing brown shoes was once frowned upon, can reduce their total working hours by up to 20%.
These lawyers will continue to work five days a week as usual, but will have non-working days in addition to their pre-agreed entitlement to up to two blocks of holiday per year.
The prestigious firm began piloting a so-called “switch on/off” system in 2021, but other programs such as job sharing for associates and unpaid leave for project-based lawyers were also not introduced. Ta.
The pilot comes amid concerns about increased burnout among young remote-working lawyers who are struggling to cope with a surge in workload due to the post-pandemic M&A boom.
Slaughter and May’s time-saving scheme is not intended to cut costs, and although M&A professionals are likely to be hurt by the ongoing global deal drought, it is a short-term It is understood that the move was not launched in response to market conditions.