By Jason Bramwell
A recent study of lateral hiring trends in the accounting industry by Chicago-based Koltin Consulting Group (KCG)
found that firms are spending money for recruiting "heavyweight" partners away from their competitors as a way of accelerating growth.
"Just a decade ago, the term 'lateral hire' had little meaning to most public accounting and consulting firm leaders," KCG stated in its 2013 Lateral Hiring Study
. "In today's aggressive business climate, attracting lateral partners and emerging leaders from the outside is an appealing strategy for propelling organizations forward."
KCG's Executive Search practice conducted a study of 150 lateral hires made by non-Big Four public accounting and financial consulting firms between January 1 and October 31, 2013.
In terms of lateral hires by level, 74 percent were for partner/partner equivalent, followed by senior manager at 14 percent and director/principal at 12 percent. Tax (44 percent) is the service line with the most lateral hires, followed by audit (28 percent) and advisory/consulting (28 percent).
"Firms can't get enough highly qualified tax talent, a complete role reversal from five years ago when the hiring surge of experienced auditors ignited by Sarbanes-Oxley was still in full effect," the report stated.
The top areas of industry expertise among lateral hires include:
- Real estate
- High-net-worth individuals and family office
- Hedge funds, broker dealers, and private equity
- Technology and media
- Not-for-profit and government
- Retail and consumer products
Firms are also looking at the following technical expertise:
- International tax
- Trusts and estates
- Yellow Book/Circular A-133 audits
- State and local tax
"Gone are the days of the generalist, with the majority of laterals being sought out for their industry and/or subject matter expertise," the report stated.
Lateral hires are the most frequent in the Mid-Atlantic region of the United States (Maryland, New Jersey, New York, and Pennsylvania) at 34 percent; followed by the Southeast (Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia) at 20 percent; and the Midwest (Illinois, Indiana, Michigan, Minnesota, Missouri, Ohio, South Dakota, and Wisconsin) at 17 percent.
The following states had the highest percentage of lateral hires made:
- New York (19 percent)
- California (10 percent)
- Pennsylvania (9 percent)
- Georgia (8 percent)
- Texas (5 percent)
- Virginia (5 percent)
- Illinois (4 percent)