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)