In Pursuit of Profit
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For the last few years, it seems like every accounting article has mentioned the shortage of accountants in one way or another. Business leaders, recruiters, and accountants themselves are bemoaning the ongoing accountant shortage. In a time when people have a hard time agreeing about anything, the consensus these days among everyone talking is unanimous – the scarcity of accountants has become a serious problem. And yet, the proposed solutions continue to fall short of addressing the problem in a meaningful way because they fail to take into account why accountants are actually leaving.
Only time will tell if/when a recession will occur. Right now, business owners are collectively holding their breath as they wait to see how the economy will progress over the course of the next year, which begs the question: “What should your business be doing during this waiting period?”
Knowing what you will do during an economic downturn is an important part of any risk management strategy, especially when economists are warning that the nation may be headed for a recession in the near future.
Gig work can trace its origins to before the creation of the internet. However, over the last decade companies like Uber and Lyft have steadily led the push in the mass acceptance of the gig economy. In 2020 as lockdowns swept the nation, hundreds of thousands of new gig jobs became available virtually overnight thanks to Amazon, DoorDash, Grubhub, Instacart, and Shipt. The pandemic accelerated a shift that was already well on its way to becoming the next big trend in work.
But the quickly burgeoning gig economy was not isolated to takeout and grocery delivery. Professional gig work also grew exponentially as workers were laid off and left their traditional office jobs to manage personal responsibilities. According to a Harvard Business Review article on Thriving in the Gig Economy,
Approximately 150 million workers in North America and Western Europe have left the relatively stable confines of organizational life — sometimes by choice, sometimes not — to work as independent contractors. Some of this growth reflects the emergence of ride-hailing and task-oriented service platforms, but a recent report by McKinsey found that knowledge-intensive industries and creative occupations are the largest and fastest-growing segments of the freelance economy.
When looking to hire management-level financial roles, it is crucial to understand the current recruiting trends that will affect your ability to hire the right candidates. So, what are we seeing so far this year?
Today’s employment market is like nothing we have seen before. Accounting and finance professionals continue to be in high demand despite unemployment figures being up in other professions, but recruiting has changed significantly over the last year. Effective recruiting right now hinges on utilizing digital tools, reimagining job requirements, prioritizing career growth, providing the right employment incentives, fostering a positive workplace culture, and utilizing a professional recruiting firm
2020 changed what employers are asking of their employees, which is why it is no surprise that employees have changed what they are looking for in their current and future employers as well. Understanding what applicants want is crucial because great hiring reduces turnover. Additionally, being in tune with what job seekers want gives your company an advantage in recruiting and hiring top talent.
With unemployment numbers continuing to fall, job seekers are back in the power seat as their needs in an employer continue to evolve in response to the pandemic-related work landscape. So, what do job seekers want these days?
July numbers reported an increase in small business loan approval rates at big banks (i.e. banks holding more than $10B in assets). Approval rates of 13.5% in June rose to 13.8% in July, marking the first increase since January of 2020 when big bank loan approval rates soared at 28.3%.
This increase was mirrored in loan approval rates at small banks as well, which rose from 18.4% in June to 18.6% in July. This was a continued bump from 16.9% in May, but still remains well below the 50.3% mark that small business loan approval rates at small banks hit back in February of this year.
It is important to note that these loans were separate from the widely distributed government PPP loans that many businesses successfully applied for and received earlier in the year.
The widespread increase in bank loan approvals throughout July was accompanied by a continued decrease in the unemployment rate, bringing it to 10.2%. Unemployment had peaked in April at 14.7% and has continued to fall month-over-month since. July alone added 1.8 million nonfarm jobs as economic activity that had been restricted due to COVID resumed, especially in the areas of leisure, hospitality, retail, professional services, and health care.
These indicators may be a sign of an economic rebound on the horizon.
Are consultants simply someone who “borrows your watch to tell you the time?”
“Veteran journalist Duff McDonald makes a point in his book “The Firm” that McKinsey might be the single greatest legitimizer of mass layoffs in history —although that would be pretty much impossible to measure. Companies do need to lay off workers in tough times, that’s a simple fact. But the whole idea of corporate powerhouses laying off thousands of people during good times simply to juice profits—and, naturally, executive compensation—is something that McKinsey has definitely had a hand in as well. ...That sounds like a vote for evil, to me.”
Source – Time.com