Average annual remuneration packages in accounting stands at $817,000.
The big four accounting firms continued to dominate the field with their sheer size, with the top four spots remaining unchanged. PricewaterhouseCoopers (PwC) retained the crown followed by Ernst & Young (EY), Deloitte Touche Tohmatsu HK (Deloitte) and KPMG.
From 2017 until the end of Q1 2019, headcount at PwC rose 15% to 4,600 from around 4,000 in 2017; EY staff numbers climbed 10% to 3,300 people from 3,000; and total staff from Deloitte and KPMG edged up 8% to 2,700 from 2,500 and 4.5% to 2,300 from 2,200, respectively. BDO rounded out the top five with a steady headcount of 1,100 staff members.
Overall, the 24 accounting firms that make up the rankings have about 17,794 employees, up 8% from 16,470 employees in 2017. Clement Chan, managing director of assurance at BDO, remarked that the larger firms would likely be open to integrate other non-accounting practices to enhance their advisory competencies due to market needs.
“Local firms can find their market edge if they can find a less crowded area to specialise such as tax dispute advisory, expertise in some specific countries or region, transaction advisory,” Chan added.
Hong Kong is home to 5,769 establishments involved in accounting, tax consultancy, bookkeeping and auditing services with around 31,507 employees as of end-2018, data from the Hong Kong Trade Development Council show.
According to Poh Weng Wong, chairman at RSM Hong Kong, in-demand job functions include those in audit and assurance amidst heightened IPO activities; PRC tax, as clients are becoming more exposed to business and operations in Mainland China; risk advisory services, thanks to the rising demand of internal audit function and corporate governance practices requested by listed companies and sizeable NGOs; technology and management consulting, because of tech adoption; and forensic accounting & litigation support.
“The demand for accounting professionals is increasing; thus, outlook for the sector in the next 4-5 years is positive,” Wong said. The need for more professionals in this space will also be driven by the substantial increase in IPO projects. A PwC study says 2019 will see 200 IPOs, including 170 listings on the HKEX’s mainboard, for a total haul of up to $300b.
“There are more than 80 companies listed in Hong Kong in the first half of 2019 and the trend is visibly upward sloping from the data of Hong Kong Stock Exchange. The demand for accounting professionals for the position of CFO, INED, accounting staff and internal auditors will definitely increase,” Wong said.
In a survey by the Hong Kong Institute of Certified Public Accountants (HKICPA) conducted in 2018, 83% of its senior and middle-management member respondents from the Big Four accounting firms cited that they are finding it difficult to recruit staff and about 96% admitted that they are struggling to retain staff. Spokespersons from BDO, RSM, ShineWing and Mazars all echoed the sentiment as a survey from Robert Half notes fierce competition to recruit and retain top talent, given the growing mobility of employees seeking to move from one firm to another.
Apart from the challenge of recruiting experienced auditors, Chan laments that certified public accounting (CPA) firms are gradually losing their appeal to young graduates as much of what is associated with the industry leaves much to be desired, including long work hours, lack of work-life balance, extensive travelling and limited growth prospects.
Wong commented that long working hours are unavoidable during the peak season in the first quarter every year but work hours are expected to return to normal in the second half of the year. Stephen Weatherseed, managing director at Mazars, added that the audit profession could be seen as a “dangerous” job because of being involved with regulatory investigations and sanctions against individuals. However, managing partner of ShineWing Hong Kong Roy Lo argued that this is not the case. “Each set of financial figures can tell a different story. If people can draw an overall picture based on accounting figures, they will start analysing the situations that can be something interesting,” Lo said.
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In response to the talent crunch, firms have enhanced salary packages to attract top talent as big firms restructure their respective finance teams to handle increasingly complex commercial and industrial (C&I) functions, according to Hays’ 2019 Asia Salary Guide. Jobs that have seen pay hike in maximum permanent salary per annum are junior business analysts, from $300,000 in 2018 to $312,000 in 2019; management accountants, from $420,000 to $450,000 in the same period; and account clerks, from $180,000 to $204,000, a report from Robert Walters noted.
Furthermore, a HKICPA survey also stated that the sector continues to be one of the highest-paying professions in Hong Kong, revealing average annual remuneration of $817,000, whilst CPA students receive an average annual remuneration of up to $283,000.
About 87% of its respondents have also experienced a rise in pay. Lo and Chan shared that both firms enacted policies for their employees’ career growth and work-life balance. Chan added that they are looking for further improvements to compensation packages, working environment, and training schemes
Meanwhile, PwC Asia Pacific and Greater China chairman Raymund Chao added that their firm has introduced its WeFlex programme designed to give employees more flexibility. “We have designed an upskilling programme to meet this need by helping our people unlock their digital potential. This will help us to be more confident and credible in providing a digitally enhanced experience for our clients, and also, ourselves,” he said.
In RSM, Wong shared that they put emphasis on their staff’s work-life balance by having a social committee that holds recreational/ social activities for their family members to join. Events can come in the form of local tours and even two-day overseas trips.
On her part, EY’s managing partner for Hong Kong & Macau Agnes Chan believes that the accouting profession continues to hold appeal for jobseekers, noting that around 400 graduates have recently joined their team. “We are a very diversified profession nowadays. People can join us in the taxation field, people can join us in the mergers and acquisitions department, and people can also join us in the advisory department, which provides support in the areas of cyber security, in the areas of artificial intelligence,” she said.
In addition to challenges related to talent, the digital transformation wave that has swept across most industries has not exempted the accounting industry. “We have a significant uptick in enquiries with cloud-based accounting and ERP/ CRM systems. The awareness and comfort level with cloud-based technologies have significantly improved,” Wong observed.
RSM adopted cloud-based business applications, including office 365, help desk ticket management and content management systems as well as intranet and cloud customer relationship management. The firm also has plans to apply cloud-based professional services automation system and foresees the adoption of robotic process automation (RPA) as the next big trend.
Despite fears surrounding the growing automation of manual tasks, EY’s Chan believes that robots will not render humans redundant. “We also thought ‘okay, it’s going to replace all the secretaries, we don’t need secretaries to type all of our reports because we all type on computers ourselves’. With computers, they actually improved the efficiency of our work, and at the same time we have asked EY people to do other even higher value work. So I do not believe it,” she said, citing cites how auditors used to check every invoice for verification but have since adopted its EY Helix platform to sort out invoices for them, leaving their employees to pursue higher-value tasks. “This is how you can appreciate it. Even technology is just moving people to do other types of work.”
“The issue would be whether the technology talents in Hong Kong would be able to catch up with the demand and market expectations,” Wong concluded.
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