Hong Kong’s accountancy firms plan to hire more people this year, despite the economic slowdown, amid increased demand for consultancy services and a rise in IPOs which require auditing, according to industry experts.
The Hong Kong Institute of Certified Public Accountants (HKICPA), the industry body for the 43,000 accountants in the city, said about 1,300 candidates had enrolled for its training programme in the past five years, with the number growing between 3 and 4 per cent each year.
“This year is likely to be a year of expansion for recruitment of accountants. Many accounting firms have a shortage of staff and there is no sign of a slowdown in hiring of both fresh graduates and experienced accountants this year despite the market volatilities,” said HKICPA’s newly elected president Patrick Law Fu-yeun in an interview.
Hong Kong and China recently reported their slowest economic growth in many years, largely a result of the trade war. The Hang Seng Index fell 14 per cent while the Shanghai Composite Index shed a quarter of its value last year.
For Hong Kong’s accountants, the slump in markets and economic growth has been more than offset by other factors; accounting giants EY, PwC, Deloitte and BDO all said they either planned to increase their hiring targets this year or took on more staff last year.
Law said the surge in initial public offerings in Hong Kong last year had boosted the need for experts to carry out traditional audits. A major overhaul of stock exchange regulations in April allowed pre-revenue biotechnology firms and companies with a dual-class shares structure to list for the first time.
The reforms successfully attracted blockbuster IPOs including the world’s fourth largest smartphone maker, Xiaomi, which raised US$5.4 billion in its July listing, and food delivery firm Meituan Dianping with a US$4.9 billion IPO in September.
These and other new listings helped Hong Kong to reclaim its crown as the top IPO market worldwide in 2018 in terms of funds raised.
Law said the current trend among accounting firms to diversify their business from traditional auditing services to consultancy services was also boosting hiring. Among the so-called Big Four, Deloitte and KPMG this year both launched legal services for the first time, following their rivals EY and PwC which did so some years earlier.
“There are also many customers who want the accounting firms to help improve their technology and development of fintech. This has led to more hiring,” Law said.
EY plans to recruit 500 fresh graduates to its Hong Kong and Macau offices this year, up 20 per cent from 2018, according to Agnes Chan Sui-kuen, a managing partner at the firm.
“We are cautiously optimistic about the market outlook in Hong Kong. As the Greater Bay Area development plan progresses, it will be a driving force of Hong Kong’s economic growth. Professional services, in particular advisory services, will continue to be in high demand,” she said.
The “Greater Bay Area” refers to Beijing’s scheme to link Hong Kong and Macau with nine mainland Chinese cities into an integrated economic and business hub.
BDO, the fifth largest accounting firm in Hong Kong, has hired about 250 staff in 2018 – 140 fresh graduates and 110 experienced accountants – up 15 per cent from the previous year, according to managing director Clement Chan Kam-wing.
“The increase in auditors at BDO will exceed 11 per cent this year. The growth in our headcount mainly stems from our growth both in number and size of our audit clients, including many listed companies,” said Chan.
“We’ve been seeing this trend for the last three years already.”
PwC this year plans to hire 2,800 graduates and 1,600 experienced accountants in mainland China and Hong Kong. Last year it hired the same number of graduates but 600 more experienced staff, according to Ewan Clarkson, human capital partner of PwC Hong Kong.
“Our 2018 hiring numbers were higher than 2017. We have an ambitious strategy around upskilling our people and digitalising our business,” Clarkson said.
“It is therefore important we do not just look at the comparison of the volume of people we are hiring but also focus on the nature of their skills and capabilities.”
As clients demand it, he said, PwC has focused more on recruiting people with technology skills. That marks a shift from the past, when accountants were mainly require to perform auditing.
Deloitte raised its headcount in Hong Kong and China by 10 per cent in 2018 and expects to increase its summer graduate intake this year, according to Deloitte China chairman Philip Tsai Wing-chung.
“The main reason for the growth is the hiring for our advisory business, and mergers and acquisitions,” Tsai said.
The financial incentives for professional accountants are strong.
The average annual pay of accountants in Hong Kong stood at HK$817,000 (US$104,127), or HK$68,083 per month, according to a HKICPA membership survey last year.
Even among younger accountants who joined the industry within the last three years, the average annual pay was HK$283,000, or HK$23,583 per month. That is much higher than Hong Kong’s median income of about HK$16,800 a month.