[thekoreanaccountant]

I was laid off this morning from a CPA firm with < 50 staff. The boss diplomatically said I did not have the return on investment the partners wanted after 2 tax seasons, especially since when I was hired, I already passed the exam and had 5 years experience in private industry (at the same employer). My CPA license application is currently being reviewed with NY, and the boss already sent in the supervisory form. I’ve also been told by direct supervisors multiple times that the quality of my work work was great. The one criticism I received a few times was regarding my speed, i.e. the always present BILLEABLE HOURS.

My take on this is that they wanted to cut costs, as I was more expensive than my cubicle mates who were much younger than me. Any thoughts?

AUD 2/2011 76 (lost credit), 2/2013 71, 7/2013 78
REG 2/2012 82
BEC 2/2013 75
FAR 4/2013 75

5 years in private accounting, < 1 year in public accounting. Runner, mommy, dog and cat lover. SO glad I took the exam before I went to public accounting.

[Anonymous]

When jobs end, it's always for a reason, and 99.9 times out of 100, it's for the best. They might have said that you were costing them too much money, but in reality, it could have been something else that they did not tell you about and won't ever. It was probably time for you to move on anyway. Some years ago I was in a rotten job. The pay was good, but everything else about it sucked. I sat around waiting to be fired – I only had enough work to fill 1-2 hours out of 8 hours per day, and ditto for my coworkers. Because I was the last hired, I was the first to be canned. I was glad to be let go. Onward and upward and best of wishes for your next step!!

[Anonymous]

The best accountants get laid off because they are too efficient.

If your work is completed too quickly, your utilization rate will be well below budget meaning you are unassigned or unbillable too often. If you aren't billable, then the firm isn't making any money off of you.

It's usually okay to be quicker/more efficient at larger firms because they usually have enough work to go around to keep you busy. At smaller firms, they won't have enough work to go around to keep the better/higher paid accountants busy so they usually end up keeping the average/lower salary employees or the employees who know to complete their tasks around 80-90% utilization.

Does this sound about right for your experience at the firm?

[thekoreanaccountant]

Thank you for your inputs. I was constantly thinking I'm too slow, and my first (and only) annual review in February confirmed it. While I was a good employee and well liked, my “realization rate” was on the low end (65%, whereas 80% was the benchmark). I nicely asked if there was anything specific I could work on for the future, and he said not really, because it was a business expense decision. I was paid a higher entry salary because I had more experience than the other staff accountants and already passed the exam.

My guess is I didn't bring in enough money for my experience level. Summer season is also about to start, which means there's less work to go around. I was about to finish the work I currently had this morning, and was prepared to ask around for more work that afternoon. How convenient.

AUD 2/2011 76 (lost credit), 2/2013 71, 7/2013 78
REG 2/2012 82
BEC 2/2013 75
FAR 4/2013 75

5 years in private accounting, < 1 year in public accounting. Runner, mommy, dog and cat lover. SO glad I took the exam before I went to public accounting.

[Anonymous]

Many smaller firms are notorious for hiring people and letting them go just before the summer (larger firms too). But smaller firms are snakes when it comes to this. Often times they don't even give you a budget or schedule to plan your work. They just throw a bunch of random things at you and expect you to “work your magic” without providing much training, then they use all your mistakes against you as a reason to let you go.

It's bs really. That's the nature of the accounting industry.

[shawn in VA]

Brickell points are on…

I can speak from personal experience. I was hired by a CPA firm (about 45 people) in mid-January. I was paid a massive premium b/c they were desperate and needed someone badly because busy season was literally a few days away. I had 5 years under my belt prior to this job and was hired a senior assoc. I received nothing but stellar reviews at my prior CPA firm. At the end of april/early May the boss put me on some progress improvement plan where I had 90 days to improve or be let go. I was in SHOCK. I received good feedback from my co-workers and nothing negative came up. Anyways, I knew it was b/c they can find someone cheaper and can take there time finding someone since tax season was over. I resigned a few days later and got something waaaaay better.

My point is the firm will use performance as a way to let you go b/c it is safe. They do not want to get sued.

[Wanna_B_TXCPA2014]

Thank them for the opportunity and move on. I would look for a position that appreciated your attention to detail vs churn and burn. Im kind of the same as you in that it takes me more time to finish things than others, but I sacrifice speed for quality. Knowing that about myself I look for opportunities that fit my work style rather than check chasing. Good luck with your search.

[red_rose]

It's standard behavior for firms to fire employees after busy season. This happened to me last month & I was the only person that actively pursued a CPA in the dept. So yes, it's possibly because you will cost more & they can hire someone cheaper. I worked at a top 10 CPA firm & I ran into a ex co-worker a few weeks ago. He was a CPA, had been with the firm 2 years, he was fired. Never had any write-ups or complaints, same as me. I was told i was going to be on a PIP immediately after busy season ended. I worked 70 hours a week & management kept telling me how well I was doing. It was because everyone quit & they couldn't afford for me to quit (3 ppl left in 6 weeks, staff total is normally 6). As soon as the work died down, my performance was suddenly bad? My mgr signed off on my CPA work experience hours? If i didn't adequately perform, my mgr would not have signed off my hours, there's no legal requirement for him to sign. Now I have a new job paying me 20K more per year.

So take it as a blessing in disguise. You will find something better. Don't let this mess with your confidence. A better job will come your way 🙂

BEC -77
FAR – 75
AUD – 86
REG – 75
Ethics Exam – Passed today!!! (I'm almost there! Just need the official paper!!!!)

[hasy]

Speaking from personal experience as well, I was hired by a firm (<100), they kept that number specifically in order to do little for their ERISA filings. They hired 5 new audit associates and I was one of 3 that let go, SLOWLY but surely. It's not you, it's the bottom line. Don't dwell on it. I'm sure your valuable tax skills can be utilized elsewhere.

That move made me rethink the idea of public accounting, honestly. So we'll see what I can leverage with my CPA license.

Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved - Helen Keller

-

BEC 80 (10/23/15)
FAR 72 (4/2/15); 83 (7/11/16)
REG 52 (4/28/15)
AUD (9/9/16)

Roger + NINJA MCQ + WTB

[krstnam]

Happened to me early on in my career. I was the most billable, they even commented on what a great employee I was then I got back from vacation and was let go, they said I was inefficient and had too many errors. To which I said, “if I was doing something wrong, it would have been helpful to have that information before right now.” He said “dually noted” LMAO. Even stranger – he gave one recommendation letter to a prospective employer (I didn't ask for it either) and the job that I ended up taking next he told them what a great employee I was.

That firm has since been bought out by another company. They no longer have any CPAs there – they all left. So, IMHO, bullet dodged. I was also able to get another tax job that paid more than double within two months so basically, I had a free summer and it was awesome 🙂

[thekoreanaccountant]

Thank you for all the responses. Now that I'm passed the raw emotions, I have realized that I agree with everyones thoughts. I'm also grateful that I did the time in public accounting, because it taught me I prefer private industry, and gave me the experience I needed to get the CPA license. If New York state could just finish reviewing my application. Grr.

AUD 2/2011 76 (lost credit), 2/2013 71, 7/2013 78
REG 2/2012 82
BEC 2/2013 75
FAR 4/2013 75

5 years in private accounting, < 1 year in public accounting. Runner, mommy, dog and cat lover. SO glad I took the exam before I went to public accounting.

[SeattleCPA]

Bricknell said this: “The best accountants get laid off because they are too efficient…”

This is dangerously inaccurate. You don't get laid off if you're efficient. You make the firm tons of money.

What maybe some of you don't understand… Firms don't bill by the hour. They value bill. So if one CPA does $2000 of work in 4 hours and one CPA does the work in 40 hours, well, you can do the math. The super-efficient CPA gets a nice raise… and then the firm needs to figure out what to do about the 40 hour person.

BTW if you're new in a firm, you don't worry about your speed. Worry about building your skills. Focus on quality. You'll get fast once you move up the learning.

[Anonymous]

@Seattle

I have a very different perspective about utilization rates and what firms value in an employee. From what I can tell (a perspective that many accountants share) is that if you complete your work very efficiently and well below budget, then your utilization rate and performance review will be negatively effected.

If you work a 40 hour work week, but are only billable for 30, then you have a 75% utilization rate and the firm eats the other 25% in which you are unbillable.

On the other hand, if you work a 40 hour work week and are billable all 40 hours of the week, then you have a 100% utilization rate (most firms like their employees to average around 85%). As long as the employee isn't spending excessive amounts of time blowing the budget (reaching utilization rates of over 100%), this is generally preferred. In other words, firms are able to write-off an employees excess time spent on an engagement, but they are not able to falsely mark it up. And most firm billing is done by using the billable hour which is why many employees are often required to keep track of their time down to the minute.

The dilemma here, most particularly at smaller firms where there might not be enough work to go around, is that if you complete your work too quickly, then you will run out of billable work to keep you busy while other less efficient employees (or employees who know how to work the budget/utilization rate) remain billable.

This is why the brightest and most efficient accountants get stuck with “doing all the work” while the others may be spending more time with client-facing roles in which they can easily obtain their utilization goals.

At larger firms, there tends to be more billable work available and a larger budget for employees to keep busy. Smaller firms generally have smaller budgets and fees, which again, leads to the brightest and most efficient accountants getting used up and thrown out after the busy season when the majority of the firm's billable work is completed.

The employees who are able to complete their work more quickly and efficiently than others are most suitable for a career in private accounting where they focus on generating internal value rather than focus on how much they can bill to a client.

[Author]

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