Revolutionaries for Hire.

CPAs Capitalize on Dot-Com Demise

Less than a year ago,

San Francisco's streets south of Market, home to hundreds of dot-coms, were brimming with young, pierced-and-tattooed professionals swaggering to loft work spaces, soy lattes in hand, humming a tune along the lines of Queen's "We Are the Champions." The technology revolution had embraced Gen. X and Y by the tens of thousands and funneled their enthusiasm, entrepreneurial spirits and yes, naivete, into the most potentially gratifying--and riskiest--venture in U.S. business history: the dot-com. All the while, California's CPA recruiters bemoaned the difficult task of recruiting bright, young talent to a profession decidedly famous for NOT allowing you to bring your pet to work.

Oh, how the tables have turned.

Today when you walk through those streets, many of the java stops are gone and "for rent" has replaced "IPO" as the mantra of the day. Even the weekly magazine that chronicled the dramatic highs and lows of the Internet economy, the Industry Standard, closed its doors for good at the end of September. And morbid-sounding Web sites have sprouted up, such as Ghostsites, www.disobey.com/ghostsites, which features the The Museum of E-Failure that details the industry's demise by archiving the home pages of sites that have bit the market dust.

One of the more disturbing aspects of the demise, however, is the huge number of people who suddenly have found themselves out of work. By the beginning of the summer, 64,983 dot-com employees had been laid off in 2001--compared to 3,315 dot-com layoffs from January through May 2000. This is an increase of 58 percent from the 41,214 layoffs in all of last year, according to research reported by the Industry Standard.

CAPITALIZING ON THE DEMISE

Now that so much talent is back in the pool-of-consideration, can CPAs gather some into the fold and solve their hiring woes? Many California CPAs say that while it's still a challenge to find top candidates for senior positions, the dot-com demise has provided plenty of candidates for entry-level and junior management posts.

"Recruiters are looking at us much more actively as a place to fill spots," says CPA Joel Freedman, vice president of finance for San Francisco-based McKesson, the world's largest supply management and healthcare information technology company. "We also are seeing many more quality candidates coming through than we did before, which certainly is related to what is happening in the dot-com industry."

Freedman sees this time as a win-win opportunity for CPA firms, industry and former dot-com employees alike. Firms and companies now can fill spots with more qualified candidates than they might have settled for during the height of the Internet rush, Freedman explains. And, former dot-com employees now have the opportunity to build a solid, secure and lasting career.

"The dot-coms were flashes--meteorites that burned out," says Rich Laveroni, personnel director with Oakland-based Rooney Ida Nolt & Ahern. "The accounting profession should capitalize on that." He adds that his firm would happily welcome former dot-com employees as long as they are qualified and indicate a sincere desire to stick around for awhile.

ROLLING OUT THE WELCOME MAT

"It's another new world," says Richard Blake, managing partner of Palo Alto-based Pearson Del Prete & Co. LLP. "The pendulum has swung." And it seems to be swinging in a better direction for small CPA firms like Blake's.

Within the last three years, Blake says his 16-member firm has had more turnover than in the 20 preceding years combined. And, he had to offer three rounds of raises within a seven-month period to block the exits. Still, he lost a key senior employee to a dot-com.

"She was offered the same salary she was offered here, plus stock options, but working half the time," recalls Blake. "I told her that if they had another opening I'd like to take it! How can you say no to that?"

Last year his firm relied on temporary agencies for help during tax season. "At one point we hired anybody that could walk and chew gum, we were so desperate for people. We felt that a live body was better than no body at all."

But times have changed. To his surprise, Blake notes that two people recently contacted him, unsolicited, asking for permanent tax season work and he had six other interviews set up for a single day in September.

"That just didn't happen last year," Blake says. He adds that not only does he hardly have time to interview all the available candidates, but candidate quality also has increased. "I'm getting people with experience, which was not what I was getting before. Now I'm getting people who weren't just accounts payable or receivable people, these people actually have a year or two of tax preparation, which is just great." Perhaps most telling: the senior employee who was swept away by dot-com fever returned to his firm earlier this year.

Tony Rose, CEO of Rose, Snyder & Jacobs, a 28-employee firm in Encino, says that his firm would consider former dot-coin employees if they had at least some basic bookkeeping skills, and a record of not skipping around too much from job to job.

"That gives us a base from which we can start training and bringing someone up," he says, adding that his firm also has considered hiring non-accounting grads. "Even though they might not go on to get the ticket, they can become good paraprofessionals."

Opportunities for non-CPAs could be in consulting, valuations, small business or attest-related paraprofessional work, says Rose. "Accounting firms are a great place to work. If accountants don't want to work here, there are other people who will want to, who are smart and can work with numbers and understand concepts and who have principles and ethics."

THE OTHER SIDE OF THE COIN

Laveroni says that while dot-com layoffs have increased the talent pool, they also have resulted in a work reduction for some accounting firms, particularly the Big Five.

"We anticipated a glut of dot-commers to come at us," Laveroni says. Instead, his firm has had more applicants who worked in the Internet sector for the Big Five, than from startups or dot-coms.

Blake adds that many newer dot-coms wanted to go public within two years or less so they went straight to the Big Five. When the dot-coms dried up, so did the Big Five's work, and those employees who serviced the dot-corns were subsequently laid off.

"I noticed a few months ago that there really was no need to resort to extraordinary measures to find employees," says Lynne Hague, human resources director for Santa Monica-based Gumbiner, Savett, Finkel, Fingelson & Rose and co-chair of CalCPA's Human Resources Committee. "It coincided with the dot-com [demise]."

Hague says that because her firm had to resort to extraordinary measures to find employees during the height of the dot-com rush, such as hiring chartered accountants from overseas, the firm implemented several employee retention strategies that paid off.

"People aren't leaving--there just isn't the movement," Hague says. She attributes this in part to today's wavering economy, but also to the firm's competitive salaries, company socials, daily snacks and dinner for anyone who works overtime. Hague's firm also has hired a scheduler who serves as the staff's "protector" by scheduling the right people for the right job and equalizing the amount of overtime put in--something she says has garnered much employee appreciation.

ATTRACTING THE REVOLUTIONARIES

"We don't have foosball machines sitting in the hallways," says Blake. "But we do have stability and the challenge of diverse work. There is a lot of client contact, diversity and a variety of work that may attract many former dot-com employees."

"[In public accounting] one works with relatively small, manageable teams on projects--whether it is audits or consulting projects--there is the opportunity to have a camaraderie that you often find at a startup," says Freedman. He adds that many CPA firms still serve successful high-tech and dot-com businesses. "They don't have to divert from that world completely, but they can do it in a fairly risk-free environment."

"We've been in business for 25 years and we're not going any place," says Rose. "There may not be high highs, but there are also no low lows--and it's unlikely that we'll ever miss payroll." Rose adds that although there are books written today encouraging employees to switch job every few years, he believes the recent dot-com downturn is a demonstration of how that is a dangerous course. "I'm hopeful that people will get it now: There is quality in businesses that are going to exist for awhile."

Deanna McCrary is a CalCPA editor and writer.

Sussing Out the Good From the Bad

When faced with a glut of resumes from candidates with significant dot-com experience, how can CPAs determine who is genuinely ready to settle into a steady career from those who just want to get by until the NBT (next big thing)?

"First and foremost, the hiring authority needs to recognize that specifically in the [San Francisco] Bay Area, it became nouveau to try out for the IPO billionaire scheme," says Brett Good, Northern California district director for Robert Half International. He adds that many quality, stable employees got caught up in that frenzy and are now looking to return to bricks-and-mortar businesses.

To determine whether your potential candidate is part of this group, Good says that recruiters should carefully examine the number of dot-com forays the candidate took and whether they were lateral moves, or indicated a progression of authority.

Good adds that it's also important to look at the where the dot-com was in its life cycle when the candidate came aboard. Ask questions such as:

* Was the candidate instrumental in setting up the financial package--or was it already in place?

* Was the company already established? Did it have substantial backing? Had it already gone through some maturation? Questions like these can indicate how thorough the candidate was in assessing their chances for success.

Laurie Eppler, recruiting project manager for Accountants Inc. says it's also important to examine the reasons the employee was laid off. "Ask such questions as: What could this person have done to stay with the company? Why didn't they? Were they the first to jump ship? What were the conditions for the layoff? How many people were let go? How did they determine who was let go (seniority, position, buy out)? Then verify this information with their references. Interview their boss and perhaps also peers and subordinates--other people who might not be listed as references."

Finally, Good cautions recruiters to be wary of titles. "In the height of the dot-com era, titles began to lose relevancy. People were given very fancy titles. It's essential to look at the scope of responsibility and examine carefully if it matches what you are looking for.

"References are paramount to pursue, regardless of whether they are from a dot-com or not."