• Ah Youth! The Folly Of Blind Loyalty

    By • Sep 19th, 2007 • Category: Pure Content


    É um passo, é uma ponte, é um sapo, é uma rã
    É um resto de mato, na luz da manhã
    São as águas de Março fechando o verão
    É a promessa de vida no teu coração
    (…)
    António Carlos Jobim – Águas de Março
    Barreiro, Setembro.2006

    Earnest and hard working Neil McIntyre writes yesterday about the suit filed against KPMG for non-payment of overtime. I had hesitated in writing about it. Without the facts, it is difficult to make a judgement. But it was interesting to read Neil’s very strong views on the virtue of hard work and “paying your dues.” It was quite a contrast to the selection of Gen Y angst and optimistic naïveté that I highlighted yesterday and a little while ago.

    I have also written before about the moral and business hazard of firms that bill clients on a retainer basis but can’t get all the work done. They end up overbilling them or with a big liability for hours owed to the client, if the client is watching.

    Rather than framing the issue in its legal terms, (whether KPMG, once again, broke the law), Neil puts the discussion into the work-life balance category. His view is that working long hours now is worth it for the payoff later, hardly a typical Gen Y or otherwise view these days. Neil writes like someone with ten years experience in the business. Alas, it takes a few more to see the myriad of dangers in having a business model that depends on ninety hour work weeks. In time, in time…

    Work-life balance: KPMG sued in Canada
    KPMG is being sued in a proposed class action lawsuit filed the Friday before the long Labour Day weekend, citing employees were forced to work unpaid overtime hours.

    The lawsuit alleges KPMG employees routinely work as many as 90 hours a week to complete assignments on behalf of clients. The firm allegedly requires employees to “eat their time” if they spend more hours on an assignment than KPMG can recover from the client.

    First of all, the fact they were forced to “eat their time” is neither here nor there. What does it matter if the hours they work get billed to the client in the end? They’re being paid to do the work, and they’re being paid by the firm.

    Maybe my loyalty to the profession is clouding my judgment, but I can’t seem to muster much sympathy. The situation is the same at most accounting firms, and if employees don’t like it they can work elsewhere. The job market for accounting professionals is red hot these days…

    My response:

    1)This is not an isolated case. See this site.

    2)The key is, as you both said, what classification of employee she was, in real terms. They can designate exempt but it really boils down to nature of work and here in US there are a strict set of rules to use to judge. Also, having signed up for a salary and no overtime doesn’t mean that the switcheroo can be pulled later and 80-90 hours per week demanded to keep your job. That’s just inhumane. Just ask the poor Romanian girl at E&Y. (She’s dead.) In particular, there should at least be compensating time off, (assuming you can take it without jeopardizing your chargeability percentage.)

    3)Finally, it’s not ok when a firm makes anyone “eat their hours”, that is, not record them to their engagement billing system. It matters whether a client is billed for all hours they should be billed for or not. Your bonus, amongst other things, is dependent on it. It matters whether someone can see that staff are working 90 hours a week to finish a report. The firms can not measure their profitability and, therefore, are cheating everyone if they estimate and charge the client one thing and work substantially more hours to get the job done. Careers and fortunes are made on the numbers and, for an accounting firm, they should be right, inside and out.

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    10 Responses »

    1. Try this one on for size. Working ninety hours a week (or even 60-70) consistently leads to an individual who does little personal reading and who has few interests outside of work. This does not lead to long-term happiness. Neither does it lead to the necessary skills to develop judgment (do they still believe in this at the Big 4?) or to “think outside of the box.”

      All work and no play makes one’s mind dull. Could it be that most accountants suffer from dullness?:)

    2. I work ninety hours a week, but now and forevermore it’s for myself and for clients of my choosing.

      This accountant is working towards convergence – the synchronization of work and play, so that my work is an expression of what I enjoy in addition to being, hopefully, what I do well! ;)

    3. My manager, one of several who are completely awesome, called to remind me to go home today – I was in danger of hitting a 50 hour week.

      As posted here, it was a wonderful day. … of course I then came home to play around on my computer for fun, but what I do in my off-time is my business, eh?

      Working 90 hours a week only makes sense if
      1. you’re working for yourself (go Francine!),
      2. you’ve sold your soul to some i-bank that’s giving you an insane bonus in exchange for said soul (not that I’m interested, but at least on a dollar-per-hour calculation, it might be logical).

      I’m quite pleased with my setup – decent hours, decent wages.

      BTW, “Gen Y” is a failure of imagination. Or a failure of humanity. The cool kids among us know we’re actually called the Echo Generation. Read Boom, Bust, Echo!

    4. In addition to http://www.eylawsuit.com in California mentioned by Francine, there is also http://www.big4lawsuit.com.

      Besides the KPMG overtime lawsuit in Ontario, Canada, there is http://www.unpaidovertime.ca (overtime lawsuit against CIBC) (click on “video” on left hand side of homepage to watch the video of the press conference). One has to feel for the little guy when watching the press conference.

      For more media coverage regarding this subject in general, see http://www.businessweek.com/magazine/content/07_40/b4052001.htm. The lawyer profiled in that article happens to be one of the attorney who has brought suit against Ernst & Young.

    5. Opps. The link to the Businessweek.com article got chopped off. The complete link is as follows:

      http://www.businessweek.com/
      magazine/content/07_40/b4052001.htm

    6. These lawsuits are far from isolated and not exclusive to the accounting firms.

      As for the same October 1, 2007 BusinessWeek cover story regarding unpaid overtime lawsuits in the United States, there is also
      http://www.businessweek.com/magazine/
      content/07_40/b4052004.htm which cites examples of pending overtime lawsuits including the one against Ernst & Young.

      As for additional feedback from BusinessWeek readers regarding the cover story, see
      http://www.businessweek.com/magazine/
      content/07_42/b4054062.htm and
      http://www.businessweek.com/magazine/
      content/07_43/c4055104.htm.

    7. I work for KPMG in Ontario. I am currently working towards my CA designation. I knew going into this profession that overtime will be expected of me. However, I did not expect it to be so ridiculous. I have been working 7 days a week. From Monday to Friday, I work at least 12 hours a day. I probably work another 12 hours over the weekends. Needless to say, I have no life outside of work.

      I am a first year senior and am still learning. Due to high turnover at my office, we are simply thrown on large engagements even though management knows that we may not be ready for such responsibility. I do not mind the challenge. However, it becomes an issue when management expects us to complete the assigned engagements in fewer hours than prior year (even though in prior year the job was completed by a more experienced senior). Currently, at my office all our experienced seniors have left. There are seven first year seniors. Most of us feel very overwhelmed. Management involvement on most engagements is minimal.

      The economy in my city is not doing well. There are three big accounting firms here. These accounting firms have to compete for clients. They are willing to lower their fees to get clients. However, the partners expect good recovery on their jobs. The budgets for the jobs are unrealistic. As a senior, I am expected to complete my job within the budgeted hours so the partner will achieve the expected recovery. If I do not complete the job in the expected hours, it reflects in the review I receive from management. I am not the only one dealing with this. Almost every single senior in my office is going through it. Most of us deal with it by eating our time. At the same time, the Office Managing Partner is putting pressure on the staff to increase our chargeable hours. The issue is that if we are working more hours than we report. As a result the number of chargeable hours reported will far less than expected. It is a lose or lose situation. I am sure that everyone in public practice has faced this problem at some point.

      In October, I had a discussion with our “People Leader” at KPMG. He gave me positive feedback on my work with the company over the last year. I brought up the challenges that I am facing with managing my work and personal life. I told him that currently there are personal issues in my life that need some of my time after work. He said he will discuss it with my Performance Manager and they will sit down with me over lunch to discuss how I can achieve work-life balance. I did not hear back from the “People Leader”. After a couple of weeks, I dropped by his office and reminded him of this meeting we were supposed to have. He responded by telling me he will arrange something the following week. Another week passes by and I hear nothing. I send him an email and he again tells me “No problem. We will meet next week.” And again, I did not hear back from him. Come on, this is the “People Leader” at KPMG. Being a little bit more vocal than others, I reported the problem to an associate partner. He suggested I put together a group of us and complain. I have gathered all senior and will be meeting with management in a couple of weeks. We hope to address:
      - Unrealistic budgets;
      - The issue of seniors and junior staff almost forced to eat time; and
      - The lack of work-life balance.

      I highly doubt anything will come out of it. I am sure management knows how to respond to these issues in a manner that they can buy some more time and have us deal with this BS a little longer. Then there will be a wave of turnover and the same thing will happen to the new employees.

      I am hoping that someone who has been in public practice for some time can suggest ways to deal with these issues.

    8. ps… unfortunately for you and your fellow first year seniors, this is all too common, and will not go away until the model for paying partners changes. Partner’s are paid by achieving ever increasing and unrealistic realization rates, which are computed by the managers by backing into those rates from whatever the fee is for the engagement. If the fee is low, then you get an unrealistic time budget, but the managers bonuses are dependent upon hitting those unrealistic rates. The managers therefore have no incentive to help you, every incentive to help the partners, and in the end they only want you to come in at or under budget.

      you and your fellow first year seniors have some grim choices to make. None of them pleasant.
      (1) You can do nothing and let things be. Nothing comes of this, but you don’t ruffle feathers and don’t step on toes of people who wield a hammer over you (i.e., managers who write your performance reviews) that can severly affect your bonus and promotion chances.
      (2) Be vocal and complain, possibly steping on toes, and possibly getting smashed by someone who will use a hammer. As a warning, this is the more likely-than-not outcome if you do complain. The chances of being heard, and your situation being corrected are slim-to-none. I wish I could say otherwise, but then I wouldn’t be honest about your chances of a good outcome.
      (3) Transfer to another department that doesn’t have these issues. I know some departments that are very strict about not eating hours, but these are not the norm., and may not be what interests you.
      (4) Leave. Find someplace else to work that will not frown upon you posting your true hours. Not many of those places exist, but they are out there. Or, go to private industry. You may not want to leave, but sometimes you have no choice, otherwise, you will have to just take it. See choice (1).

      Best of luck to you and your fellow first year seniors in whatever you decide to do.

    9. Since ps is already working for KPMG in Ontario, couldn’t ps join the pending unpaid overtime lawsuit in Ontario, Canada? For example, the lead plaintiff in the pending unpaid overtime lawsuit against CIBC (www.unpaidovertime.ca) is a current active employee. Only by stepping up, can the business model in a given company/industry be challenged and changed. It seems that employers, to a large part, count on employees not to come forward.

      In addition to lawsuit against Ernst & Young (see http://www.eylawsuit.com and http://www.businessweek.com/magazine/content/07_40/b4052004.htm) in California, USA, PwC and Deloitte & Touche have already been hit with lawsuits for overtime: http://www.cfo.com/article.cfm/10047863/c_2984409. Also heard that KPMG in the states of California and Washington have also been hit. Ditto for BDO Seidman in California. Of course, since these unpaid overtime lawsuits are a lot more common in the US, they do not make the big “splash” in the media as the KPMG Canada overtime lawsuit.

      Best of luck, ps, whatever you decide to do….

    10. […] geeky and conservative than the average liberal arts grad, and the type who take for granted that they will have to pay some dues to get […]

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