January 27, 2023
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When I first started covering the accounting profession, I wrote a lot about layoffs that were happening at Big 4 firms. It was great because the coverage allowed young professionals to collectively prepare and then weather the fallout from all the job cuts the big firms were doing at that time. But it was also terrible because countless people lost their jobs and had to start over. Best of times, worst of times, etc.
This was circa 2009–2010, and looking back on it, this was really the beginning of a renaissance in the accounting profession. The financial crisis and slow recovery that followed allowed many people in accounting to think about what they would do next. It led some to start their own firms, or to join smaller ones, and to embrace technology—particularly cloud-based platforms—in a way that transformed how firms are run.
I’ve been thinking a lot about that time because right now the news is full of stories of massive tech and media companies laying off tens of thousands of employees. To me at least, these feel similar to the layoffs the Big 4 were doing more than a decade ago because they’re so ordinary and so inevitable. In a way, this is how big business works, and it’s been this way for a while now. They give you a prestigious name on a resume, a big salary, and you can drink all the cold brew you want. In return, people grind it out, committing themselves for years in some cases, and then one day they’re done with you:
Millions of American workers have never known a world without the specter of mass layoffs. That kind of instability has characterized the economy since the late 1970s and ’80s, when the notion of prioritizing shareholders above all else took root and companies embraced the strategy of growing fast and then cutting down quick. Some executives rushed to frame that tumult as intrinsic to corporate life: In 1996, Robert Eaton, chief executive of Chrysler Corporation, said that downsizing and layoffs are part of the price of becoming more competitive.”
Sure, sure. CEOs will talk about the pressure to cut costs or trim the fat or “right-size” or whatever, but make no mistake: Many big businesses—whether a Fortune 500 corporation or a global partnership—will eventually opt to get rid of employees they could easily afford if for no other reason than other businesses are doing it. Here’s Stanford professor Jeffrey Pfeffer in an interview last month:
Could there be a tech recession? Yes. Was there a bubble in valuations? Absolutely. Did Meta overhire? Probably. But is that why they are laying people off? Of course not. Meta has plenty of money. These companies are all making money. They are doing it because other companies are doing it.
The main difference this time around is that lots of people are getting the bad news while sitting on the couch staring at a computer screen. As one person told the New York Times, “Normally you’re like, ‘OK, I can go get drunk,’” but not if all your fellow non-unemployed friends live in different cities. And I think we can all agree that virtual happy hours are terrible.
On the bright side, some lucky small businesses are about to scoop up some serious talent from these big business refugees. If you’re advising small businesses on hiring and retaining employees, I’d be telling them that this is the perfect time to make a bunch of noise about how much they appreciate and value their employees. Because big businesses, no matter how much lip service they pay to it, have no credibility in this regard:
“That is one of the great contradictions of corporate life,” [Harvard professor Sandra] Sucher said. “All corporations say ‘People are our most important asset,’ but they don’t really seem to believe that.”
Call me cynical, but in the end, a big business will always choose itself over scores of its employees. It’s just the nature of the beast. Small businesses need to use this fact to their advantage. Win over these people by being a great employer and treating them like humans instead of numbers on a spreadsheet. In return, they’ll work hard and maybe stick around a while. Maybe a long while. And they won’t even expect cold brew to be on tap.
People are worried about accountants
Late last year, we talked about how people are worried about the lack of accountants. And oh look, early this year, people are still worried about the lack of accountants. Fortunately, in this entry of the Wall Street Journal’s wall-to-wall coverage of the GREAT ACCOUNTANT SHORTAGE they found a firm that’s actually doing something about it:
[W]ith tax season poised to kick off, small and midsize accounting outfits that serve family businesses, individuals and smaller companies say they are offshoring jobs as local recruiting pipelines dry up and accountants leave the profession in droves.
Dan Geltrude, founder of an accounting firm in Nutley, N.J., hired a 10-person tax team in Ahmedabad and Bengaluru, India, last year and plans to expand to 15 workers.
“This would have been a crazy idea for us 10 years ago. Now, this is absolutely part of our operations,” he said. “There’s no other way for us to meet the demand.”
Okay, so the good news is that there are at least a few firms out there that aren’t sitting around waiting for their dream team to show up on their doorstep. They’re going abroad to find the people they need to get the job done.
But if you’re worried that you’ve spent all this time and energy worrying about accountants and now you won’t have to worry about them any more… don’t worry. A guy who runs a professional staffing agency, told the Journal that the Great Accountant Shortage will soon be a global phenomenon: “International accounting talent is in such high demand that it, too, will run thin.”
Honestly, do we really want to live in a world where everyone has all the accountants they need? It wouldn’t be the same.
The man-goes-first convention on the 1040
Okay, so here’s something I didn’t expect to read about:
According to a first-of-its-kind assessment from researchers from the U.S. Treasury Department and the University of Michigan, men’s names were listed first on 88% of joint returns filed by opposite-sex married couples in 2020. That figure has trickled down a little since 1996, when nearly all returns—97%—listed the man’s name first.
The gender-equality movement of the past few decades changed the composition of boardrooms, universities, operating rooms and legislatures. It has barely budged the man-goes-first convention on the 1040. Among couples filing jointly for the first time in 2020, 76% put the man’s name first.
Anyway, if you’re thinking, “Well this is silly, can’t we just take turns being listed first on the tax return?” Sure, you could—definitely not tax advice!—but you might knock the Earth off its axis:
The Internal Revenue Service instructions for Form 1040 include a tip for taxpayers: If you are filing a joint return with the same spouse as last year, put your names and Social Security numbers in the same order as last year.
It isn’t a requirement, per se, just some friendly neighborhood advice from the government to ward off disaster, like when they tell you to carry bear spray at Yellowstone National Park.
As we’ve noted, the IRS isn’t exactly a well oiled machine. So if you and your partner are looking to practice gender equality in virtually every aspect of your lives, just know that as far as tax returns are concerned, it might be more trouble than it’s worth.
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