What is currently happening in the labour market for accountants? Yacht is monitoring the labour market for professionals continuously. We hereby make use of Jobfeed, giving us insight on the developments concerning online vacancies. In addition, we use the occupations and labour survey (Beroepen en Arbeidsmarkt Survey). This is a continuous online research on the Dutch labour force from the ages of 15 to 65.The main goal of this research is getting insight in the behaviour of the labour market concerning several aspects of work. The total annual amount of participants in the research is approximately 10,000. The demand for higher educated finance professionals has risen since 2013. Finance and Accountancy employees are nowadays placed second as personnel hardest to recruit. The demand for Accountants and Auditors is high, so high that we can speak of a shortage. The demand for Finance managers and Business controllers is also sizable. Where did this shortage come from? A few years ago, several big accounting firms took cost saving actions when total revenue came under pressure. The credo was ‘ Higher performance with less employees’. Secondary working conditions retrenched and the inflow of recent graduates was limited. As soon as the firms recovered, the cost saving actions led to a new problem. This problem was also fuelled by the legal requirement of customer rotation. This requirement led to lower capacity, especially on medior level. New customers means new workflows, filing and communication. Accounting firms are screaming for new employees these days. According to our labour market research, the demand for accountants continues to soar. And they do not exist? Not enough. The accountancy profession was dealing with image damage the last few years; leading to a lower inflow of students. Another reason is the fear of students that the profession might disappear in the future due to digitalisation. The business world is also trying to get more and more financials. Many experienced accountants are changing from auditing to consultancy. The business world often offers a tempting package full of perks and career opportunities. The old logical path of graduating and becoming an RA at an accounting firm is not that logical anymore. The firms have to do their very best for new graduates. That is exactly what they did wrong the years before. This year, nearly all firms increased their recruitment targets, having direct influence on the supply and demand. What kind of employees are the firms looking for? Accounting firms are mainly interested in assistant accountants and management personnel. Employees with three to ten years of experience, often inflows from other accounting firms, are the most sought-after. Besides this group, more inflow from starters is needed. In the group, professional accountants with three to ten years of experience currently stand at 5,800 employees.. Annually, around 700 students graduate from their Accountancy master. This is not sufficient to meet the demand. How did your firm respond? For the last five years, we have an Accountancy Flexpool. Professionals from the pool are used during the ‘ busy season’ by several accounting firms. The rest of the year they are working in a different financial area. During ‘ busy season’ the professional can work many hours for an attractive remuneration. All hours are reimbursed. The professional is gaining valuable experience at different top companies in varying sectors. This might be a nice impulse on their career and leads to work variety. It is an opportunity to develop themselves in auditing as well as controlling. Yacht facilitates their professionals with up to date knowledge and the latest laws and regulations. You can also obtain your RA in the Flexpool. There is more and more attention for earning points in the business world, also supported by the NBA. What impact does this all have on current Accountancy students? There is a high demand for well-educated students, and this demand will increase further in the coming years. However, it is a smart decision to widen your bearings. Previously the career path for accountants was predictable, the only uncertainty was: Should I pick a small or big accounting firm? Nowadays, there are many more options. Now you can also chose for a non-accounting firm or the Flexpool in which you can combine controlling and auditing. It is still recommended to invest in competences such as consulting skills and project management. Because automatic systems take over more and more work from accountants, the functions are shifting slowly towards consultancy. The added value of an accountant remains, but the focus changes. If you respond well, the labour market is very promising.
The succes behind Vopak
Can you tell us something about yourself, your education and your career path? My education started at the HEAO (higher professional education). This was a conscious choice, because I was more inspired by the practice than the theory. And the strength of the HEAO at that time was that 90% of the teachers were working in business. After that I studied accountancy alongside a full-time job and qualified as chartered accountant when I was 26. After that I obtained my CMA qualification in the USA and followed various MBA modules. The combination of study and work really is “The hard way”. Because of this I missed the typical student life and, for that reason, would not recommend it to everybody. My first employer was the Ministry of Finance. To be honest, not my first choice, but as a result of the crisis in the eighties, there weren’t very many jobs for starters with the multinationals. The ministry proved, however, to be a really fascinating work environment. After five years I moved to Coopers & Lybrand (later PwC), an accountancy firm with many large and international clients. The 17 years I worked there were hard work and incredibly enjoyable, the last 14 of which as partner. In 2003 I was asked to join the Executive Board of Vopak as CFO. A move into the corporate world and to a really great company that operates in a fascinating global environment. In addition, I am currently a supervisory board member of the listed company Corbion. What has been your most enjoyable experience in your work and what your most unpleasant one? I have had very many enjoyable work experiences. My job at the ministry was varied and a good learning experience. In the dynamic accountancy practice of PwC I worked together with many diverse and large international clients, held inspiring management positions and specialized in mergers and acquisitions. And then I was, and still am within Vopak, able to do what I am passionate about, international business on a global scale. Our Executive Board is a small and close team of three people. Together we run five divisions and the global LNG unit. That demands intensive cooperation. We are continuously asking questions like: In which direction should we take the business in the long-term? But also: What can we do better today? Around us we have enthusiastic and professional teams in the different disciplines, working well together. My most unpleasant work experiences have been at a human level; I have twice experienced that a child of a close colleague had committed suicide; that unimaginable grief has always remained with me. In 2008 and 2009 you won the CFO of the year award for your efforts at Vopak. Can you tell us a little more about that? This award was given to me, but actually belongs to the whole company. We had come out of an unsettled period. In 1999 Vopak was created from a merger of two successful competitors. This created a global player that was not immediately successful. The scope – task storage, shipping, chemical distribution – was large and it was not possible at that time to create a genuine entity with one corporate culture. In July 2002 it was decided to spit off the chemical distribution business and Vopak continued with a clear focus on tank storage. On 1 January 2003 I joined the Executive Board, that was after selling off the chemical distribution business. The company began to show enormous resilience and growth. It has developed into a genuine market leader in the field of tank storage and has not only been able to maintain this position but to extend it further. The foundations of this lie not only in a thorough long-term vision and strategy, but also in a lot of discipline in the areas of finance as well as safety. How is Vopak dealing with the global trends? Global trends are incredibly important for us. One of the most important pillars on which our company is based is the physical global transport flows of oil, chemicals and gas. These products are transported because there is a surplus in one part of the world and a shortage in another region/continent. We call that an imbalance. We are never the owners of these products but store them for our customers. Our customers are, for example, large international oil or chemical companies, governments or commodity traders. We are a crucial link in this global trade of oil, chemicals and gas. The products that are transported by sea in tankers come onto land and are temporarily stored in our tanks. Here we connect transport flows with one another. From our terminals, the products then, for example, go further on smaller ships or tanker trucks. As a link in this global oil and chemical trade, global trends are of course incredibly important. The choice of location for building a terminal is crucial. A terminal is capital-intensive and not transportable, so the location has to be good. And in order to be able to make the right choice you need to try to make a good prognosis of the future physical global trade. Aspects such as the energy mix, economic growth and geopolitics are all relevant here. As it concerns capital-intensive decisions, you also need to have a very clear financial vision. So, our global playing field is very exciting. Ranging from challenges in the Middle East, Asia, China, North America and, for example, the future role of LNG. Can you explain the graph below? You can clearly see the (shareholders’) value that we as a company have created since 2003. In particular, in the period between 2003-2012 we have experienced double-digit growth. This is fantastic for a company and its investors and has given the price of the Vopak share a significant boost. However, in the current global economy, double-digit growth is not possible for our type of organization. We are moving more in a sideways direction. Very robust and solid, but
Big data is dead, long live big data!
Last summer, Gartner brought the term ‘big data’ towards its final resting place as a concept, a data-designation, marketing term and ‘buzz word’. The year 2015 is thus a sad year for all enthusiasts, gurus and marketers of big data. In 2014, big data as a topic was already over its ‘hype cycle’ and the expectation was that big data would, step by step, move towards the ‘Plateau of Productivity’. That is, the phase in which newer technologies surpass the hype for good and manifest themselves very positively. The business case has been proven, the technologies are developed further and everything falls into place. According to Gartner, big data has missed that chance. In the summer of 2015, big data has been declared ‘obsolete’.. End of story, end-of-the-line, over and out. Is it really that dramatic? Has big data become nothing more than a ‘buzz word’? I cannot imagine that this is the case. But what I have seen is that big data, at a certain point, could ‘solve’ more or less every world problem. No more famine on this planet, thanks to big data! Polar bears saved, due to big data! The Dutch football team finally becomes the world champion, because of big data! Make no mistake, there are numerous sectors in which big data brought about breakthroughs, and still does. I mention two extremes here: health care and marketing. In health care IBM Watson (an incredibly powerful super computer capable of analyzing huge big data sets) plays an important part in researching for example cancer. In the marketing industry big data is being used to develop customer profiles and to influence consumer behavior so companies can ultimately stimulate spending. It tracks everyone who is online. If you check out Marktplaats.nl (a Dutch version of eBay/Craigslist) for a nice little second-hand cart, chances are you’ll ‘accidently’ encounter advertisements for many more of those cute, highly similar carts. Your online profile has been created and is being monitored, updated and influenced on a continuous basis. For yourself, and pretty much half of the globe. Here you go: big data! Do you wonder what big data actually really is? Then have a look at the image below, which neatly summarizes it. It’s all about four dimensions. There must be a high volume of data (so a lot of data collected), variety (the number of sources of data) plays an important role, but also velocity (the speed at which data can be generated and analyzed) and veracity (degree of reliability of the data) determine the playing field. Just to be clear, big data is not equivalent to data analysis. We already utilize data analysis for connecting and analyzing transaction streams of, for example, purchasing process (procurement) combined with the sales process. These are relatively simple datasets (with sometimes very large volumes), that need not necessarily satisfy the four dimensions of big data. At Coney for example, the firm I am (not entirely by chance) associated with, we already audit by deploying data analysis and process mining, but we absolutely can’t speak of integration of big data in the auditing practice (yet). Now that the four dimensions are noted, and I named two sectors in which big data acquired its place in many aspects, the key question of this column is: How many applications of big data are currently integrated in the legal audit of a financial statement from an organization of public interest? With respect to the ‘volume-criterion’, I might as well raise the bar right away. Because I daresay that this is, as of now, very limited to nothing. Do I see the possibilities of using big data in auditing for myself? Absolutely! Checking and assessing debtors? Soon you will be able to do that with a real-time connection to the credit management agents that track and rate the payment behavior of businesses. A sophisticated algorithm tests the management of debtors of your client and predicts whether debtors are able to pay or not. This happens in split-seconds. You won’t assess single clients anymore, but entire groups of clients simultaneously. Analyzing, among others, profit margins by verifying the correct selling prices? Imagine that you’ll work as an accountant at the Dutch web shop Bol.com. Smart auditing robots developed by your accountancy firm make sure that, ‘from a distance’, the right profit margins are set by constantly looking up the selling prices of Bol.com (external source) and comparing these in split-seconds with the justified selling price in the database. Naturally this also happens at the purchasing side. Do I see the prerequisites under which big data can have a part in the auditing for me? This is not an easy playing field! Satisfying strict privacy regulations, guaranteeing the quality of big data and to obtain relevant, almost real-time data for the benefit of the auditing team… These are just some major bumps in the road. Long live big data! Because me being an optimist, I foresee we can overcome these bumps in the next five or ten years to come. In fact, I think that Gartner is completely wrong. I think that applying big data will turn the world of accountancy on its head, because of the following reasons: 1. In the upcoming 10 years we are going to see a move from ad-hoc auditing (on average three to six months after the balance sheet date, cough cough…) to continuous auditing. Big data (think here of the velocity criterion) follows perfectly on this and becomes the ‘smart data engine’ of the auditing-check. 2. Furthermore I feel supported by a recent article of fellow author Lucas Hoogduin, titled ‘Big Data as Complementary Audit Evidence’. In this article it is explained, in a structured and particularly constructive manner, how big data can support auditing qualitatively. I have read the article twice, and I felt huge recognition in it. But still there is a lot of work to do and I count on the future generation of accountants to contribute substantially to this. Long live big
EZ Boekhouding
In this student entrepreneur Ruud Hoevenaar and Jaap van Eggelen talk about their own business: EZ Boekhouding. He describes the establishment of the company and he explains what is like to be a student entrepreneur. The interview is made in collaboration with Starterslift Tilburg, which is the center of Tilburg University for entrepreneurial students with great talent and ambition. Could you briefly describe what the business involves and what it is trying to achieve? We are focusing on the music industry, which we are familiar with since we both graduated from the Fontys Rockacademy (Tilburg). Our business involves helping other musicians and cultural entrepreneurs (such as freelance photographers, dancers, etc.) to do everything they need to do as entrepreneurs according to Dutch tax regulation. When did you come up with the idea of starting your own business? This idea actually began a few years ago while I was already a teacher at the Fontys Rockacademy. Jaap had already build the basics, but it needed to be improved and we decided to elevate it to a real business. In what way has the company evolved since its inception? We had many! We started with the basic idea of accounting/bookkeeping, but then we figured that especially the tax applications are the biggest problems, so we solved that! Then there was the pivot of offline meetings versus online webinars. We gave a lot of seminars, now we are doing this all online and it is a big win for both customers and us. Simply because we do not need any space and it can be done at any time. Can owning and running a business be combined easily with your studies? Not easily as in, making money while you are sleeping. But yes, it can be done but sometimes it is tough when you have several deadlines for both work and study. What skills have you acquired during your studies that can be applied to your daily business activities? Applying the law! And I have to say that the classes from prof. mr. E.P.M. Vermeulen are very useful! Up to this point, what skills have you gained from the establishment of your business? A lot, I have learned how to do sales and how to manage marketing channels. I already did a lot of presentations but I just got more experienced by doing this for my own business. Especially on conferences such as Amsterdam Dance Event, de Jazzdag, de Muzikantendag(en) and many others. How do you see the future of the company? Building a company that really helps people doing what they are obliged to! That is my vision for over the next years and I would love to facilitate this through online meetings, conferences and our software! Finally, what would you like to say to students who are also planning to start their own business? Talk to some people in the entrepreneur centre in Tias building and set your first steps while you are planning to do bigger stuff! It is better to start talking and discovering while you are already in it, at least trying to be in it, than to build a perfectly hypothetical frame or plan which is build on risky assumptions. If you are interested about more of this you should definitely read The Lean Startup by Eric Ries and Running Lean by Ash Maurya. Feel free to contact me if you would like start your own business! ruud@ezboekhouding.nl General information Founders: Ruud Hoevenaar and Jaap van Eggelen Study: Fiscal Law Company name: EZ Boekhouding Location: Tilburg Employees: 3 Activities: Online accounting software (Musicians and other cultural entrepreneurs, niche-based) Website: www.ezboekhouding.nl
Did you know that…
In the first quarter of 2012, the number of iPhones sold per day surpassed the number of babies born worldwide (402,000 vs 300,000), according to Mobile First. Nigeria is the world’s largest producer of oil. The amount of gas burned off by the oil production in Nigeria is more than enough to power the whole continent of Africa (but is cheaper to burn it than to produce energy from it and they make so much money from oil that they do not care about the gas produced). Adjusted for inflation, Warren Buffett was a millionaire by age 25. Bill Gates told his Harvard University professors that he would be a millionaire by age 30. He became a billionaire at age 31. The accounting profession has its own holiday, International Accounting Day, which takes place annually on November 10. JP Morgans Uncle, James Pierpont wrote Jingle Bells in 1857. Until the US federal reserve was created in 1908, individual banks could create their own money. A dollar bill only lasts 18 months before it wears out. The history of Wall Street dates back to 1600, when New York was called the New Amsterdam settlement. Back then, before the bells and exchanges, it was merely a pathway that ran alongside a wall protecting the settlement from Native America attacks. In a moment of creativity, the citizens named the corridor “Wall Street”. Research has shown that as little as 10 hours personal financial education positively affects students spending and saving habits. The average 21-year-old in the United States will spend more than 2.2 million in their lifetime. The Amsterdam Stock Exchange (now part of the Euronext Exchange) first listed shares in 1602. The first stock to be traded was that of the Dutch East India Company, a multinational mega-corporation granted monopoly by the Dutch government to conduct trade with Asia. The company operated for almost two centuries, paying out an 18% annual divided for almost the entire time! American student entering college are offered an average of eight credit cards during their first week of school. The lowest position of the Dow Jones ever was 28,48 in the summer of 1896. The highest position was 18.288,63 in March 2015. The Swiss banks own 35% of the worlds capacity together. The biggest coin on earth is a Canadian coin, worth one million (Canadian) dollars. It has a diameter of 51 cm and weighs about 100 kilograms. The euro sign is developed by a Belgian named Alain Billiet, and was presented in December 1996. Ten percent of the Russian government’s income comes from the sale of vodka. The Dutch ten cent piece has been used for the hole in cd’s and dvd’s
The bonuses of executives should be decreased in fair proportions!
Nowadays, it has become an annually phenomenon. Every year, the Dutch newspaper ‘De Volkskrant’ publishes the results of their own research concerning the fee of top executives of several large enterprises in different sectors. Each time, it turns out that the difference in premiums between the top executives and the ordinary employees gets larger and larger. The ordinary employees are receiving a limited increase of income, while the top executives of the company are receiving large expansions of wage, loyal bonuses and additional retirement pension premiums. The ratio between the fixed rewards of top managers against the rewards of the employees with the lowest wage has been raised to the factor 50 or even higher. In other words, one hour of work for the top of the company is equal rewarded to more than one week of work for an ordinary employee! The top management explains this difference using arguments such as: unique talent on the top is scarce, for less reward it would be impossible to find good managers in international context, the wages of executives outside the Netherlands are even higher, increased share prices indicate that the top managers are worth the money, or the critical people are just jealous. There is no single word mentioned about the intern ratios between the premiums of ordinary employees and those of the executives. Nevertheless, the reasonability, fairness and the defensibility of the intern ratio between the premiums are of great importance as well. Apparently, top executives, supervisory board and the remuneration committees do not pay much attention to intern ratios. It seems, the people mentioned before are living in another world and reflect their decisions in that world as well without focusing on the real world outside. They are like sons of God living on the Olympus, refusing to look upon the normal, real world and the base of the mountain. The FNV is against the provided arguments of the top managers for high premiums and rewards; those arguments are just sophistries for high bonuses. Why unique top talent? The big problems in the world of banking proved the lack of skills of our ‘top talents’. For what reason is it impossible to find the same talent against a lower wage? This phenomenon is all about the lack of intrinsic motivation of those people to do a good job. Consequently, this is an offence against people who are qualified for the same position, but motivated to do their job against a normal reward. The way of acting gives a wrong sign to the society: apparently, if you are a ‘talent’ you have to ask a lot of money for doing your job, because otherwise you are not a talent at all. This idea of working is not in line with professions like nurses, teachers, police officers and more, for these jobs there are unique top talents as well however. They do not earn that much money, but are still motivated to work excellent. The wages of executives outside the Netherlands are even higher. Yes it is, when you are benchmarking the wages of top executives in a selective way! Even more when you are comparing the Dutch loans with higher paid examples from abroad. Consequently the premium becomes larger and the median will rise as well. Because of that, a causal affect arises because of the use of wrong data. Unfortunately, the top executives do not want to compare their bonuses with the premiums of lower paid companies abroad. Well, as a matter fact they do look at the wages of lower paid companies, when the wages of ordinary employees is benchmarked. The top deserves the high rewards because of the increase of the stock market value of the company. This statement is unproven. There is no clear causal connection between the performance of the top executives and the stock market value of the company. Furthermore, the stock market value is determined by a lot of factors. Besides, the stock market value fluctuates from day to day. In case the focus is on the short-term value of the company, maybe it is a better idea to look at the long-term value of the company in terms of continuity, customer satisfaction and corporate social responsibility. Critical people are just jealous. This is just the opposite of the reality! A top manager can be satisfied with a premium until a new benchmark research occurs and show a loan of a similar top manager who earns more than he does. In that case, the manager wants to receive a higher loan as well. Why? Just because of jealousy and status. The FNV thinks that both employees and managers contribute to an organisation, respective to their abilities. In the same line of reasoning, employees and managers should share equally in benefits and concerns. During prosperity, all workers get a relatively comparable pay rise and profit share. The same should occur during bad times, both parties should deal with no or little pay rise. In this case, the top managers are still earning more money due to the complexity and high responsibility of their job. Top managers are supposed to obtain and maintain fair reward ratios between themselves and others working for the company or institution. This should happen instead of comparing themselves to other top managers in the international labour market. Next to the fixed salary we often observe exorbitant bonuses for top managers while some did not even perform well. The FNV believes that these bonuses should be retained strongly. The bonuses lead to undesirable behaviour; managers are only interested in short-term targets (share price, profit) at the expense of long-term results (customer satisfaction, risk management, quality). We have already observed this kind of behaviour at banks. However, these bonus schemes did not change. Bonuses are impossible to monitor, criteria’s are unclear and individual influence on results are hard to observe. Furthermore, top managers are already paid extremely well for doing their job, there should not be a need to provide them