PWC | bradszootales

Just when I thought I had heard almost everything, a group of over 40 year olds are suing Price Waterhouse Coppers for not hiring older workers! The lawsuit alleges that PWC discriminates against older applicants by focusing on college campus recruiting and trying to create a workplace “where youth is highly valued”, according to news articles.

Having grown up in business in what we now call a Big 4 CPA firm, I do have a couple thoughts to offer these disadvantaged older workers:

Although you may be attracted to the initial starting salary of up to $60,000, you better be prepared to work your behind off! CPA firms still average 70 to 80 hours a week, especially in the “busy” season from late fall until spring. Some CPA consultants work these long hours year round depending on the client and projects to which they are assigned. If you take the $60,000 and divide it by sixty plus hours a week you are really earning closer to $35-40,000 a year. And you have very little personal time! It is common to work late at night and six day weeks.

Starting jobs in the professions such as accounting and law have always been like this. There has been some effort, in recent years, to make them less exhausting and more family friendly, but based on the chat sites I reviewed, things have not improved much. This is why these starting positions are a young person’s game. Right out of college, with no spouse, and no family, this makes sense.

CPA and law firms also have very strict hiring criteria. The better firms only hire the best people from the best colleges. And, yes, they are mostly all young, recent college or MBA graduates. And they all report to young, bright people who may be in their mid 20’s who report to young, bright people who are in their late 20’s. This is the age old formula and it works. By the time a young professional hits age 30, most have left public accounting for a more stable, and family friendly job. The few that remain into their 30s and 40s have been well indoctrinated into the firm’s culture, which is also very hard to do with an older worker starting out.

So, believe me when I tell the older workers, you do not want a starting job with a CPA firm! The money may sound good but it is not a lifestyle that works for those over age 40!

The Wall Street Journal had an article called “AT&T to Keep Time Warner’s Culture.” This refers to the proposed acquisition of the media firm by the telecommunications firm. The deal is currently being challenged by the Justice Department. The article goes on to quote the CEO of AT&T saying he is “not a media tycoon” and he does not want to “screw it (Time Warner’s culture) up” by bringing them “a telephone company culture”.

Then the Journal had an interview with Amazon’s second in command, Jeff Wilke. In talking about their recent acquisition of Whole Foods, he said that Amazon “works hard to respect cultures that have been successful,” but that perhaps they can “help” Whole Foods with “resources, ideas and maybe IT services that Amazon has.”

This all sounds very smart and maybe even noble, but sadly, it will probably not play out this way for one or both companies. The larger, acquiring firm almost always screws up the leadership and culture of the smaller firm they spent a lot of money to buy. AT&T has offered $85 billion for Time Warner; Whole Foods cost Amazon $14 billion.

In most acquisitions, within three years two-thirds of the senior management of the acquired firm are gone. The Chairmen/CEOs go first, sometimes immediately with a huge payout for their stock and retention bonus (often equal to three years total pay.) Sometimes they hang around a couple years to collect an additional bonus. But Chairmen/CEOs go fast followed by their key reports. With these people goes some of the knowledge and value that the acquiring firm paid for. And after the senior leaders are gone, the culture of the company starts to fade away as well. Leadership and Culture are, after all, the flip side of each other.

Why do smart companies willingly or sometimes subconsciously change the successful culture and leadership of the firms they spend a fortune to buy?

First, the acquiring firm, by definition, is the winner in the deal. Thus, they believe that their systems, procedures, people and business strategies are far superior to the firm they just acquired. When the accounting firm PricewaterhouseCoopers took over the legendary consulting firm Booz, the PWC people felt they were in charge, regardless of the rich 100 year history of Booz.

Second, the acquiring firms have lots of staff that are dying to “help” the firm they just took over. From Information Technology to accounting to Human Resources to legal, etc. etc., there are plenty of people who just want to “help.” The building material firm, USG Corporation, acquired my old Donn Corporation which was one tenth its size. USG setup 24 committees to “help” integrate Donn into USG. Donn was a loosely structured, oral culture company with few charts and procedures. USG was much the opposite. A few years later only three of the top dozen Donn leaders remained.

Third, strategies and circumstances change rapidly in business. An old friend said that large firms can change core businesses and strategies faster than people change their underwear. Honeywell just announced that they will spin off two large business groups with $7 billion of sales, so that they can focus more on their core businesses, the remaining $30 billion. Ironically, the original Honeywell business, thermostats, will be spun off with a number of businesses that were acquired in more recent years.

In closing, having been both an acquirer and one who was acquired, I would like to wish the Time Warner and Whole Foods leaders and their culture the best of luck! Things will never really be the same. It will help if you keep in mind that your firm sold and those other guys bought. There are winners and losers in deals just like in everything.

Older Workers in CPA Firms

Mergers and Culture; AT&T/Time Warner and Amazon/Whole Foods

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