Internal audit hiring insights: India may be growing less attractive; recruiting talent from the Big Four has downsides.
Top companies in North America have looked to India as a leading location for shared services centers and to potentially place at least some internal audit (IA) staff. They have also used the Big Four accounting firms essentially as a default source of new team members. Both of those trends may be wearing thin.
- One member of NeuGroup for Internal Audit Executives discussing his company’s rapid growth and accompanying challenges, noted the sky-high compensation packages in North America that prompted internal audit to look at its operations in India to locate some IA staff. Peers’ feedback, however, presented a more complicated picture.
- Tapping the Big Four as a key source of new hires also generated a range of views, with some members saying the gigantic, global firms often produce a check-the-box mentality.
India issues. One member said his company’s “P75” compensation philosophy—limiting compensation to the 75th percentile in a specific market—has prompted the need to locate IA staff outside North America, where talent is scarce and compensation through the roof. The company already has a significant shared services center in India and a recent acquisition will double the number of employees there, so stationing some IA there makes sense. But it’s not without complications.
- Many tech companies in India require employees to give them 90 days’ notice when resigning. That extended period creates a risk for NeuGroup members recruiting those employees, giving competitors time to snatch the new hire.
- “It’s not surprising to see rivals offering 60% to 100% increases compared to our company’s offers,” the member said.
- Another member added that turnover is every two or three years, as employees look for higher compensation elsewhere, and the compensation cost is rising 20% to 25% for each new hire.
- “There’s the initial entry cost, but there are latent costs your company will have to pay down the road,” he said.
- The member who prompted the discussion has noticed, at least initially, that while prospective IA hires in India have strong technical skills, some at senior levels lack presentation or soft skills, making it “challenging to put them in front of a global team.”
- One member offered this warning about going the India route: “Once you give up head count in the US, you’ll never get it back.”
Big Four qualms. The Big Four accounting firms have long been a source of talent for corporate IA, especially in the age of remote work, when the extensive training they provide employees is highly valued. However, one member, apologizing first to peers who likely started out at a Big Four firm, recalled the chief auditor from a major payments company telling him never to hire from the Big Four “because as an external auditor [they often do] a check-the-box type of audit.”
- A peer noted his own lack of formal auditor training, such as a CPA certification, and said that he prioritizes interviews to ascertain whether candidates have a risk mindset, since hires can be taught to be an auditor if they are naturally curious, good observers and willing to ask the right questions.
- “I don’t really consider whether they’re from a Big Four or not,” he said.
- While one member frowned on the Big Four’s strict, process-driven approach, others said it was good as long as it is balanced with real-world perspective.
- “I need the Big Four mentality to bring discipline, but I also need auditors with business backgrounds to say, ‘Yeah, that’s great, but it’s not how the real world works,’” one said. “IA should have a blend.”
The importance of presentation. Members also noted presentation and communications as important skills in the context of Big Four hiring. A member said he valued job candidates from the Big Four less for their intellectual curiosity and more for their ability to communicate to external stakeholders.
- “I think we undervalue that,” he said. “For me, it’s that ability to communicate with the stakeholder who often times doesn’t want you there.”