Orange County’s largest accounting firms reported something that hasn’t happened in a decade—a decline in employees.
The 48 biggest firms on the Business Journal’s annual list had a combined headcount of 5,462 as of May, down 1% from a year ago. The decline broke a streak of nine straight years of employee increases. Last year, they reported a 3.9% increase.
Altogether, 13 firms reported declines, including five of the seven biggest here. Nine said they had the same headcount. Only 23 said they boosted their employee count and three were estimates.
For the second straight year, OC employee growth was lower than companywide numbers on the list, which rose 6.9% to 1.2 million.
Nonetheless, more promotions and certified public accountants are increasing. The number of CPAs rose 2% to 1,891 while the number of partners climbed 2.6% to 633.
“While it was a challenging year, we continued to hire and had only slightly higher than normal turnover,” said Roger Weninger, regional managing partner for No. 5 Moss Adams LLP, which is headquartered in Seattle.
Moss Adams reported 283 employees, a 6% increase from a year ago.
“Hiring is very competitive and the opportunities in the market contain to be strong,” Weninger said. “As the world becomes more complex, we are seeing growth in opportunities, as well as in headcount needs across assurance, tax and consulting. The economy is very strong and the demand for qualified professionals is just as strong.”
Nine of the 10 largest firms on the list retained the same spot from a year ago.
Irvine was the favorite local base for the accounting firms with 29 offices, followed by Costa Mesa with five, and three each in Newport Beach and Brea.
Acquisition Push
Besides the pandemic slowing down business, another reason for the declining employee figures may be acquisitions.
In the past couple of years, seven Orange County-based firms joined other firms with headquarters outside the county.
KSJG merged with Withum Smith+Brown PC; HMWC with Eide Bailly LLP; White Nelson with CLA LLP; Kramer Olsen with BPM LLP; Bolar Hirsch with Armanino LLP; Squar Milner with Baker Tilly US LLP; and Hall & Co. with MGO LLP.
The OC-based companies say the acquisitions will help them expand services and participate in larger deals, according to Steve Milner, who sold his Squar Milner to Baker Tilly US last November (see story, page 21).
“We know we will be invited to parties that we previously weren’t,” Milner told the Business Journal at the time of the deal.
Larger companies make the acquisitions to immediately participate in the Orange County economy.
“If you look throughout the country, there are certain markets that are bellwethers in California,” MGO Chief Executive Kevin O’Connell told the Business Journal in February. “All of those other mergers came into Orange County to establish a beach head.”
Highlights
• The Costa Mesa office of New York-based Deloitte LLP kept its No. 1 rank with 847, although its headcount fell 14% decline from a year ago.
• On last year’s list, about a third of the employee increase came from one firm, No. 2 Ernst & Young LLP, which added 73 employees for a total of 561. This year, E&Y cut its count 3.4% to 542.
• Ted Wilm, managing partner at No. 4 PwC, is retiring at the end of this month. His replacement hasn’t yet been publicly disclosed.
• The biggest increase percentage was at BPM LLP, a San Francisco-based firm that more than doubled its headcount to 38 after its acquisition of Kramer Olsen. BPM climbed to the No. 31 ranking, up from No. 48 a year ago.
• MGO was the biggest riser on the list, moving to the No. 16 spot from No. 34 a year ago, as a result of its merger with Hall & Co., a deal that closed in January.
