Professional-Services Firms Forge Growth in Southwestern Connecticut
The following appeared in The Stamford Advocate on October 16, 2017 and features comments from OperationsInc CEO David Lewis. To view the original article, please click here.
by Paul Schott
STAMFORD — The experts are in high demand.
Professional services comprised one of only two job sectors that grew its ranks in the state in August. Stamford, in particular, represents a hub for some of the industry’s top firms, who are attracted by the city’s growing economy and proximity to New York City. A number of those companies are increasing their local ranks and expanding into promising digital fields.
“We picked this space because of the opportunity to foster future growth, which we’re really bullish on,” Greg Budnik, RSM’s market managing partner and assurance practice leader for the Connecticut and Westchester County, N.Y., markets, said of the firm’s new downtown Stamford offices. “We think this will be a space that will do us well into the future.”
About 217,000 were working in professional services in Connecticut in August, essentially flat compared with the same period last year, according to state Department of Labor data. But the sector’s employment has grown by about 14 percent since a nadir of about 190,000 in January 2010, when the state was in a recession.
Southwestern Connecticut is a locus, with many of the sector’s leading firms maintaining regional offices in Stamford. Their key services include accounting, tax support, auditing, consulting and wealth management. They represent clients in a range of industries including financial services, biotech, consumer goods and real estate.
RSM moved in late July to its offices at 200 Elm St., in the BLT Financial Centre, after a 15-year stint in the city’s South End. In the past 10 years, its local contingent has grown from approximately 150 to about 200.
At the downtown office complex, it joined another industry powerhouse, Deloitte, which moved in November 2014 from another South End property. The firm now employs about 1,100 in Stamford, compared with about 440 a decade ago.
“We wanted to take advantage of the larger metropolitan area,” said Heather Ziegler, Deloitte’s Stamford managing partner. “We felt, for Connecticut, having a larger presence in Stamford made sense.”
The firms are finding plenty of work in the area, spurred partly by the proliferation of regulations in recent years in industries such as financial services.
“The days of one company working with one service provider are pretty much over,” said Ken Seel, KPMG’s Stamford managing partner. “What happens to all the service providers, your client base just got wider because now you’re working with a lot more clients. Somebody says ‘If you’re my auditor, maybe I don’t want you doing my tax work, so I’m going to give that to another firm.’”
During the past seven years, approximately the time Seel has served in his current position, KPMG’s Summer Street-based contingent has grown from about 200 to some 350.
Clients are keen to hire consultants because they offer companies immediate expertise without having to add employees to their payrolls or slog through lengthy hiring processes.
“In an economy where growth is always mostly in the small-business sector, having an outsider to be able to pull into the company for a month, week or even a day to give you that high-end expertise on a particular issue, and give you regional, national and global perspective on what’s going on, is extremely valuable,” said David Lewis, founder and CEO of Norwalk-based HR outsourcing and consulting firm OperationsInc.
KPMG and Deloitte comprise two of the “Big Four” professional-services firms — EY and PwC, the other two, also have Stamford offices — which focus heavily on Fortune 500 companies. RSM operates in the middle market, specializing in firms with up to $1 billion in annual revenues.
“It provides us an opportunity, because of the type of client in the middle market, to offer more senior-management face time with our client base,” Budnik said.
State officials have offered strong support to the industry. Deloitte is a participant in the First Five Plus program, making it eligible for some $14.5 million in state grants if it hits certain hiring objectives.
Trust in technology
Professional-services firms said they are embracing the rise of the digital economy. Disciplines such as data analytics, forensic accounting and cybersecurity represent some of their fastest-growing specialties.
“We have different cybersecurity specialists for different types of issues,” Seel said. “But you wouldn’t necessarily keep a whole team of cybersecurity people on staff. … Those are the kind of things that we’ve been doing that we’ve been growing.”
Technological advances also offer the promise of allowing the firms to do more work, for more clients, in shorter time spans.
“Data analytics is becoming huge in the audit industry… essentially you have the ability to get at the data quickly, analyze it and draw conclusions from it,” Budnik said.
The companies also position themselves as adept at helping their clients to make sense of technological shifts affecting their industries.
“Disruption, data and digital — those are going to be the drivers of a good amount of (Deloitte) growth,” Ziegler said. “When we help companies with those things, the companies grow as well.”
But the experts also have to watch out for their own digital vulnerabilities. Deloitte’s email system was recently attacked by hackers.
“Only very few clients were impacted,” and the hack did not disrupt clients or Deloitte’s ability to serve them, Deloitte officials said in a statement. They did not specify the locations or industries of the clients.
Deloitte contacted the affected clients and government authorities and launched an “intensive and thorough review,” which included mobilizing cybersecurity and confidentiality experts inside and outside the company, the company said.
“When there is some sort of breach, firms like Deloitte work to minimize repercussions that would occur,” said Art Schmeiser, a retired Deloitte partner, who is now an instructor-in-residence in the University of Connecticut’s business school. “I think the firms have been very good about that. They’re selling professionalism, trust, honesty and integrity. If they start to lose that, then they would start to lose the business. They know their professional reputation is at stake.”