The companies that provide audit, tax and consulting services to other businesses have long comprised a key part of one of the largest sectors in Connecticut. The COVID-19 pandemic has not diminished their importance to the state’s economy.
Highlighting its resilience, the professional and business services sector in Connecticut has fully recovered from the jobs loss that it endured during the first couple of months of the pandemic. Robust demand for the specialties of those firms — a group that includes the “Big Four” of Deloitte, EY, KPMG and PwC — has fueled their hiring in the past couple of years. At the same time, those companies’ implementation of hybrid workplaces has helped significantly in recruiting and retaining employees.
“We’re bullish on the opportunities,” Heather Ziegler, managing partner of Deloitte’s Stamford office, said in an interview. “We’ve been around a long time, and we plan to be here for the long haul.”
Looking to hire
Like other sectors, professional and business services’ employment was hit hard during the beginning of the pandemic. From a statewide total of 216,400 in February 2020, its workforce decreased about 9 percent to 196,400 in April 2020 — its lowest point during the pandemic, according to state Department of Labor data.
Hiring has rebounded in the past two years, with the sector posting year-over-year job increases every month since April 2021. The sector’s total of 218,200 in June 2022 was 2.4 percent higher than in June 2021 — the same rate of increase as the overall growth in Connecticut employment during that period.
As of June 2022, professional and business services’ employment ranked third-highest among private-sector fields in Connecticut, after education and health services and trade, transportation and utilities.
The jobs outlook is clouded by the prospect of another economic downturn, with the U.S. entering a technical recession after gross domestic product declined in the first two quarters of 2022. But executives at the Big Four firms said that they intend to keep hiring.
After losing 20,000 jobs in Connecticut during the first couple of months of the pandemic, the professional-services sector has since regained those positions.
January 2020: 219,700 (total number of professional-services jobs in Connecticut); February 2020: 216,400; March 2020: 217,800; April 2020: 196,400; May 2020: 198,100; June 2020: 198,800; July 2020: 200,100; August 2020: 202,200; September 2020: 204,300; October 2020: 206,800; November 2020: 208,100; December 2020: 209,200
January 2021: 209,000; February 2021: 210,700; March 2021: 210,900; April 2021: 211,800; May 2021: 213,500; June 2021: 213,000; July 2021: 213,800; August 2021:213,700; September 2021: 213,500; October 2021: 215,800; November 2021: 217,100; December 2021: 215,300
January 2022: 213,700; February 2022: 212,100; March 2022: 215,800; April 2022: 215,800; May 2022: 216,900; June 2022: 218,200 (most-recent month of available data)
Source: Connecticut Department of Labor
“We hire about a year in advance — so there’s an element of forecasting, planning and estimation that goes into it. But we feel pretty confident with our outlook,” Allan Colaco, managing partner of KPMG’s Stamford office, said in an interview. “The recruiting and hiring are at a pace we’re satisfied with. The next challenge becomes retaining all of those people.”
Colaco cited clients in financial services as a growing source of business. For firms in that sector and other fields, technological advances and a shifting regulatory landscape figure among the reasons why they call on the Big Four and other professional-services firms.
“Clients are looking at efficiency and productivity,” Ziegler said. “They’re looking at artificial intelligence, blockchain and cybersecurity. And the SEC is looking to codify the environmental and social, governance standards… How do clients prepare for uncertainty and continue to manage disruption and stay in front of innovation? All of that increases the need for consulting services.”
EY officials said that they are also growing their ranks.
“The hiring can vary a bit based on local economies, as we tend to have more financial services in Stamford and insurance clients in Hartford, so the needs are not always the same,” Jonathan Lipschutz, managing partner of EY’s Stamford office, said in an email. “As for our hiring outlook, the firm continues to grow and are always seeking talented professionals. I would encourage those with an interest in professional services to reach out as we are always looking for strong talent.”
Many of those who are hired to work in the Big Four’s offices in Stamford and Hartford are graduates of Connecticut institutions.
“Connecticut is home to a diverse and highly educated talent pool,” said Lipschutz, an alumnus of Quinnipiac University. “EY has a long history of recruiting from colleges and universities across the state and has strong relationships with institutions including Quinnipiac University, Fairfield University, UConn and others.”
Deloitte has approximately 1,150 people based in Stamford and about 400 based in Hartford. KPMG has about 400 based in Stamford and about 200 based in Hartford. EY has a total of approximately 570 based in its Stamford and Hartford offices.
PwC had 900 based in Stamford in the fourth quarter of 2021, according to the most-recent jobs data from the Stamford Office of Economic Development. A message left for PwC was not returned.
To support their retention of employees during the pandemic era, professional-services firms have instituted hybrid workplaces that allow for remote working and flexible schedules. But they still value in-person collaboration among colleagues and clients.
“It’s more beneficial to the retention of our people if we are able to relate to each other on a personal level,” Colaco said. “And I believe that’s more easily done with a mixture of in-person and remote work, as opposed to one or the other. And I believe it’s easier to build and maintain relations with our clients when we’re doing a combination of those things.”
Similarly, Deloitte is not mandating set amounts of time that employees spend in its offices — but the company encourages in-person interactions.
“In-person collaboration is still critical, especially when you’re talking about professional services” Ziegler said. “It really drives professional development and helps inspire teams, creates a strong sense of connection and culture and drives innovation.”
Committed to Connecticut
Government support has solidified the large professional-services firms’ commitment to Connecticut. During the 2011-2019 tenure of then-Gov. Dannel P. Malloy, Deloitte, KPMG and PwC qualified for subsidies from the state Department of Economic and Community Development (DECD) that were tied to creating and retaining jobs.
DECD supported KPMG’s relocation of its Stamford offices — from 3001 Summer St., to the downtown building at 677 Washington Blvd. — by making the company eligible in 2018 for a $3 million grant to support lease-related improvements, equipment and other moving costs. The company can earn the grant by creating 110 jobs.
Today, KPMG is planning an approximately 5,500-square-foot addition to those offices that will increase their footprint to 41,255 square feet.
The grant, “made being in the building and location we’re in more attractive for us,” Colaco said. “And when we talk about expanding our footprint in the building, it’s helpful that we have those economic incentives.”
Deloitte left the state’s First Five Plus program in early 2020, without receiving any subsidies, after concluding that it did not need that taxpayer-funded assistance to keep growing in Connecticut. PwC has also decided to not take any of the funds for which it was eligible, according to DECD officials.
“We knew we were going to stay here. We’re here for the long term,” Ziegler said. “There are lots of other benefits of being here and continuing to grow in this space.”
While the state funds were approved by his predecessor’s administration, incumbent Gov. Ned Lamont has also endorsed professional-services firms.
“Now you see KPMG here, which is probably one of the world’s leading professional-services firms,” Lamont said during a July 2019 visit to KPMG’s offices at 677 Washington. “It’s just so important they’re here in Connecticut and here in Stamford — to have the very best, top-quality advisory and tax services available in the world, right at your doorstep.”
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