On 1 November 2022, Pat Kramer became Global CEO at BDO, with over 30 years of industry experience, based in Calgary, Canada. Zoya Malik, Editor-in-Chief, International Accounting Bulletin caught up with him to speak about his vision for BDO’s international growth, investment and managing risk through turbulent economic times
Zoya Malik: How has your organisation grown post-pandemic and over 2022-23? Where has this growth come from?
Pat Kramer: BDO has grown both organically and through M&A in 2022. Despite last year’s changing market conditions, BDO has remained confident and has continued to invest in market-critical acquisitions, with a strong focus on niche advisory, sustainability, digitalisation and technology service providers. The mergers & acquisitions, as well as the intake of new partners and staff are a reflection of our firms’ well-considered strategies.
In the last 18 months, across many markets, we have experienced a surge in demand across most services lines and industries, with unprecedented business opportunities.
The Americas region has grown the most, with BDO in the US recording a nearly 25% increase in revenue. In EMEA, particularly in Europe, growth has been impacted by the ongoing uneasiness and uncertainties due to energy scarcity, increased cost-of-living and instability of the region. In Asia-Pacific many markets have performed well, but China is still experiencing challenges of the health crisis and ensuing restrictions.
ZM: What tech investment is planned over 2023 and what are the priorities regarding staff in terms of hiring, incentives and retention?
PK: BDO continues to make significant investments in our own digital expertise and services. We are becoming a true digital-first organisation, creating value for our clients by driving business impact through digital excellence. BDO’s deep business knowledge, combined with Cloud solutions and services will enable business transformation and growth for our clients around the world. Some of the shared technology solutions include security, compliance & identity management (SCIM), de-risking the client’s environments, implementation of business applications such as CRM or ERP systems, monetising data, accelerating business through data analytics and AI solutions.
Moreover, BDO’s APT Next Gen, our latest iteration of BDO’s audit process tool, and BDO Portal, our online digital collaboration platform for BDO professionals to efficiently engage with their clients, leverage world-leading technologies to unearth insights and intelligence. Both truly global tools, BDO Portal currently has +240,000 active client portals and more than 315,000 client users.
Undoubtedly, talent will be one of our top priorities for 2023. The intake of new talent has significantly reduced and we all face new realities. The anticipated global recession will not immediately solve these issues. We are and will remain a talent-driven organisation. A lot of work has already been done by our firms. We will be leveraging that and will continue to invest in various talent initiatives – creating a true learning and development mindset, and in increasing the collaboration between our firms.
ZM: In terms of recruitment, what strategies have been put in place to retain and onboard joiners to meet DEI targets?
PK: BDO’s ambition is to be the Employer of choice, and this entails creating an inclusive and supporting environment for everyone within BDO and for everyone who may wish to join BDO. Our firms have specific DEI policies and programmes to ensure that we are always working hard to achieve our goal – this is not a static environment and we do not believe one size fits all across the globe. Similarly our firms use targets where they consider that targets can be helpful in achieving our goal. Our firms’ programmes aside, BDO also invests in a number of strong global initiatives, such as dedicated training programmes (Global Partner Leadership Programme, Harvard training, …), virtual global meetings inviting our entire workforce to join and our yearly International Women’s Day Report, showing how our female professionals really make an important difference at BDO.
ZM: Outside of those recruited via a traditional accountancy background, what other key academic and other technical skills are networks looking for in a candidate search?
PK: Without compromising the importance of academic or technical skills, we attach considerable value to a more intangible skill set & abilities, such as communication, flexibility, etc. We will carefully evaluate an individual’s future potential. As we are facing a changing and uncertain future, what a candidate can potentially achieve in the future with their transferable skills is more essential than what they have done so far. What brought us here will no longer be sufficient. As an example, over the last year we have recruited more data scientists and have even appointed meteorologists to enhance our ESG advisory services. A variety of new profiles have been welcomed by our firms.
ZM: What is your recruitment and retention strategy in 2023? What do you need to balance going forward in terms of new required specialists and in member firms staffing requirements globally?
PK: Our 2023 recruitment & retention strategy will remain to be recognised as an employer of choice. BDO will continue to attract & retain the best talent, allowing them to reach their full potential and achieve BDO business success. That said, tomorrow’s organisation will be entirely different than today’s. It will be more flexible. The pandemic has demonstrated that working & collaborating remotely is successful. It has created new potential for our firms to collaborate more, offering expert teams, with people from anywhere in the world. Outsourcing and flexible resourcing results into very diverse teams, with added value, both for BDO and our talents – who’s growth potential only increases with this new way of working.
ZM: How much investment has been made into tech for tax advisory to support member firms?
PK: We continue to focus on helping clients adapt as more countries adapt unilateral measures to address how the ‘digital’ economy will be taxed. Our interactive map of these measures, the Taxation of the Digital Economy, continues to develop and be updated to help clients keep on top of these measures. In Global Employer Services, we have built the Global Assignment Management system and a Business Traveller tool, QuickTrip, is being kept continually up to date – which is important as clients continue to work remotely and more flexibly than ever before. One focus for this year has been the initiation of our Tax in ESG hub which investigates the role of tax in global sustainability efforts as well as in terms of governance and ‘responsible tax’. We also have a series of online global tax tools including on topics such as DAC6; Global R&D tax credits and incentives; and COVID-Fiscal and Financial Measures. We continue to develop our bespoke Global Portal platform which enables our teams to interface with tax clients more efficiently and at their leisure.
ZM: How do you see Blockchain and the Metaverse being used for audit purposes over the next few years? What frameworks do you think are needed to make this a reality?
PK: We continue to see an evolution towards blockchain technology to the benefit of audit. There are several potential benefits, such as the fact that blockchains are inherently resistant to modification of any stored data. Fully automated audits may at one point become a reality, but are at present still susceptible to various technology risks. Before that step can be taken, requirements for new procedures will need to be implemented, to address the risks associated with the blockchain environment, where IT controls will gain a pivotal role in ensuring that financial statements are free from material mismanagement.
ZM: What new initiatives are you planning to roll out in 2023 to streamline operations and increase business referral and lead generation across your organisation?
PK: To best support our clients, we will continue to build a strong and robust organisation and we will focus on a number of truly global strategies, indispensable when supporting our clients in their own transformation journeys. We will focus on Audit, Tax and Advisory but, just as importantly on Risk & Quality, Technology, Sustainability and Talent. We are also investing in the development of a number of International Business Areas, where our firms will work as one to support our larger international clients and to attract more of this size of business to BDO.
ZM: What have you learnt from your own approach to risk management over the past 12 months post-pandemic? What have you done to prepare yourself in terms of business continuity planning, cybersecurity conflicts and contingency and forecast planning?
PK: Cybercrime is here to stay. The question is not if an organisation will be attacked, but rather when that will happen. Internally, our specialised IT-teams have continued to spend a lot of time on providing in-depth awareness training to all our employees, even running spot tests. We have also increased our vigilance by investing in additional security. We have approached risk management from a global point of view so we can leverage our knowledge and talent around the world to be able to respond quickly to any challenges that present themselves. Externally, our specialised cyber teams advise our clients on how to implement a bespoke strategy, with a focus on detection and prevention, but also be able to respond quickly and effectively should an attack happen.