Continuing education of audit professionalsStaff turnover
In 2015/2016 our Assurance Service Line welcomed 589 new employees; 229 women and 360 men.
As of 30 June 2016, our firm had 2,524 employees on a full-time basis (2,243 on 30 June 2015). Of these employees 1,903 FTE worked for our Assurance Service Line (1,630 FTE on 30 June 2015). We had 146 FTE partners (138 on 30 June 2015). Of these partners, 103 worked for our Assurance Service Line (100 on 30 June 2015). Fifty-five executive directors worked for our Assurance Service Line (59 on 30 June 2015). The absenteeism rate was 3.0%. In addition, parental leave amounted to 3.4%. Staff turnover at our firm was 20% (previous fiscal year 19%); in the Assurance Service Line it was 19% (previous fiscal year 19%).
|Employees who left our Assurance Service Line in 2015/2016||Women||%||Men||%|
|0-3 year experience||52||21.7%||90||19.6%|
|4-6 year experience||25||22.5%||43||19.5%|
|6 year and more experience||26||14.4%||75||16.4%|
|Employees that left our assurance service line in 2015/2016||Women||%||Men||%|
|Above average last rating||19||11.4%||52||12.1%|
|Average last rating||54||17.1%||91||16.4%|
|Below average last rating||30||58.8%||65||41.9%|
The EY career development framework, EYU, provides our people with opportunities for the right experiences, learning and coaching to help them grow and achieve their potential.
The learning component of EYU is based on an extensive and globally consistent learning curriculum that helps all our people develop the right technical and personal leadership skills, wherever they are located around the world. Core audit training courses are supplemented by learning programs that are developed in response to changes in accounting and reporting standards, independence and professional standards, and emerging practice issues.
We are redesigning our core audit training into “The Audit Academy” — a curriculum for learning. This high-impact learning combines interactive classroom-based simulations, “on-demand” e-learning modules and relevant reinforcement and application support.
Where EY audits and reviews International Financial Reporting Standards (IFRS) financial statements, relevant team members undertake learning to become IFRS accredited.
We require our audit professionals to obtain at least 20 hours of continuing professional education each year and at least 120 hours over a three-year period. Of these hours, 40% [(at least 8 hours each year and 48 hours over a three-year period) must cover technical subjects related to accounting and auditing.
In addition to formal learning, professional development occurs through coaching and experiences our professionals receive on the job. Coaching helps to transform knowledge and experience into practice.
We have developed a coaching program for new hires. Over the next two years, new hires will work in four to six-member Development & Learning Teams (DLTs) under a coach’s guidance. Coaches attend a special training program which includes coaching skills self-assessment, coach training and peer feedback. The DLTs are based on the premise that participants can learn from each other, i.e. engage in peer learning. The coach guides this mutual learning process. These programs will help strengthen the coaching culture at the levels of both new hires and experienced staff.
Experienced professionals are expected to coach and develop less experienced personnel to create a continual learning environment. We also manage the assignment of our people to particular engagements in a systematic way that helps to ensure they have exposure to a range of experiences as part of their own development.
During fiscal year 2015/2016, our firm’s professionals spent 301,000 learning hours as compared to 245,000 in fiscal year 2014/2015.
Those hours include staff and senior staff external training hours (144,000) to become auditor, on average one day a week per year. All our professionals met the learning effort requirements regarding continuing professional education (Permanente Educatie, PE), professional skepticism and – where applicable - IFRS and/or US GAAP & US GAAS.
To service the public interest at the highest quality standard, our professionals are not only continuously trained in their application of professional skepticism but also in skills that help them maintain high-quality relationships with stakeholders whilst meeting public interest expectations in communication regarding the audit. This requires multiple competencies that are part of our learning programs.
We established EY University as part of our Personal Career Design campaign. This learning program is based on our World Class Learning principles. Our financial experts participate in the core curriculum which includes auditing, accounting, IT, sustainability and fraud investigations. Next year we will have two cohorts at EY University.
We have invested in data analytics learning as part of our investments in innovating our high-quality audits to increase client value. Data analytics is integrated in our Audit Academy curriculum. On top of this curriculum, we have developed a specific traineeship for staff to further specialize in data analytics within EY University.
In June 2015 we launched EY Canvas, our new audit tool as part of Audit Transformation, with a training for all our personnel. Audit Transformation is about making the EY audit business more quality-conscious, agile, efficient and relevant so teams can deliver against their primary aim — to provide the highest-quality audits in the profession.
The program comprises four key initiatives: EY Atlas (new research tool), EY Canvas (new audit tool), EY Helix (new analytics suite) and the Private Middle Market (PMM).
In addition, we have trained partners serving listed entities in their communication at the Annual Shareholders’ Meetings of those entities.
We continue to train our graduates in the mandatory NBA topic of “professional skepticism” and are convinced that our professionals will benefit from this training, and, most importantly, that it will promote the application of professional skepticism during our audits.
The hours invested in learning can be summarized as follows. Detailed information is presented on the next page.
|Hours by rank (000)||2015/ 2016||%||2014/ 2015||%|
|Partners and executive directors||10||3%||11||4%|
|Senior managers and managers||34||11%||31||13%|
Quality and relevance of our work, i.e. meeting internal and external quality standards when serving the public interest, are the cornerstones of mandatory learning, which is partly based on the ranks and roles of professionals. Below is a high-level overview of mandatory training programs (for details see the table on the next page):
- Induction training for new hires, Audit Academy for staff, senior staff and managers, professional skepticism for graduates;
- Summer courses for our executives covering recent developments and new standards and policies; public interest learning; executive academies and same-time updates;
- All executives (managers, senior managers, directors and partners) had to take the annual ISA test (Kennistoets) with numerous questions testing participants’ knowledge of our audit methodology and audit standards;
- IFRS and PCAOB (role based).
The executive learning event in August and September 2015 included technical trainings on our new Global Audit Methodology (topic based GAM), standardization, data-analytics and local content, but also workshops on leadership, highest performing teams and feedback.
In December, we rolled out our local learning program. The objective of local learning is to integrate learning with peer coaching and experience in small learning teams.
We train all our personnel to have adequate and sufficient knowledge of our methodology (topic-based GAM) and update each executive on the relevant changes in GAM and our electronic audit file.
EY has a system of accreditation for specific procedures and clients. Executives who work for US SEC clients and / or IFRS audit clients need to have a personal accreditation based on training and/or experience hours.
At least once a year we monitor executives’ compliance with their mandatory training requirements. During fiscal year 2015/2016, all professionals have complied with their Continuing Education (permanente educatie, PE) obligations. If partners and executive directors exceed this PE requirement, by attending additional training, this is taken into account when their quality ratings are established.
|Core technical education – number of participants 2015/2016||Introduction||Summer courses, Executive Events||Canvas Launch Events||Engagement Economics & Pricing||Independence||Wwft||NBA knowledge test||IFRS||PCAOB|
|Partners and executive directors||-||151||119||74||153||159||139||75||42|
|Senior managers and managers||-||279||294||226||402||394||229||163||92|
|Hours per program||80||16-32||9||4||1.5||2||2||8-16||0.5-7|
|Core technical education – number of participants 2014/2015||Introduction||Summer courses, Executive Events||Public Interest (Zeg wat je ziet)||Zeg wat je ziet (team and client)||Independence||ViO||ISA test||Dossier-mentoring||IFRS||PCAOB|
|Partners and executive directors||-||162||138||143||157||149||143||115||101||46|
|Senior managers and managers||-||297||278||248||364||356||224||5||180||103|
|Hours per training||80||16-36||2-8||4||1.5||1.5||2||4||28-32||0.5-4|
Knowledge and internal communications
In addition to professional development and performance management, we understand the importance of providing client engagement teams with up-to-date information to help them perform their professional responsibilities. EY makes significant investments in knowledge and communication networks to enable the rapid dissemination of information to help people collaborate and share best practices. Examples include:
- Global Accounting and Auditing Information Tool (GAAIT), which includes local and international accounting and auditing standards as well as interpretive guidance
- Publications such as International GAAP, IFRS developments and illustrative financial statements
- Global Accounting and Auditing News, a weekly update covering assurance and independence policies, developments from standard setters and regulators as well as internal commentary thereon
- Point of view and Overviews, which provide important perspectives on current public policy and regulatory developments
- Practice alerts and webcasts covering a range of global and country-specific matters designed for continuous improvement in the member firms’ Assurance practices
A comprehensive performance management process requires our people to set goals, have clear work expectations, receive feedback and talk about their performance. The Performance Management and Development Process (PMDP) is designed to help our people grow and succeed in their careers.
Under the PMDP, periodic job performance reviews are combined with annual self-appraisal and reviews. As part of the annual review process, each professional, in conjunction with his or her counselor (an assigned, more experienced professional), identifies opportunities for further development. Professionals and their counselors are guided by a set of expectations that articulate the knowledge, skills and behaviors that should be maintained and developed for their respective ranks. These expectations are derived from, and align with, EY’s global strategy and values.
Measuring the engagement of our professionals: the Global People Survey
The EY Global People Survey is a powerful strategic tool for assessing the effectiveness of our strategy and maximizing the potential of the organization through our people. It is used to (1) measure the engagement levels of our people, (2) identify potential problems within the business, (3) evaluate the effectiveness of high-priority programs and initiatives, (4) make appropriate adjustments to align operations with our purpose, ambition and strategy, and (5) identify those elements that impact critically important business outcomes.
The Global People Pulse Survey is a shorter version of the Global People Survey which is held every two years. The People Pulse covers only around 25% of the questions and is held in the years between the Global People Survey. The Global People Pulse Survey was held during the first half of 2016. In total 1,900 people of the Assurance Service Line in the Netherlands were invited to participate and more than 1,500 responded. This 80% response rate was the highest in years (2014: 68%, 2015: 78%).
In the Global People Pulse survey, “engagement” is a combination of perceptions that can have a positive impact on work behavior. These perceptions include satisfaction with the organization, pride, commitment and a willingness to recommend the organization as a great place to work. When people are engaged they take more ownership of the work they do, make an extra effort when needed and strive for higher levels of performance.
Engagement tells us how our people feel about their experience at EY: the more positive their experience, the more engaged they are. When our people are more engaged, they put in more discretionary effort and can significantly impact some of our key business outcomes. Our “best in class”-groups outperform our groups with average or below average levels of engagement.
Our own research relating survey results to its business metrics supports these findings. Specifically, higher engagement levels at Ernst & Young Accountants LLP have been found to be significantly correlated to, amongst others, increased levels of retention and higher favorability ratings from clients. Furthermore, those groups within Ernst & Young Accountants LLP performing in the top quartile on engagement yield significantly more gains in these areas than those at average levels.
We received a high engagement score (79%) in the Netherlands. Although slightly lower than in 2015 (-1%), this score is still on the Best in Class benchmark. For the second year in a row, 88% of our people said that they are very proud to work for Ernst & Young Accountants LLP. Seventy-eight per cent prefer to stay with us even if a comparable job were available at another company and 79% would recommend Ernst & Young Accountants LLP as a great place to work. Needless to add we are very proud of these results.
Clients’ assessment of our service quality
To create a consistent, positive client experience that differentiates us from the competition, we are eager to develop a deeper understanding of clients’ expectations and we strive to deliver exceptional service in all our client interactions. To this end, we use our Assessment of Service Quality (ASQ) program, which is an integral part of our Account Management Framework and a powerful means of measuring clients’ expectations and satisfaction. In addition, the ASQ is a strong relationship tool allowing us to gain a better understanding of our clients’ sentiments towards us and to strengthen our relationships with them.
During fiscal year 2015/2016, we conducted more than 200 interviews with clients as part of our ASQ program. In 45% of cases we were able to improve our relationship compared to the previous year, in 49% of cases relationships remained the same and in 6% the relationship lost some of its quality. Our strengths, according to our clients, are: understanding their business drivers, good relationships with our senior teams and a collaborative working style.