Deloitte, the professional services firm, will no longer offer working contracts to second-year University commerce undergraduates, shunning a long-accepted practice in the local financial services industry, chief executive officer Paul Mercieca told The Sunday Times.

The “phenomenal” growth of Malta’s financial services sector has resulted in an acute demand for talent: over the past few years, firms have scrambled to offer working contracts to students in an effort to snap them up as early as possible. Contracts often encompass summer placements, training and a post within the firm at the end of students’ studies.

But Mr Mercieca has long been dissatisfied with the practice.

“I hate having to offer these students contracts so early in their career,” he explained. “We have been driven to do it partly because of the competition.

“Asking these students to make a career choice so early – at the age of just 19 or 20 – is not ideal. They do not even know whether they will join the accountancy stream at that point. If their grades are good enough they join in their third year.

“All the firms are bombarding students with literature at events and inviting them to their offices to sign them up. The students then sign contracts with three or four different firms and inevitably end up breaching them. The contract becomes worthless: What are we to do? Take a student to court?”

Since last October, Deloitte has sought to sign up third-year students by offering them strictly binding contracts that will see them become part of the firm almost immediately. Essentially, the contracts will be the same as in previous years.

Students signing up to Deloitte’s Pathway programme will have work assignments, relevant work experience and exposure which would help them in their studies. Apart from receiving remuneration and allowances, the students would also be supported in their studies and trained by Deloitte professionals.

Mr Mercieca admitted the firm was running a risk of being beaten to the post by the competition but he believed it was the “correct” route to take.

Deloitte is confident students will be attracted to work for the firm thanks to the brand’s repute and international standing.

The local financial services industry has traditionally targeted talent emerging from the University and the Malta Institute of Accountants and ACCA programmes. On average 65 students graduate from the university every year and 55 from the ACCA programme – but the larger firms require scores of people.

As the sector blooms, so do the firms: Deloitte alone has doubled in size in the past five years from revenues of €7.3 million in 2006 to €15.3 million last year. Its staff headcount now stands at 220 and Mr Mercieca anticipates the firm will require an additional 100 staff by 2016.

Mr Mercieca said the sector’s growth began to take such a toll on local supply some firms have had to look overseas in recent years. Deloitte’s own staff includes 23 expatriates from seven countries.

“We cannot rely solely on domestic demand,” Mr Mercieca pointed out. “The largest limiting factor to our growth is the scarcity of suitably qualified employees. The demand has far outstripped supply: we have to resort to foreign recruitment. Local and international agencies are continuously feeding us with CVs. This is a new phenomenon, totally unheard of five or six years ago.”

Many of the latest recruits hail from the Philippines, where part of a growing talent pool of mostly US-trained professionals is keen to move to Europe. Some are particularly attracted to Malta by the country’s Catholic culture.

Mr Mercieca said local firms’ recruitment prospects in western Europe were bleak as the salaries commanded by continental professionals were prohibitive by Maltese standards. Attempts to lure professionals caught up in Ireland’s crisis mostly failed as job-seekers preferred to wait for opportunities to relocate to higher-paying jurisdictions.

The challenges faced by the industry with so many players – including the igaming sector, fund managers, insurance managers and the local business community – were also exerting pressure on Maltese salaries. It was good news for graduates: Mr Mercieca said salaries offered to new entrants to the sector have risen by 38 per cent in the past five years.

The increase, in turn, was reflected in the fees charged by the firms, he added.

“Our decision may be perceived to be contradictory,” Mr Mercieca said. “We would like to see all the firms take a step back to find ways to deal with this situation. I am sure the University would support this.

“As an industry we are instilling a culture that encourages young people to breach a contract. It is wrong. Especially when you take into account the type of people we are trying to recruit. We should not allow the pressures of demand to overtake common sense.”

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