By Lee Su Shyan , Assistant Money Editor

THE overall economic picture for this year - hardly the disaster that many had feared - was mirrored fairly closely in the fortunes of many companies, including those in the accountancy industry.

As the clouds started to clear in the latter part of the year, pay cuts instituted when things looked diabolical were reviewed, with pay being restored or at least partially restored to original levels at companies ranging from smaller outfits such as property consultancies to listed firms such as SIA Engineering.

The accounting industry was no different with Big Four firm KPMG restoring pay to original levels. The cuts mainly affected those at management level. All the lost pay has been paid back to staff.

But it is not just these more senior staff members who are ending this year on a high note. Others at KPMG have been handed shopping, dining and hotel as well as travel vouchers.

This was to 'recognise the loyalty of all staff for helping stay the course during the downturn', said KPMG's managing partner, Mr Danny Teoh.

Ms Ong Ying Ni, a senior associate with the firm, told The Straits Times: 'My colleagues and I were all surprised that the management would take this step to reward us. We definitely did not expect this. Given the past year where there had been a lot of uncertainty, this move has given us more confidence and reassurance about the prospects for the firm as well as the industry.'

While junior staff received shopping and dining vouchers, senior managers even received cash vouchers which can be used when purchasing airline tickets.

KPMG employs more than 2,000 staff in Singapore.

Mr Teoh said that being a 'professional services firm, people are our greatest asset. It is therefore important to take the long- term view to recruiting, motivating and retaining our staff'.

The Big Four accounting firms are no different from those in other sectors which have had to act nimbly amid the improving jobs market.

KPMG, for example, will grant pay rises next month - over and above the annual pay review which takes place in the middle of the year.

Mr Teoh said: 'This one-off pay revision... represents a continuing investment in our future.

'It seeks to balance the need to manage shorter-term uncertainty with the need to attract and retain experienced and qualified staff for the longer term.'

Come next month, another Big Four firm will also be giving a boost to morale. PricewaterhouseCoopers (PwC) will give a special half-month's bonus to all staff.

Human capital partner Deborah Ong said the payout is 'in recognition of their contributions to the firm through what has been a challenging time for most'.

The improving jobs market has put employers in a difficult position.

Ms Ong said: 'As the economy recovers, it is important that as a firm, we respond to the positive market sentiment and explore ways on how we can reward our people through increases in monthly salaries or variable bonuses.'

The other two Big Four firms - Ernst & Young and Deloitte & Touche - told The Straits Times that they are not planning any special payments.

However, they pointed out that they had not instituted any pay cuts this year.

Both Ernst & Young and Deloitte & Touche said that they had continued to award increments and bonuses to deserving staff during the annual review.

Ernst & You-ng added that it is the only Big Four firm that continues to give staff time off in lieu, known by its quirky acronym Toil.

It has been a long-standing tradition that staff get time off, for example for the extra hours they put in during the peak season in the early part of every year, where companies which have a Dec 31 year-end rush to get their financial statements ready.

Still, while staff face the New Year in a more upbeat mood, the Big Four firms still face difficulties.

On the one hand, even though the recession is over, many companies are still struggling and may not be able to cope with higher audit fees.

On the other hand, with the better jobs market, the Big Four firms are having to make sure that they reward staff to retain them, especially with the upcoming busy audit season looming.

As a result, the Big Four firms will continue to see their profit margins squeezed.

An audit partner with a Big Four firm noted that the critical issue for accountancy firms is how to ensure that there is a steady supply of experienced accountants for future growth.

This article was first published in The Straits Times.