By Adonis Adoni | Photo by TASPHO | Gold Magazine | Aug 2023
In an exclusive interview at Gold Magazine, George Themistocleous, Managing Partner and CEO of RSM Cyprus, discusses the reasons behind the firm’s impressive growth and ways of dealing with tempestuous macroeconomic headwinds, all the while offering a glimpse of his vision of the firm’s future.
Despite soaring temperatures and weather alerts, George Themistocleous, Managing Partner and CEO of RSM Cyprus, decided that he would brave the elements and talk to GOLD in the air-conditioned spaces of IMH’s Nicosia offices.
He duly arrived to explain how his firm, which is part of the sixth-largest global assurance, tax and consulting network, had established itself on the island just five years ago. Since 2018, it has demonstrated a remarkable 200% growth in both revenues and human capital. “What has allowed us to perform on that level is a deep understanding of our clients,” says Themistocleous, echoing the firm’s resolute motto “The Power of Being Understood,” which embodies an unwavering commitment to place its clients’ needs and desires at the very heart of its operations.
Nonetheless, the firm does not exist in a vacuum and market conditions have exerted a formidable influence on RSM’s growth trajectory. Particularly beneficial has been the buoyant influx of multinational corporations to Cyprus in recent years. In October 2022, the Civil Registry and Migration Department announced that an astounding 9,090 applications for relocation from international companies had flooded its systems – by the time of the announcement, the Department had already processed 97% of them. This surge in interest was largely attributed to the Government’s new strategy, unveiled in January 2022, aimed at luring foreign capital to Cyprus, which streamlined the establishment of corporate entities through the setting up of the Business Facilitation Unit and simplified the process of granting work permits, among other things. According to Themistocleous, the success of the strategy paved the way for the introduction of new services that catered to the specific needs of multinational companies. Perceiving the advantages of outsourcing their accounting and HR operations, these companies sought the expertise of independent entities to navigate the dynamic market landscape while adapting to evolving trends. “For us, it was very clear that we needed to create a payroll service department,” he says.
Meanwhile, in the aftermath of the pandemic induced global upheaval, the world was witnessing a relatively restricted level of M&A activity which, in turn, signaled a rise in restructurings and insolvencies – a tried and true pattern within the industry. In this context, RSM Cyprus, ever responsive to evolving global dynamics, took a strategic leap to introduce insolvency services. Given the growing importance of ESG advisory and reporting, galvanised by numerous regulations at an EU level, Themistocleous says that the firm will soon be announcing an additional service line in this pivotal area.
Speaking of macroeconomic forces, current inflationary pressures have had an inevitable impact on the industry – and the firm. In fact, a dual effect has been observed: there has been an upsurge in companies seeking expert counsel to navigate the complexities of inflation’s ripple effect while at the same time, constrained growth has cast a shadow over the market, limiting potential avenues for growth. Themistocleous acknowledges the significance of providing support to clients during these trying times and notes how, during these crucial moments, the firm’s expertise and client-centric approach have proven to be invaluable assets. However, he also recognizes that the prevailing environment poses formidable challenges, leaving limited scope for manoeuvre, and that, ultimately, certain circumstances are beyond anyone’s control. “Something that we also have to take into account in Cyprus,” he goes on to say, “is the need to further diversify our portfolio and tap into other markets, offering new services. I believe that we have excellent opportunities to attract good businesses, not only from Europe but also from the US and Asia.”
As the intricacies of economic stability take centre stage, Themistocleous supports a widely accepted argument, urging the local economy to liberate itself from overreliance on traditional sectors like services, tourism and real estate. By doing so, he emphasises, Cyprus can fortify its resilience, creating a buffer against any crises that may be looming on the horizon. This strategic shift towards economic diversity has gained momentum, with the tech sector emerging as a promising new pillar of economic activity, contributing a noteworthy 13% to the island’s GDP. Themistocleous passionately advocates extending the government support provided to the tech industry to another often-overlooked sector – agriculture.
Despite Cyprus’ long history of wine production, dating back to ancient times, with the island home to many indigenous grape varieties (Xinesteri, Maratheftiko) and its famed Commandaria dessert wine, wine exports are still negligible compared to domestic sales.
“We need to invest in educating people more about the benefits of this industry and provide the necessary assistance to winemakers and farmers to grow their businesses. Besides, agriculture is one of the few industries in Cyprus that can produce raw materials,” he says.
Going back to the sweeping tides of transformative change across the professional services sector, technology stands as the fulcrum of progress. As RSM Cyprus found itself catering to an expanding roster of clients, embracing the power of data analytics and artificial intelligence tools, among other technologies, has become essential to sustain the delivery of top-tier services. However, Themistocleous argues, adopting technologies without reskilling and hiring dedicated professionals is akin to herding cats. Indicatively, the firm has dedicated considerable resources to training its personnel to deftly wield the technology tools, from data analytics – to harness insights from the vast troves of data produced by an ever-expanding, multinational client roster – to artificial intelligence. Concomitant with the imperatives of technological adoption, the industry finds itself navigating a shift in employee demand and preferences, which have led to shortages in financial, professional and business skills.
RSM Cyprus has not been immune to this but its strategy to deal with the talent scarcity has included forging alliances with esteemed local universities such as the University of Cyprus, the Cyprus University of Technology, Neapolis University Pafos, UCLan Cyprus and others. The intent is to lure talented students into professional services before the voracious (and highly lucrative) maws of other industries (most likely tech, nowadays) consume them. “Also,” he says, “the way we set ourselves apart from the market is by focusing on working conditions. Our way of thinking is to have a culture that is approachable, open and aligned with our strategy.”
In pursuit of this, RSM Cyprus has adopted an open-door policy that discards traditional rigid hierarchy in favour of informal efficiency. Also, in an industry where burning the midnight oil can spark existential crises, the firm actively tries to discover means to reduce the extra workload without sacrificing quality. These methods range from increasing the time for performing interim audits (always in agreement with the client) to judiciously rejecting new clients if it means stretching its human capital resources too thin. The positive responses from several engagement surveys suggest that the staff have espoused the firm’s culture.
“Our vision, is to remain one of the leading firms in Cyprus. Our clients have given us confidence that we are on the right track, and we will continue to train and develop our people, who are the core of our success. Our promise is that we will continue to listen to them, adjusting our internal policies and procedures to continue offering a better working environment, making it easier to perform at the level we require.”