The findings of a report commissioned by EY are arguably another blow to the business models and profitability of the Big Four accounting and consulting firms. Photo / Jaap Arriens, NurPhoto via Getty Images
The findings of a report commissioned by EY are arguably another blow to the business models and profitability of the Big Four accounting and consulting firms. Photo / Jaap Arriens, NurPhoto via Getty Images
OPINION
For students of accounting, business or IT, a position in one of the Big Four accounting and consulting firms was once considered a plum job, a chance to join a highly-respected organisation offering an interesting and well-paid career path.
But potential recruits - and the wider public - havelearned the reality is often very different, following revelations of a toxic workplace culture at EY.
The findings of a report commissioned by EY, after the suicide of a staffer last year at its Sydney office, are another blow to the business models and profitability of the Big Four accounting and consulting firms.
The report revealed widespread racism and sexual harassment and a culture of bullying and overwork. It comes on the heels of the tax scandal at PwC.
The EY report found staff feel overworked, bullied and harassed by partners and senior management and are too scared to report bad behaviour by their superiors for fear it might set back their careers.
Graduates will be reassessing whether they want to sign up to a job at any of the Big Four and potentially be overworked, bullied and harassed. Why would anyone aspire to tell their friends and family they work for EY or PwC or any of the other accounting giants? Such a proclamation would be more likely met with derision than congratulations.
These firms will no longer have their pick of the best and brightest graduates and face a huge task winning back the trust and respect of the public..
The big accounting firms are already reeling from revelations PwC misused confidential information it acquired when advising the government on how to design tax laws that would ensure multinational tech giants paid a fair amount of tax in Australia.
PwC used that information to advise tech giant clients on how to get around the new tax laws before they were introduced.
The reaction from the government has been swift. PwC is essentially a pariah among Australian governments and many corporates and has lost a huge number of lucrative contracts.
PwC has tried to save itself by splitting in two - an audit business and a separate government consulting business that won’t take any commercial clients. The others might come under similar pressure to split if they can’t reassure the governments around Australia they will manage any conflicts of interest with commercial clients.
The federal government is already starting to turn off the tap of lucrative consulting work for the Big Four, bringing work back to the public service. The move taps into a broader concern within the government that public service expertise has been hollowed out and there’s been too much reliance on consultants.
The EY review found 11 per cent of personnel reported routinely working more than 61 hours a week, a situation blamed on a business model focused on “profit and delivery over people” and almost one in three employees reported working more than 51 hours a week regularly.
An EY report last week found staff felt overworked, bullied and harassed by partners and senior management. Photo / 123RF
Close to half of staff said their health had suffered because of the long hours and 40 per cent had considered quitting because of the hours.
Most damning perhaps is the finding that the impact of long working hours is not being experienced equally.
“Partners and associate partners, for example, are those who are working some of the longest hours yet not feeling overly negatively affected as they feel like they have sufficient agency and reward to manage those hours,” the report states.
“Others, such as senior managers, are working long hours and feeling like they don’t have sufficient control or reward.”
The report made 27 recommendations to improve the firm’s workplace, including reducing overwork and excessive hours through more accurate project scoping, resourcing and costing; increasing accountability for staff retention by charging the costs of excessive turnover to service lines; and revising key performance metrics to emphasise the importance of diversity and inclusion
In one regard, things could improve for EY in the wake of the report. If it can address racism, sexual harassment and bullying it will make for a happier and more productive workplace and result in better staff retention.
But solving the problem of overwork is more problematic.
The reality is these firms rely on salaried staff working punishing hours into the night and on weekends to make their handsome profits on projects for clients. If staff start to work more regular hours, the entire business models of the accounting firms are at risk.
These firms have long relied on the unspoken understanding among staff that if they wanted to win promotions, they needed to work punishing hours and not complain.
The firms will need to allocate more staff to projects, eating into profit margins and partners’ pay packets.
Like so many other businesses that have put profits ahead of principles and people, the Big Four will only have themselves to blame.
