EY and Deloitte are currently evaluating staff workloads with increased scrutiny and are discreetly reducing their workforce, according to reports. This move is part of a broader strategy by the Big Four accounting firms to trim expenses in light of recent economic pressures.
The Times of London has disclosed that these firms are specifically examining employee engagement levels and reallocating resources by discontinuing the roles of staff deemed "underemployed."
Insiders have revealed to The Times that both EY and Deloitte are intensifying their review of employee workloads, with a particular focus on the allocation of time to client-related activities. These performance-based dismissals are distinct from broader layoffs, predominantly affecting the consultancy divisions of these organizations.
According to the report, the firms have been calculating "utilization rates" by analyzing timesheets and work schedules to assess the extent of employee involvement in client work. Employees actively engaged with clients are marked as "utilized," whereas those not assigned to client projects are considered "on the bench," indicating a lack of active engagement in revenue-generating activities.
The analysis of utilization rates also aims to identify employees who are not actively seeking involvement in significant, profitable projects. EY has responded to these findings by affirming the presence of its "well-established performance management processes," which consider a range of metrics, ensuring that utilization is never the sole criterion for performance assessment.
Deloitte has similarly stated that its performance evaluations are not designed as a mechanism for workforce reduction. The firm emphasizes its commitment to talent development and management, noting that while a small fraction of staff may depart following these assessments, the majority benefit from successful performance improvement initiatives.
The Big Four, including EY, Deloitte, PwC, and KPMG, have faced the necessity to reduce their workforce by several hundred positions over the last year, amidst challenging economic conditions. Deloitte has announced significant job cuts within its UK operations, spanning consulting, financial advisory, and risk advisory sectors.
EY has also made notable reductions in its UK workforce across various business segments, including advisory services. Industry analysts attribute these measures to a combination of factors, including overhiring during the COVID-19 pandemic and a subsequent decrease in attrition rates, leading to an oversaturated employee base amid diminished opportunities in the job market. Furthermore, a downturn in client demand has resulted in insufficient work for existing staff levels.
McKinsey & Company is similarly adjusting to the repercussions of its hiring surge during the pandemic, having recently issued 3,000 "concern" ratings in performance reviews. This initiative signals to the affected employees the urgency of improving performance within a three-month timeframe or facing the possibility of being advised to exit the firm, as reported by Bloomberg. This strategy underscores a trend among leading consulting and accounting firms to adapt their workforce strategies in response to evolving market dynamics and operational necessities.
