July 23, 2018

Are Big 4 Firms Getting Stingy?

The benefits to working for a Big 4 firm can be embarrassing sometimes. It’s just not things like weeks of PTO that you’ll never use or pet insurance, but also the day-to-day perks that come along with carrying the water for a behemoth professional services firm.

The benefits to working for a Big 4 firm can be embarrassing sometimes. It's just not things like weeks of PTO that you'll never use or pet insurance, but also the day-to-day perks that come along with carrying the water for a behemoth professional services firm. Fancy phones, corporate cards with generous rewards, discounts on pretty much everything, tons of SWAG etc. etc. It's fun for awhile, but the luster fades pretty quickly and then you start taking these things for granted, as humans are wont to do.

For example, when I started at KPMG many moons ago, I remember the firm matched our 401(k) contributions dollar for dollar. It was a great perk! Very generous. And then a few years later when it appeared that the economy was headed for a fiery crash landing, the firm cut the match to 25 cents1 for every dollar contributed and people were mad. Really mad. The thing is, a 25% match is still pretty good! Nevertheless, it was a sign that the firm was reining in some of its spending. Funny thing, not long after the firm cut the match, they really started getting cost-conscious and me and a few hundred of my closest colleagues were let go. Ahh, those were good times. 

I only mention it now because we've received a few interesting anonymous tips over the last week or so. For starters, a couple of messages about penny pinching at EY. Here's one we received last week:

EY is pulling platinum AMEX privileges for people who travel more than 100 nights a year, they are also upping the minimum to 120 nights for any benefits.

And another from earlier today:

EY just lowered their telecommunications/mobile plan reimbursement to $60 per month for all levels citing that they have "researched this" and it seems reasonable.

Now this might be nothing, but it's worth remembering that EY had a disappointing year. I mean, it was fine, all their business lines grew (except for assurance), but Mark Weinberger cited  "The continuing global economic slowdown," according to the Wall Street Journal as a culprit in the slower growth. Even PwC felt the pain in its business this year. Bob Moritz told the Journal that "economic uncertainty and efforts by the firm’s clients to hold down their expenses" were a factor. It's not much of a stretch to wonder if that means PwC will be cutting expenses, too.

The other rumor we've heard is that KPMG, whose fiscal year wrapped on September 30th, had a very disappointing year. The firm usually doesn't report its revenue results until December, so we'll refrain on commenting until we hear something more definitive, but layoff rumors are floating around. Again, nothing definitive at this point.

More broadly, we'd be interested to hear if the rumors of EY go beyond just AMEX privileges and mobile reimbursements. Are Big 4 firms cutting costs elsewhere? Are your teams being told to keep the expenses in check? Discuss in the comments and email us if you have more information.

1 That's to the best of my recollection, folks. If someone from the late 2000s remembers it better, corret me over email.

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Face It People, Nothing Much Can Be Done About the Revolving Door

Revolving_Door2.jpgThere’s constant conspiracy theories bellyaching about certain companies getting their former big shots into public service and regulatory positions (we’re talking about you, Maxine Waters).
Well now there’s speculation about former Big 4 partners working at the IASB.
We get it, those who used to work at the big firms shouldn’t be writing the rules. So who the hell is going to do it? Shall we have the likes of Friehling & Horowitz appointed as the standard setters?
The large firms have the biggest pool to choose out of, so natch they’re going to have some of the better candidates to delve into this wonky rule-writing stuff. We’re probably lucky that there are people out there that actually want to serve on these boards, lots of Big 4 partners can barely turn on their computers.

SHOCKER: Number of Fraud Cases in the Courts is High

In probably the most shocking news of the day, KPMG’s “fraud barometer” reports that the number of fraud cases in UK courts in the first six months of the year are the highest since the firm started issuing the report, 21 years ago.
Here in the states, the big sexy fraud gets all the attention but there is plenty of small fraud to go around. Plus, the bright side is, we’ve haven’t seen anything yet:

“These figures are bad, but the worst is yet to come,” Hitesh Patel, a partner at KPMG, said. “It will be a number of years before the impact of the recession fully feeds through into the fraud statistics.”

So our advice would be for any of you that are nervous about layoffs, look into getting transferred to the forensic accounting practice. You won’t be out of work any time soon.
Record total of fraud cases in court – and worse to come [FT.com]