[Updated on July 31 with additional information.]
And we don’t know much at this point. We’ve seen and been told different things about what was said during a webcast on Thursday morning regarding raises at KPMG. But the one thing we do know is that KPMG is following in line with what the other Big 4 firms are doing.
According to a couple of sources, only those getting a promotion at KPMG will be getting a raise, which is what is happening too at PwC, EY, and (we think) Deloitte. And from the sounds of it, no bonuses this year either. So KPMGers who are in a non-promotion year are getting doubly screwed, it seems.
If anyone else can let us know what other comp decisions have been made at KPMG, we’d appreciate it. Get in touch with us using the contact info below. Thx.
[UPDATE] The reason compensation was brought up during yesterday’s webcast was because new CEO Paul Knopp and new COO Laura Newinski addressed a listener’s question, according to a source who works in audit:
Overall, Paul and Laura went with the Company line that base compensation is driven largely by market forces (i.e. we’re going to do what everyone else is doing). Commentary was also provided that even the steady state business (i.e. audit) is seeing pricing pressure from our clients. They also mentioned that we’re seeing less employee attrition than planned (which should surprise no one given unemployment numbers and a 32.9%).
Personally, none of this comes as a surprise to me. Anyone who thought they’d be getting a raise this year has had their head in the sand (every comp discussion starts with the line that we’re just paying competitive to the other Big 4). If the other 3 firms are not giving raises, it would be painfully obvious Uncle Peat is not handing out raises as well.
In previous webcasts during the pandemic led by former CEO Lynne Doughtie, she reiterated to employees that layoffs at KPMG “would be a last resort.” However we were told by another source that the new regime at KPMG didn’t take that tone during Thursday’s webcast:
Ms. Newinski was stating that the economy is driving pressures resulting in a fluid environment which posses operating challenges. She continued with the head count Firm-wide is above where it should be. Meaning KPMG projects a certain amount of attrition when calculating labor costs for the year (just like any company, right?) With the economy tanking, people are not leaving KPMG as expected though. In turn, she was pointedly asked the question, are you planning layoffs — as KPMG has been holding out on letting people go? Ms. Newinski’s response was, “I’m not here to talk about layoffs.”
Hmm. That could be taken different ways but it is a change from the previous and consistent company line of “a RIF is not in our plans”.
The KPMGer in audit believes the reason why people aren’t leaving the House of Klynveld is because there are very few companies hiring right now, so employees are staying put out of necessity:
As a result, we will likely have a spike in audit hours and inefficiencies as the people who are just here for selfish reasons do the bare minimum to scrape by (until layoffs come round) and the high performers will get overloaded picking up the slack from everyone else. Ultimately, it will lead to a mass exodus in about 2 years when the world gets back to normal.
And this most recent webcast comes on the heels of KPMG announcing that it was cutting all pension and 401(k) contributions by half.
We’ll continue to update this article as we get more information.
Related article:
KPMG US Update: Partners Taking Pay Cut, No Variable Compensation, No Omaha Steaks
