All right people, we're going to talk about something that's been bugging us all week – Deloitte's big hiring spree announcement. If you've already put the story right out of your mind, Deloitte Global CEO Jim Quigley announced earlier this week that they would be hiring 50,000 lucky men and women a year over the next five years. At least that's what we initially thought. The PR machine was in full force as Quigs was mentioned in several publications all over the world touting the hiring plans in addition to big revenue numbers that might – MIGHT! – put them ahead of newly branded PwC for the biggest of the Big 4. The problem is that the earliest report, from the Financial Times stated the following:
Deloitte Touche Tohmatsu, the global accounting firm, said on Monday that it would hire an average of 50,000 workers a year during the next five years as it revealed strong revenues. […] Deloitte employs 170,000 people worldwide and said on Monday that it expects to add 250,000 new workers during the next five years as it looks to expand its services and geographic reach.
There is no room for misinterpretation there. The FT reported that Deloitte will add 250k new people to its firm. Nowhere in that report did they take into account (or think to ask) how those people would be added or how attrition, layoffs and partner retirement would affect those numbers. It was simply stated, "Deloitte is more or less adding the city of Lexington, Kentucky to its workforce." Our friends at FINS did some digging on these numbers and thought to ask a few more questions:
That's almost 140 new hires a day. By 2015, the company expects to grow to 225,000 total employees from its current roster of 170,000, accounting for standard industry turnover, retirements and natural attrition. According to CEO Jim Quigley, Deloitte is hiring across all areas: consulting, tax, audit and financial advisory services. For FY 2011, Deloitte is looking to hire in all regions, but it expects growth in priority markets like China and India. Both recent graduates and experienced professionals will be targeted in the hiring bonanza. […] In a shaky economy — in any economy, for that matter — it would perhaps seem foolhardy to add so many new hires. But, the firm has had a "successful year despite challenging economic conditions," Quigley said. "Deloitte's member firms have experienced growth, even double digit growth in certain markets, so we feel well-positioned to continue this trend in FY11."
Okay, so whether the FT was credulous or just plain didn't think to ask any follow up questions is unknown but we are still hella-skeptical about Deloitte's math here. They're still claiming that they will add 55,000 global employees in five years. The problem is, you didn't bother telling anyone exactly how you plan to do that, other than the boilerplate CEO statements offered up. Just for the sake of argument, say the firm does add the NET 55k warm bodies that it claims. It's pretty obvious that not many of these jobs are coming to the United States. Plus, this won't be purely organic growth. Looking at Deloitte's press release, it's pretty obvious that consulting is the only practice growing and BRIC and emerging markets are the only regions where the firm is seeing meaningful growth:
Geographic results (aggregate, in USD): • Asia Pacific revenues grew 9 percent, making it the fastest-growing region for the sixth consecutive year. Member firms achieving growth in excess of 20 percent included Korea and India. Deloitte China grew 8 percent. Market share of the Fortune Global 500 grew by 2 percentage points in the Asia Pacific region. Deloitte member firms also served some of the largest IPOs in these markets. • The Americas revenues grew 4 percent. Brazil grew in excess of 20 percent. Deloitte United States grew 3 percent. • EMEA revenues declined 3 percent. Southern Africa grew 22 percent. The Middle East grew 15 percent. Business and industry results (aggregate, in USD): • Audit revenue declined 1 percent while market share of the Fortune Global 500 grew by 1 percentage point. • Consulting revenue grew 15 percent. • Financial Advisory revenue declined 2 percent. • Tax revenue declined 5 percent. • Industry: Public sector revenues increased 38 percent compared to the prior year. Financial Services and Manufacturing were essentially flat, which represents a significant rebound from last year's double-digit declines.
As far as the "public sector," everyone is aware that these were boosted by last year's acquisition of BearingPoint, so after that plateaus, then what? And speaking of acquisitions – something that Barry Salzberg has gone on record about – this could be part of the headcount boom equation but that's still makes for funny math. But increase your people by nearly a third organically? We're not buying it, Deloitte. Not that you were selling it but you certainly got a lot of panties to drop with some hot rhetoric. Will they make the numbers? Who knows but there are at least three other firms out there that will be fighting you to the death for the business that will finance that growth. Good luck with that.