Accenture to pay Irish Google outsourcing staff living wage

12 October 2018 Consultancy.uk

Following mounting criticism in the court of public opinion, the Irish wing of global consulting firm Accenture has announced it will henceforth pay a living wage to its outsourced staff working on projects for Google. The consultancy had been scrutinised by the media for its treatment of staff involved in the project, including the compensation employees received for working nightshifts.

Dublin-registered consulting firm Accenture has crafted a close-knit relationship with technology giant Google in recent years. The firm is recognised as a keystone partner of the Google Cloud network, and earlier this year the two entities launched a new business group together. While this looks to continue into the future, however, a growing number of aspects of the relationship have been subjected to scrutiny in recent months. In particular, Google’s use of Accenture as an outsourcer in Ireland has been the subject of a number of headlines. 

Accenture came under fire for its pay and conditions offered to those working on projects for Google in Ireland. Stories in The Sunday Times had revealed low pay and stressful conditions among outsourced staff. According to those reports, many staff working on Google projects were paid €11.06 an hour, below the living wage of €11.70* that social justice researchers state is the minimum which workers require to have an acceptable standard of living. These staff were situated in the EastPoint business park, and while they were employed directly by Hays, a recruitment company, they were managed by Accenture.

Accenture to pay Irish Google outsourcing staff living wage

In the week leading on from the breaking of the story, Accenture initially handed staff an extra 5% for working late shifts, while all staff working night shifts were permitted to book taxis home through a company account. Previously a number of these employees had been made to pay upfront for cabs and wait weeks to be reimbursed. Following on from that, by April, sources at Accenture reported to the press that Accenture increased the minimum hourly rate for outsourced Google workers to €11.90 an hour. Talking to the Times, the sources suggested the decision to increase wages was a direct reaction to media coverage.

Accenture has since confirmed that it is indeed now paying the living wage to all outsourced staff working on projects for Google in Ireland. Alex Ross, media relations and corporate communications lead for Accenture in Europe, the Middle East and Africa stated, “I can confirm now that all our people in Ireland are paid above the living wage.”

Accenture said it “reviews compensation on an on-going basis and makes adjustments, as needed, as markets and business conditions change.” Elsewhere, Google said one of its criteria for suppliers was its code of conduct in providing “appropriate level of wages, benefits, and safe working conditions”. However, when asked by the press, the company declined to release details of a review it conducted into its outsourced workers’ pay and working conditions in Ireland.

Meanwhile, the relationship between Google and Accenture was subject to further scrutiny earlier in 2018. At the time, a complaint from Carlos Maciá, an outsourced worker in EastPoint business park, alleged that he was told not to use a Google helpline to report a worker he believed was harassing staff. Google promised to investigate, however Maciá told the UK broadsheet The Times that he has received no contact from Google since he went public with his story.

* The living wage at that time was €11.70, however in July 2018 that was set at €11.90 by researchers working for the Vincentian Partnership for Social Justice.

×

High employment drives deals to access fresh talent

09 April 2019 Consultancy.uk

The UK continues to have a historically low unemployment rate, resulting in a tightening employment market and demand for recruitment services. The industry topped £12.3 billion last year, while valuations continued to rachet up. There were were 32 firm acquisitions in the recruitment services space last year, up significantly on the previous five-year average.

Labour markets globally are tightening, particularly in developed economies. At the same time, access to top talent is becoming increasingly difficult to source, as demand for that talent continues to rise. Higher demand has been one of the key drivers for acquisitions in the space. New analysis of the recruitment M&A market, from consultancy firm BDO, looks at current trends and future projections for activity in the segment.

The UK employment rate has grown considerably over the past decade, with the number of NEET decreasing, more women joining the workforce, and older people continuing to work, among other trends. Participation rates hit more than 75% in 2018, up from around 73% in 2014. The unemployment rate dropped to 4.1% last year, the lowest level in more than 40 years.

UK Recruitment Market

 

The recruitment industry has enjoyed strong growth over the same period, with revenues increasing from around £8 billion in 2014 to £12.3 billion last year. However, the growth rate for the industry is expected to stall for the coming years – the firm is projecting annual growth of 0.1% to 2024. The stall reflects deep seated uncertainties stemming from the future of the UK, from migration to internal employment in an increasingly uncertain future.

According to the firm’s analysis of market trends for UK listed FTSE recruitment companies, their performance over 2018 outperformed the wider FTSE market by a significant market during some months – the end-of-year uncertainty hit both recruitment and non-recruitment firms with relatively equal strength. The drop partly reflects market sentiment about the future of the UK.

FTSE Listed Recruitment Firms Average EV/EBITDA Multiple

 

The study also considered the multiples growth, average EV/EBITDA multiples, over the past year – which has shown considerable ups and downs. The yearly average multiple of 10.4x was above that of 2017’s 9.9x – although a 26% drop at the end of the year was significant. The drop was tied to the relative volatility in macroeconomic conditions affecting the globe, though another major contributing factor has been Brexit and political instability.

Global M&A

The global recruitment M&A market was particularly active in the UK, with 32 deals last year – a five-year high, and well above the 17 recorded for second-place US. Deal activity in the UK was focused on expertise and capacity in industrial and technical sectors, reflecting skills shortages in those segments. The US was largely focused on healthcare-related M&A, representing 25% of their market.

Overall, of the 92 deals in 2018 (a 21% drop on 2017) generalist firms were the most in demand, at 25% of the total, followed by education at 14% and engineering & construction at 13%. Software saw relatively low demand, at 2%.Investment into the UK by country

In terms of investments made into the UK, domestic investment continues to be the most dominant, accounting for 24 deals. Japan made three deals, although Brexit is seeing the country become increasingly nervous about investment. The US accounted for two deals. The longer-term trend shows that domestic investment is up on 2017, hitting the highest level in five years, while the US has reduced its M&A investment into the UK.

Commenting on the results, the firm noted, “The latest report shows the recruitment sector remains strong and continued to grow through 2018 despite facing many challenges. Notwithstanding the personalised nature of these services, the market continues to evolve, seeing traditional recruitment firms utilising available technology along with new entrants showcasing innovative platforms.”

Related: High UK employment masks troubled economy.