Irish units of accounting and consulting firms slash pay
Partners at the Irish wings of the Big Four, BDO and Mazars are facing reduced pay over the Covid-19 crisis, in a bid to maintain graduate hiring commitments. Mid-tier firm Grant Thornton has not indicated whether its Partners will also take a pay cut though.
Recent research by Source Global Research suggests that the UK consulting market could see a revenue fall of an estimated 28% over the course of 2020 – plummeting from £8.6 billion in 2019 to as little as £6.1 billion. That retraction would see the market shrink to its smallest size since 2013. In a bid to offset the worst impacts of this jarring drop in income, many firms have drafted emergency plans for the coming months.
Most prominently in the UK, the start of April saw professional services giant PwC announce a freeze in promotions, pay-rises and bonuses for staff, in a bid to avoid the need for redundancies at the Big For company. Now, the neighbouring Irish wings of the Big Four as a whole have announced their intent to implement cuts to Partner remuneration.
Sources in EY told The Irish Times that its Partners were taking a cut of at least 20% in their profit distribution this year. They added that there were no plans to cut pay of the firm’s staff, as confirmed at an “all hands” meeting on April 22nd, with its managing partner, Frank O’Keeffe, advising staff of the cut to Partner profit distribution. It follows Irish Partners at KPMG and PwC agreeing to pay cuts, with KPMG’s 100 Partners reportedly taking a cut of up to 40% in overall remuneration for 12 months, while PwC’s Partners agreed a temporary 30% reduction to allow the firm see out the slowdown.
Elsewhere, rival Deloitte confirmed the cuts its Partners are taking, having been first to publicly outline its plans two weeks ago. The firm said its Partners would take a 30% reduction in their pay, helping it to avoid making use of the Government’s wage subsidy scheme (as EY similarly committed to), and allowing Deloitte to maintain its graduate recruitment programme.
Beyond the Big Four, mid-tier firms have also been making stringent cuts. Mazars said its Partners had agreed to take a cut in earnings of 25% and maintain its graduate recruitment – though according to The Irish Times, it is unclear whether the firm will leverage of the Government’s wage subsidy scheme. Meanwhile, BDO has not published the extent of Partner pay cuts, but has said they will be “immediate and significant”. The firm is taking up the Irish Government’s wage subsidy scheme, and has said its graduate programme would go ahead. Grant Thornton has reportedly declined to signal if Partners would take a cut in pay.
