PwC chairman Kevin Ellis said that there is an economic need to encourage employees to work from office for two to three days a week. “I think there is a business advantage to investing in our people and a business advantage to our people being trained to work in a collaborative way.” PwC made a deal with its 22,000 staff this year requiring them to spend two or three days in the office or on client sites every week.
The firm reported a 25 per cent increase in annual profit for the year to the end of June, after a boom in demand for deals, advisory and consulting services in the second half and a fall in client-related expenses such as travel costs. PwC’s 939 partners will receive record payouts of £868,000 for the year. Average partner pay rose 19 per cent to £818,000 and partners will receive an average £50,000 additional payout from disposals including eBAM, its financial technology platform.
Ellis said that productivity had been strong with people working from home during the pandemic and he would not follow Google, the technology company, and Morgan Stanley, the investment bank, and penalise staff working remotely with lower salaries. “We’re in a war for talent, because we’re busy,” he said. 'A lot of other businesses with the same skills that we need are busy, so I think that’s not something to consider at this stage.”
PwC is the first of the Big Four accounting and consulting firms, which also include KPMG, EY and Deloitte, to report 2021 results. The record payouts will increase calls for government to bring forward reforms to reduce their dominance after criticisms over poor-quality audit work. Lord Sikka, a Labour peer and accounting professor, said: “They’ve been able to earn higher profits because they really dominate the market. The regulator said they have been delivering poor audits, not just now, but for years. They should be returning all the fees.”
The Financial Reporting Council’s annual audit quality review published last month recorded a year-on year improvement in PwC’s audit work, but said it still fell short of expectations, along with the work of its biggest rivals. The firm’s UK revenue rose by 2 per cent to £4.4 billion. Audit revenue was up 7 per cent to almost £1.1 billion, which Ellis attributed to its £90 million investment in improving audit quality.
Ellis said that criticism of the firm’s market dominance should recognise that its competition goes “well beyond the Big Four. All of our lines of service have done really well . . . If you look at where the growth has come in deals, that’s virtually every investment bank, every boutique we compete with. Audit has been a part of it, but audit is only one part of our significant business.” He said that the growth opportunity in professional services was “enormous” and that the company had
recently opened new offices in Belfast and Watford. It was bringing a record 1,650 graduates, school leavers and apprentices who were doing part-time degrees into the company next month.
