December 10, 2022
PwC sees opportunity to hunt down employees during EY split

PwC is looking to poach employees from its Big Four rival EY and take advantage of the “disruption” and “uncertainty” caused by EY’s decision to divest its accounting and consultancy arms.

PwC global president Bob Moritz told the Financial Times that he was hoping to be able to woo senior managers and even some partners as the firm pursues major expansions in headcount.

He added that recruitment opportunities have picked up, as EY has provided more information about its division to partners. “Now you have some basic outlines that you’re starting to see a little pick-up in that area. People now look one way or the other and [ask] ‘Do I want to be part of the same organization?’ and ‘Is this the culture I want to be a part of?'”

Moritz reiterated PwC’s commitment to putting together its consulting and audit arms, saying it is “watching and evaluating” EY’s move, but has not changed its conclusion that “multi- Merit” model has strengthened both sides of the firm.

“We want to be extremely certain and certain . . . to make sure our people have a long, sustainable future ahead of them, and that it is full of career opportunities,” he said. “My hope is that a little bit in the industry. With Disruption, It Creates Opportunity [and] We can pick up on uncertainty, not necessarily just [at] EY.”

EY said last month that its global leadership had decided in favor of divesting the business, and the decision now goes to each of its local partnerships for approval. Votes will begin around the end of the year, with the aim of rolling out the consulting business on the stock market in late 2023.

EY partners are in line for big gains if they persist during the split. Consulting partners will be given 75 per cent of the advisory business, which can cost seven to nine times their annual salary. Audit partners can get cash payments of two to four times their annual income. Moritz said it would be easier to lure senior managers a layer or two below the partner.

EY said the split would prepare the two fast-growing companies with more opportunities for their employees, including a faster path to partner. “They should be concerned about our poaching,” the firm’s spokesperson said.

PwC is barely a year into the five-year plan to add 100,000 jobs. It employed 328,000 people at the end of June, 32,000 more than a year earlier.

The firm made 17 acquisitions last year to fill gaps in its consulting services and will continue to pursue deals, Moritz said, but was turning its attention to investing in new lines of business.

Moritz spoke to the Financial Times shortly before the publication of PwC’s annual revenue figures as of June 30. It showed a 23.5 percent jump in its consulting business to $20.7 billion, a 7.6 percent increase in the assurance business, which includes audits, to $18bn, and a 6.8 percent increase in tax and legal services, to $11.6bn.

Overall, the firm reported 13.4 percent revenue growth for a total of $50.3bn. The growth rate is calculated at constant currency rates.

EY last month said its revenue rose 16.4 percent in local currency to $45.4 billion by the end of June.

PwC’s growth was fastest in the US, where revenue was up 16.3 percent.

Column chart of Global Revenue ($bn) showing the jump in revenue in the Big Four

Work on mergers and acquisitions, a key driver of the consulting business, has stopped since the end of the fiscal year, Moritz said, indicating a tough period ahead, although its pipeline of new business remains strong overall.

“Small to medium-sized organizations have already started to correct for the slowing economy and you are starting to see a pivot towards defensive measures like cost reduction,” he said. “But medium to large sized organizations are really moving fast even after the change.”

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