Staff “Haemorrhage”:Ernst & Young Considers Profit Distributions For All Tax Staff

It has been a while since we’ve reported anything Big 4-related, so it was excellent to receive the following tip-off from an anonymous EY insider:

Dear Firmspy,

Just a quick piece of news that may interest you regarding Ernst & Young Taxation and their renumeration policies. As you may know (based on some of your past posts), EY tax were considering incentive-based renumeration policies (based on the recent haemorrhaging of staff in staff in the Tax Division). By way of incidence, I note that the blood-letting of staff has continued over the last couple of months.

The new package provides staff with an extra payment based on performance (beyond the standard indexation and increases in wages to match market rates with the other Big 4). The extra renumeration is contingent on the tax practice achieving a certain minimum pre-set profit figure, beyond which profits will be distributed to staff.

In short, a sterling effort on part of EY Tax leadership to finally bring EY in line with the market – and is definitely reminiscent of pre-GFC days!

Uncle Ernie

That is excellent news indeed. We continue to be surprised at the lack of effort amongst major Australian corporate firms to incentivise staff to work the long hours that they do. On the whole, we regard the curernt framework in which some firms tend to give staff a once-a-year discretionary bonus (in which the recipient almost always feels unsatisfied) as unsatisfactory. It sounds like the EY profit-distribution mentioned above will also be a once-a-year deal, but it at least appears to provide the partnership will less ability to screw staff discretion.

Can our readers think of any reason why corporate staff shouldn’t receive a monthly bonus together with their pay, if they exceed performance targets? We think it makes sense. It might even help depressed staff enjoy their jobs more. And it certainly seems there are plenty of EY staff who don’t like their jobs. One observer recently wrote:

Wow. E&Y is a crap place to work. Who would have thought it. As far as I can tell, EY has two sorts of employees: those who have a job offer to go somewhere else and those who are still looking for one.

Another wrote:

To aspiring graduates – I would strongly recommend avoiding the place. They are as stingy as it comes and feel threatened by talent.

Stingy as? You bet. Ernst & Young (allegedly) recently screwed Financial Services CA-qualifiers out of their $2000 bonus.

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