In July 2009, a large burgh named Kilmarnock in east Ayrshire, Scotland,’ made global headlines. It became something of a symbol of how far globalisation had come and the perils that had come along with it.

a PwC worker thanks God for the free whiskey

The reason: Kilmarnock was the birth place of Johnny Walker Scotch whiskey and its single biggest employer, but a decision was made to shut the factory doors to source cheaper labour internationally.

At the time, WSWS reported the following:

The closure of the Kilmarnock plant will have a devastating effect on the town, causing many more job losses as small companies, shops and service industries face collapsing revenues. Over £17 million a year worth of wages will be removed from the local economy. Kilmarnock, population 50,000, is a former industrial town with a long history of heavy engineering and textile manufacturing. Johnnie Walker’s whisky has been associated with the town since 1820. The bottling plant is now the last major manufacturing employer. East Ayrshire already has the fourth highest unemployment rate in Scotland, at 5.7 percent. The Walker’s closure alone will propel that figure to 6.9 percent.

Much like the way in which consumers of Johnny Walker “Scotch” whiskey might now be questioning whether the Red Label in their hands is just some bogus ‘Ganges River Bog Brew’, so too must clients of PwC now be wondering who is doing their work and how they are going about it.

You see, our sources have been telling us repeatedly that PwC is orchestrating a carefully calibrated scheme to siphon jobs away from expensive-labour regions like the US and Australia, to cheap-labour regions like India. And, like our article yesterday, it is a major concern for those at university hoping to score a graduate job, not to mention (of course) those anxiously clinging to the jobs they currently hold.

We received the following excellent tip-off from an anonymous PwC spy last week:

So now the truth of the PwC AUiT CIO’s REAL VISION and STRATEGY: http://retheauditors.com/2010/07/29/pricewaterhousecoopers-cuts-hundreds-of-internal-it-professionals/. Time for the next stage for Tata Consultancy Services (TCS) to take more Australian jobs!!

The hyperlink leads to an article that in relevant part reports:

PwC [US] has announced that the company will be cutting 500 jobs. Jonathan Stoner is one of the tax advisory and consulting company’s public relations representatives…Stoner says the changes are taking place across their IT organization, of which the majority is in Tampa. As of Thursday, there are 1100 individuals and they plan to cut 500 jobs, leaving the IT division with 600 employees … Multiple sources are telling me the number is closer to 800 and the reported 500 number is just and exercise in semantics

I recently told you about PwC’s new joint venture in India to provide, for now, only internal client service support to PwC member firms worldwide.  The US firm is the vast majority owner.  I’ve also been told that PwC bought a firm in Uruguay last year and will also use that location to offshore client support and internal support activities.

Indian towns and cities are treating less than 30 per cent of their sewage, allowing a staggering 26.5 billion litres of untreated wastewater to flow into its rivers and coastal waters every single day, a new government report has revealed… India’s 900 million Hindus revere many of the country’s rivers - especially the Ganges - and devotees often bathe in their waters to symbolically cleanse their sins…  This week alone, several million people are expected to immerse themselves in the Ganges at a festival called the Kumbh Mela - renowned as the biggest human gathering in the world. But the Ganges and many other Indian rivers are now so polluted that they contain more sewage than freshwater, as well as industrial effluent and partially burnt corpses from cremation grounds along their banks.

In response to our article a couple of weeks ago which profiled the alleged underpayment of PwC managers, came the following comments from anonymous PwC spies:

a PWC staffer speaks out

First this:

The “Mass Exodus” this article refers to is now occuring within the ranks of AuIT. Alot is said when staff leave and opt in being unemployed rather than finding something else. perhaps its time to desert the sinking ship?

Then this:

and is it any wonder that 22 people have resigned from AUiT since January??? when are the so called leadership team going to take notice? what a disgrace and PwC think they have collaboration and good culture? Its only a matter of time until something crashes and the firm will suffer, maybe then the Partners and rest of the firm will take notice!

A very astute professional services industry commentator recently wrote:

According to a study by McKinsey & Co, involving 77 companies and over 6,000 managers and executives – the most important corporate resource over the next 20 years will be talent.

Post GFC, the search for the best and brightest has become a challenging and costly battle. Organisations need to devise more innovative talent acquisition practices, and they will also have to work harder to keep their best people.

So perhaps it is time PwC did more to hang onto staff contemplating a move away from the firm?

Meanwhile, another anonymous PwC spy wrote to us yesterday in relation to PwC farcical “what would you like to change advertising campaign”:

Has anyone else noticed how unsuccessful the PwC “what would you like to change” advertising campaign was? We spent millions on this externally (trams, airports, AFR, Radio) as well as internally (new business cards, flyers, magnets, posters, office tags) instead of passing on bonuses to staff. I just looked at the website - check the dates of the comments - basically no comments since the start of July - and prior to that May! Surely this is more of an embarrassment than anything. I feel embarassed presenting my business card to clients when they ask what the “what would you like to change” motto is. I really hope they don’t go to the site and see how little traction it got.

Perhaps the change the PwC staff are looking for is a career change!

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In an article aptly entitled Accountants feel duped on pay rises, the AFR (25/6) walked readers through the poor salary sentiment pervanding Big4 accounting firms:

a PwC employee yesterday

A survey has found that 35 per cent of finance and accounting staff don’t believe their salary package is fair and in line with market rates… Employees were willing to put the effort in during the downturn … [but] as the economy improves, employees who see their company profiting now expect they should profit too.

…Employers are aware of the lack of satisfaction among their staff and 65% are concerned about losing employees in the next year … a looming skills shortage will demand that employers pay more for the best people.

But despite the apparent belief that employees willl leave, corporate partners bluntly refuse to do the one thing that will avert the propsepctive skills shortage; paying employees more.

Those doubting the authenticity of the results of the AFR survey should take one look in the Firm Spy inbox. We have been literally inundated with comments from our anonymous PwC spies in recent weeks, denigrating the firm for low pay and low morale. First this:

PwC Transaction Services salaries have really hit a new low. Pre GFC our group was the envy of the firm bringing in all the large transactions and therefore the best staff from across the firm. As a consequence our pay levels were generally higher than the rest of the firm as well. Not any more. After two years of being extremely quiet and all the quality staff members leaving (no bonuses or payrises last year makes the decision pretty easy for anyone with a sprinkling of talent), our pay levels are also the bottom of the barrel. Two years ago a newly promoted manager would recieve $105k, the new managers this year are on $88k. Is this saying something about the level of staff we have or the partners again being greedy?

Our vote? Partners are being greedy. We then this from another anonymous PwC spy:

Well it looks like PwC are about to lose a lot of employees. For those that weren’t lucky enought to be part of the “promote everyone” campaign (almost all staff were promoted this year regardless of experience as my partner told me - its easier to pass on fees to clients if we hire you out at a higher rank) 10% pay rises were handed out with no bonuses. After passing on 6% pay reductions last year (with the three weeks “optional” unpaid leave) passing on a 10% rise this year is effectively giving rises inflation over a two year period. A lot of talk of a mass exit in the coming months.

Finally, we received this absolute gem from another anonymous PwC spy:

PwC news: the situation with PwC is not undeserved nor is it a surprise. As a former auditor I spent 7 years towing the company line and protecting the culture until an epiphany hit me. The firms are run by Partners who have known no other profession. They started as annoying grads and have survived via attrition in a culture that rewards “old boys” and mechanistic automatons that espouse the ridiculous brand imagery. These people have an absolute void in understanding of culture, change management or high performance teams. The concept of reward and team work is an anathema to them. I personally witnessed a period in which the highest rating best performing individuals left the company to pursue other opportunities (some of which were less rewarding in the short term) because they couldn’t continue to perpetuate a culture of stupidity and arrogance and entitlement that permeates PwC and the big four in general.The partnership model is floored. Has there ever been a situation when so few get rewarded with so much for doing so little? I personally witness operational line managers in mining operations get paid substantially less but manage more headcount with greater daily output in far less salubrious surroundings. The quicker they bring in outside commercial managers to shake up culture, operating practices and provide some long needed innovation the better they will be , however the narrow view of the partners will never recongnise this need.

Can you see any sings of morale lifting at your firm?

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The outpouring of vitriol for big4 accounting firm PwC shows no sign of ending. Disillusionment, of the highest order, appears to have taken hold at the firm, despite what appears to be… err, good news.

first stop - India

We received the following comments from an anonymous PwC spy last week (thanks!):

In a move to try and retain staff at PwC, the firm has decided to have a “promote all” strategy for this years ratification period in June. As the firm has decided to keep pay rises to a maximum at 5% (with no bonuses), they have decided to implement “across the board” promotions. This is also seen as a step to forcing higher charge-out rates to clients. Clients of PwC should expect no more than three years experience for managers (many who do not have their CA) and one years expereince for seniors accountants (none who have CA). And if you are expecting experience from your Directors, think again, at almost $1000/hour you can get six years of the best. Has anyone heard of brand dilution?

Not only is PwC outsourcing work to India, and apparently charging clients the same, but, if our anonymous PwC is to be believed, it is embarking on a programme to gouge even more dollars to increase revenue at the risk of aggravating its client base.

Will they walk on?

What is your firm doing to increase its bottom line?

Send the Firm Spy your news and views!

Following on from our recent stories profiling the attrition rate at Big4 accounting firms came these comments from an anonymous PWC spy over the weekend:

As a PwC audit employee, I can vouch for all the truth of all the rumours posted on this site, and the fact that there are plenty of people who are ready to leave the firm - in one division alone there is talk that half the division is to quit by June this year. The pay at the moment is at a 30-40% discount to the market, there is no reward and recognition for the long hours worked, and you can forget about work life balance. The firm’s new Refresh Policy (to replace TOIL) is a complete joke, which requires you to have a 90% client utilisation where for every hour after that you obtain 25% of an hour you can take off work. What they don’t mention is that you never get the time to take Refresh, as if you do, you always have to make up the time on your client bookings anyway.

The CA support is a joke - what all the big 4 firms secretly want is for new grads to fail their CA modules, as it ties the employees to the firm for longer periods of time in which they can be used at the company’s pleasure and disposal. The offshoring of work to India (known as Our Team in India) rumour is true - clients are disgusted when they find out that work is being shipped off to them to be ticked and bashed. There is a great emphasis on using India to do work, but the strategy is a failed one, as many of the tasks cant simply be ofshore to them. The partners are greedy individuals who deserve everything that’s going to hit the fan this June - if pay and promotions don’t significantly increase this June, watch out

Are partners at your firm greedy? Will staff walk out in June?

Send the Firm Spy your news and views!

You’ll recall we reported on the utterly remarkable story of PwC’s formerly man-breasted COO, Neil Wilson, in early March. Wilson revealed to the AFR that:

“Since his chubby adolescence [he] had silently lived with male breasts, feeling self-conscious but never knowing anything could be done about them. As a youth he had been embarrassed changing in the locker room and as an adult… he never wore tight tops. Polo shirts were out… and so was lycra, even though he was a committed cyclist. He was was always comfortable going to work at PwC … because loose-fitting business shirts with buttons and a pocket provided some disguise.”

While Neil Wilson may no longer have whopping bitch tits (having had breast-reduction surgery), it still took a full chest for him to allegedly admit that perceptions of his Big4 firm PwC are deteriorating in the market. A bit like going from a D-Cup to an A-cup.

GET THEM OUT

If our anonymous PwC spy is to be believed, “Whoppers” Wilson has employed a fellow ex-pat Brit bosom-buddy to head its PR operation in an effort to lift the firm off the surgery floor:

Re:  plenty of jobs for expat poms at PwC

While busily outsourcing and offshoring everything in sight and putting Aussies out of jobs, there was an expensive bit of insourcing recently with PwC’s new appointment of bombastic ex-Boeing Brit Matthew de la Haye (yes, it is a real name!) an old school PR flak (with all the attendant tendencies) who was brought in from overseas on huge (we mean whopping) $$$$$ to improve the ailing firm’s propaganda efforts. He was hired by none other than fellow Brit “Whoppers Wilson”. Was Wilson’s exposure of his erstwhile “whoppers” Mr de la Haye’s sterling idea for his pommy mate?

An excellent question! Who on earth instructed Whoppers Wilson to expose his man-boobs to the entire AFR readership? If it was incoming PR Mr de la Haye, we would characterise it as his first major tit cock-up.

Meanwhile, finally a slice of good news from the firm. In the words of another PwC spy:

A glimmer of hope came with a call at Christmas … we all got bonuses! About a month’s pay in most cases, speaking of managers and below in assurance. Some workers at the other big 4 weren’t too happy. A preview of the hefty payrises to come in July after scraping the barrel for so long? With the exodus you would hope so and my oh my, is it an exodus!

Will your firm hand you a fist full of cash, or a pound of breast-flesh on July 1?

Send the Firm Spy your news and views?

Sometimes we wonder whether corporate firms have an panic-phone with a direct line to BRW.

Take the interview with PwC Chief Executive Mark Johnson in the current edition as an example. Johnson, whose worldliness and refinement stems from having:

spent his entire working life at PwC…

expresses in the interview his dismay at the harsh treatment PwC received in the media last year:

On a crisp autumn morning in 2009, PwC’s newly appointed chief executive partner Mark Johnson sat in breezy forecourt in Sydney’s Darling Harbour, fuming over what he saw as the careless disregard of the business press in reporting gloom day after day; over perceptions about job losses and corporate collapses turned into reality; over the impact of armchair theories on capital works and investment and the whole economy… [it was unclear if he] was being philosophical, or just cross about the … splashing of PwC’s cost-cutting measures - including 200 redundancies, voluntary unpaid leave and cash payments for university graduates to defer start dates [across media].

That anger appears to have passed now, however, if the sickly corporate grin he is sporting in the photo accompanying the interview is any indication.

So let’s see what we can do to bring it back.

We received the following comments from an anonymous PwC spy on the weekend:

Interesting news from the Australian IT department of PwC. Contacts have revealed that with morale low across the IT teams, people extremely unhappy with the direction and culture being promoted by the CIO, Hilda Clune, seems that disillusion and disappointment has set in, with serious talks about outsourcing the Service Desk team, and looking at options to reduce headcount (too many people in IT, despite some workers doing 10-12 hour days). And it seems that the heavy promotion of work/life balance at PwC applies to all, except those in IT below Director grade, seems they still need the “workers” to keep the wheels turning. With the “What would you like to Change?” campaign dying a slow and quiet death, and despite the majority of people accepting a pay cut last year, plus the firm’s attempts to bribe staff to suck it up for the team (do they realise that its not always about the money?) and then finding out that the payroll/finance team was being offloaded to India, with more outsourcing to come - the people just aren’t happy – thanks to Neil Wilson & Mark Johnson. Well done lads!

Sounds like Mark is doing a sterling job to us. Everyone loves an international out-sourcer - there is nothing quite like sending Aussie jobs offshore to help foster staff morale.

Send the Firm Spy your news and views!

In what is developing into a pattern amongst Big4 Accounting firms, PwC has become the latest firm to institute measures to stem the flow of talented staff.

Yesterday, we heard that Deloitte Chief Executive Partner Giam Sweigers recently sent a voicemail to his partners to take action to prevent the continued loss of senior tax employees. Today, we report the following leaked email, apparently written originally by PwC Chief Executive Partner Mark Johnson, and allegedly sent to all PwC staff yesterday:

Dear colleagues,

On behalf of the Firm Executive, I am very excited to launch our new, firm wide PwC Experience Recognition Program. Through this program you can recognise people and teams who are embedding the PwC Experience behaviours, and the values in our Market Growth Strategy.

Based on what clients and the market are telling us about the service they are seeking, the initial focus will be on agility and collaboration - to support us working this way in the firm. Despite the tougher market there are many fantastic examples of how people are collaborating across the firm and with our clients in new ways, and also examples of how people are being agile to meet our clients’ evolving needs or proactive about acquiring new skills, experiences and networks.

giving experience the recognition it deserves

Now is your opportunity to share these stories and have your efforts and those of your colleagues’ acknowledged firm wide. The program is open to all partners and staff, and nominations can be submitted all year round. Successful nominees will be able to choose from over 150 high quality gift options and experiences, and are automatically considered for the annual PwC Experience Awards, where four major awards will be given to the most outstanding nominations over the year.

Congratulations to our first group of successful nominees, who will all be considered for the annual awards - read about their inspiring stories. Remembering to recognise and appreciate each other is one way we can bring our brand to life and keep building the culture we want to create.

I look forward to hearing more about the great work you do every day in our firm through the recognition stories you share.

Regards Mark G. Johnson

150 high quality gift options and experiences, for “embedding the PwC Experience behaviours”? Hmmm… a jar of jam for morphing into a corporate wanker certainly sounds like a sweet deal to us, but do PwC staff agree?

Apparently not. The anonymous PwC who leaked us the above email (excellent work, by the way) had the following comments to make about it:

Well just the trick to keep the unhappy staff at PwC! Not sure if this will work, after all the staff morale could not be lower and the management have stooped to a new low with some middle management promoting themselves outside of the promotion period WITHOUT even notifying their groups! Word is from HC that even though the firm cannot afford it, all staff will be given pay rises to try and slow the flow of good staff out the door! now a recognition program for all the relationships, a great way to reward your mates!

Is the war for talent officially back on? Are corporate firms who acted with impunity during the GFC finally starting to receive their comeuppance?

Send the Firm Spy your news and views!

At a time when major international corporate firms are creating a presence in Australia, it is something of an omen that international accounting heavyweight PricewaterhouseCoopers is rumoured to be actively seeking to move some of its work to affiliate offices in locations with favourable exchange rates.

The end result of this is one of two things:

1. the client gets charged less for the same work; or
2. the PwC partnership forces the client to pay the same for work that in fact costs less and retains extra profit.

Our guess is that the latter is what is happenening.

Thanks very much to the anonymous PwC spy who sent us the following comments:

Howdy Firmspy. Thought you might be interested in this. I have received word that PwC is looking to target a minimum of 20% of personal tax returns (ie Private Clients) to send overseas to India for outsourcing by the Indian firm in FY2011. So not only are they sending Australian internal jobs to India, but substantial client work as well. They have already been sending some audit work to India for some time through Indian contractors, but this will directly affect staff numbers mid to long term. In all PwC Private Clients areas, graduate recruitment numbers have been reduced by 20% with the number likely to increase if India take on more outsourced work. This is largely the work of Mark Johnson since he took over as CEO in July 2008 and his so-called “operational efficiencies”. Sounds like he wants to be Australia’s answer to Jack Welch to me. Bring back Tony Harrington!

Here at the Firm Spy, we think all potential PwC graduates should be wary of this rumoured development. If there is continued off-shoring of jobs to India, will there be enough future work for you? Will you be jobless?

But more than that, all PwC clients should be very wary of the rumour. Not that we wish to generalise, but if the rumours are true, are we about to see the emergence in accounting circles of something akin to manufacturing sweatshops in which offshore clients seize upon favourable trade terms? Would you feel confident that you’re receiving your maximum personal tax return if your accountant is, say, shoulder to shoulder with sweaty workers, whilst being overseen by a whip-cracking corporate infidel? How about if Indian musical DJ icon Punjabi MC was blaring in the background?

Are you worried that your job can readily be performed at some Indian outpost for a fraction of what it costs for you to do it?

Send the Firm Spy your news and views!

Thanks to the anonymous spy who tipped us off to the life-long male bosom saga confronting PwC Chief Operatios Officer Neil Wilson. Had we had our collective melons screwed on correctly we probably would have seen the AFR article (4/3) in the first place!

In a remarkable “men’s health” piece appearing in last Thursday’s AFR, PwC partner Wilson, the figure we once rebuked for allegedly sending Australian PwC jobs offshore to India, walks us step by step through a life living with man boobs.

“Since his chubby adolescence [Wilson] had silently lived with male breasts, feeling self-conscious but never knowing anything could be done about them. As a youth he had been embarrassed changing in the locker room and as an adult… he never wore tight tops. Polo shirts were out… and so was lycra, even though he was a committed cyclist. He was was always comfortable going to work at PwC … because loose-fitting business shirts with buttons and a pocket provided some disguise.”

Breast distress! What is a corporate partner to do when he is jugg-a-lugg full of melon-choly?

As luck would have it, Wilson, whilst thumbing through the paper one morning discovered that breast-reduction surgery was an option.

“whilst reading the paper over breakfast in London last year, Wilson’s attention was caught by [a story] which said that increasing numbers of men are now having breast-reduction surgery… [Soon after] he had himself referred to a cosmetic breast surgeon. At the first consultation the surgeon asked him to remove his shirt. ”Wow!” he said. “These are whoppers, I’ve never seen any as big as these.”

Wilson knew his breasts looked fleshy. 

In subsequent breast reduction surgery, the sugeon is reported to have removed 160 grams of breast tissue which the doctor described as “a lot”.

Now, several months after the surgery, Wilson is satisfied with his new chest. With that familiar degree of corporate partner modesty,  Wilson told the AFR:

“At 50, I didn’t expect I would come out with a male model chest, but I’ve been working hard with weights and can wear a skin-tight top and look reasonable.”

Does your chest look reasonable? Do you suffer from bitch-tits?

Send the Firm Spy your news and views!