PwC plans to quadruple the pace of its partner hiring in the US and take advantage of uncertainty at EY by poaching some of its rival’s most senior executives.
Partners at the Big Four accounting and consulting firm have been told the hiring spree could hold down their share of profits in the coming year, but would bring a competitive edge over the long run, according to people familiar with the plan.
The PwC partners have been urged to help win over executives from rivals, with a particular focus on EY, which is in the middle of a tumultuous decision over whether to split the firm. PwC’s US leadership has told them it wants to attract EY partners with expertise in tax, cloud services, financial crime and environmental, social and governance advice among other areas, one of the people said.
Although PwC has not set a target for the number of people it wants to poach, it has said internally that there is “capacity” to bring in 500 people at partner level in the US in the next 18 months, the people said. Partners brought in from outside, rather than promoted internally, are known as “direct admit” partners.
PwC hired 500 direct admit partners in the US in the past six years.
Votes by EY’s 13,000 partners around the world on whether to split its consulting and audit businesses have been pushed back to next year, and the firm is still wrestling with who will be allocated to which side of the business.
EY’s audit partners will get cash payouts if the plan comes to fruition and consultants will be given shares in a new publicly listed company, but their potential value is uncertain and the shares are not expected to vest for several years. Partners being paid in shares would also receive significant cuts to their annual pay.
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The prospect of cash or share awards is likely to make many partners reluctant to leave EY, however, and EY says both sides of the business will grow faster after the split.
“We are hiring more than ever and we are also targeting direct admit partners from other firms,” including from PwC, an EY spokesperson said, adding that 20 US partners had come from PwC in the past 18 months. “Our partners are excited about being leaders of the profession and leaders of their sector, and we are seeing no attrition, period.”
The Big Four accounting firms have been engaged in a war for talent as the number of people taking exams to enter the profession declines and their consulting arms have recorded revenue growth in excess of 20 per cent in the past year.
PwC had 3,658 partners and principals in the US at the end of May, according to its latest purpose report, up from 3,509 the year before in a workforce that swelled to 43,795 from 40,052.
One partner said the effort to poach staff from EY extended beyond the US to areas including Germany, France and the Middle East, and even if it failed, it could force EY to pay more to retain the partners that were approached.
“All’s fair in love and war,” the person said. “There’s a concerted effort by us to unseat EY partners, and if we don’t unseat them then at least we disrupt them and push up their cost base.”
A PwC spokesperson said the firm’s “commitment to the multidisciplinary model and quality, partnership structure ... are what attract talented professionals to PwC”. — Copyright The Financial Times Limited 2022
