Big 4 raid each other's pools as talent war rages amid unprecedented growth
Oct 2, 2023
Synopsis
The Big Four accounting firms - EY, PwC, Deloitte, and KPMG - are engaged in a talent war as they seek to strengthen their advisory practices and fill gaps in their service portfolios. Deloitte recently hired 150 members, including 15 partners, from KPMG, prompting KPMG to actively court Deloitte partners and their teams. PwC is also said to be poaching eight partners from KPMG, along with over 150 executives. The demand for talent has intensified as the Big Four firms have reported significant growth, fueled primarily by advisory sectors such as consulting and transactions.
The talent merry-go-round among the Big Four has gathered pace with each firm looking to beef up its advisory practice and fill gaps in its services portfolio amid scorching growth.
Deloitte recently lured 150 members, including 15 partners, from KPMG to its tax division. After the development, KPMG actively courted 17-18 Deloitte partners along with their teams from the rival's risk and corporate investigation team who had earlier worked with the firm.
Meanwhile, PwC is said to be in the process of poaching eight partners from KPMG, along with more than 150 executives, for its risk team, according to industry executives.
Competition for talent has intensified as each of the top four accounting firms - EY, PwC, Deloitte and KPMG - has reported 25%-plus growth for 2022-23, with collective revenue close to $4 billion.
"In the last six months, PwC has welcomed 16 new partners and executive directors to its risk practice, with 50% coming from Big Four firms and the remaining 50% from non-Big Four backgrounds. We are constantly seeking exceptional talent," said Sivaram Krishnan, partner, PwC India.
With the easing of the Covid-19 pandemic, the top four accounting firms have experienced an unprecedented growth surge.
Growth fuelled by advisory sectors
The growth has primarily been fuelled by advisory sectors such as consulting and transactions, and technology-led transformation mandates.
Remarkably, even traditional domains such as audit and tax have seen more than 20% growth at each of these firms.
The resultant demand has sparked a churn at the level of not only teams but also individual partners, with 14-20 partners moving among the Big Four every month.
"Every few days there is an email welcoming a new partner. Most of them are from rival firms, and a few also from tech firms," a director at one of the firms said on the condition of anonymity.
Leaders at the Big Four said clients have made ambitious growth plans as the Indian economy expands, hence they have been hiring aggressively.
"India is defying the trend compared to western countries in terms of economic growth, and the India story is fundamentally robust. In this context, every company aims to prepare for the next phase of growth and relevance," said Vivek Prasad, markets leader at PwC India. "They require assistance in areas such as technology, ESG (environmental, social and governance), re-engineering, innovation and, more importantly, building trust in the ecosystem. Consequently, leading firms like PwC are experiencing robust demand growth across their service lines."
While market leader EY has primarily favoured hiring smaller teams from competitors or recruiting industry experts, PwC, Deloitte and KPMG have been actively pursuing recruitment of larger teams from competitors.
At Deloitte India, the newly appointed leader, Romal Shetty, has set the firm on an aggressive growth trajectory and is scouting for talent in tax, risk and new technology areas.
"We aspire to increase our growth from Rs 8,000 (crore) to Rs 20,000 crore and expand our partner base to over 1,000 within four years," Shetty told ET in a recent interview. "Over the past four or five years, we have consistently achieved over 30% overall growth and, last year, our overall growth exceeded 40% as a firm. Deloitte India was the world's fastest-growing member within the network, and we are sustaining this momentum."
As part of its global strategy, 'The New Equation', introduced in 2021, Sanjeev Krishan-led PwC India has also been swiftly expanding its consulting, risk and digital operations. Currently, the firm is reportedly engaged in multiple hiring negotiations with teams in rival firms and multinational technology companies.
KPMG, which has been a target for large team movements in the past few years, is itself looking to hire large teams in advisory businesses, as the smallest Big Four in India has been clocking robust numbers too.
"India is one of the top three fastest growing markets across all geographies KPMG is present in," CEO Yezdi Nagporewalla had told ET last year.
Asked to confirm the team movements, KPMG and Deloitte spokespersons said the news was speculative and "there were no such discussions underway".
At the partner level, the firms require a six-month gardening leave.
While EY has not seen any large outward team movements, individual discussions between EY partners and other firms have notably increased following the dramatic collapse of Project Everest, the firm's auditing and consulting split initiative, multiple partners involved in hiring across rival firms told ET.
Short on senior talent on the technology consulting side, the top firms have been continuously poaching from Accenture to beef up their tech and AI teams.
These shifts come with enticing bonuses, loan schemes and stringent exit clauses, such as KPMG's proposed 50% salary cut during the six-month leave for partners who join a rival.
Most of the teams which are moving are on gardening leave currently or involved in protracted negotiations with current and future employers.
[The Economic Times]
