Category: Deloitte

Deloitte Is Totally Cool with You Jumping Ship

A GC reader from Deloitte emailed me the notes from a recent meeting for management on the health of its staff levels. Our source had the following to say:

I’m a senior in D&T (making manager in the fall) and thought the minutes from a recent manager meeting were interesting in terms of HR’s take on attrition. It does match what you’ve said in your column, i.e. they plan for a certain level of attrition, but I don’t think they even want to consider that there could be a cause for concern.

Management Community Feedback

Retention: Previous S. Manager / Manager Practice meeting unity is seeking additional clarity as to where the firm is heading, in the short term and long term (i.e., economics, compensation, etc.).

HR Audit Update: As of the time of the meeting, specific numbers are not known

DWB: Staff complaints, questions, and concerns, are summed up with the phrase “community is seeking additional clarity.” People want to know what the *#&! to expect in these still-somewhat-unclear times. Oh, and HR? They can run their “numbers” in minutes. Why they were not shared is a mystery; a concerning one at that.

Senior Turnover: Managers feel concerned with the leadership leaving at the senior level – potential for additional turnover in the fall

HR Audit Update: Turnover is comparative to 2 – 3 years ago so not considered a concern.

• Recent increase in the number of seniors that are voluntarily leaving the firm when compared to those trends seen in the last 12 – 18 months
• Region is looking at approximately 75 new hires
• Restrictions on inter-office transfers are being lifted

DWB: A lot to take away from this.

1) Managers are vocalizing the fact that people are leaving; this goes beyond the typical public accounting attitude of “good riddance.”

2) Turnover in 2007 was incredible. Do you remember what the market was doing in 2007?! It was a rip-roaring success. To compare it to that time frame and say it is “not considered a concern” is troubling. The difference between then and now is D&T was hiring like gang-busters themselves at that time so the attrition was not “felt” as severely as it’s being felt now. Layoffs and frozen hiring budgets make the recent staff losses more significant.

3) More people quitting now than during the recession? What research expert included that bullet point?

4) Inter-office transfers being reintroduced is a positive point; expect an announcement about this spun in the HR-style of “woo-hoo, now you can work in St. Louis!” And by St. Louis they mean Branson, Missouri.

What to do?

• Create a positive environment for the seniors and staff
• Leverage personal experiences to keep seniors/staff motivated
• Express advantages a “manager” position can add to one’s career path when looking at long-term goals.
• HR Advisory Update: National recruiting expects a good group in the Mid-West. Comparative attrition trends are taking place even though it may feel that the turnover rate is higher than normal.

DWB: Talking about the glory days of D&T audits doesn’t sound exciting, but sometimes it’s enough of a Kool-Aid effort to keep staff motivated. And look! Attrition rates are right where they want them to be. So all of you on under-staffed, over-worked projects? Yeah, this is the type of environment they plan for.

I’ll let our anonymous tipster finish off the commentary:

At least they might try to “create a positive environment” for me. I’d be really concerned if HR actually believes this or if they just don’t want to panic the managers. (Incidentally, I will be leaving after they give me the promotion.)

In More Accounting Firm-Terrorism Related News, Some Taxi Driver Really Had It Out for Deloitte

After a sun-adverse family man tried to blow up the Viacom Building (and was close enough to E&Y to evacuate the area) and a former PwC Senior Manager was charged yesterday for supporting terrorism, now a taxi driver whose company serviced Deloitte in India has been arrested for attempting to set off a bomb in Hyderabad’s HITEC City:

Pakistan-based Lashkar-e-Taiba was planning bomb attacks on the HITEC City, a major IT township here, and the office of a multinational auditing firm.

Mohammad Zia Ul Haq, who was arrested yesterday following a tip off by the National Investigation Agency, was directed by his LeT handlers to bomb the Hyderabad office of Deloitte Touche Tohmatsu, one of the four largest auditors in the world, and was in the process of carrying out the plan, government sources said.

Interestingly, Haq works as a driver for a taxi service hired by Deloitte Touche Tohmatsu.

What kind a-holes do they have working at Deloitte in Hyderabad? Bad enough that this guy concluded that bombing a company that puts food in his mouth was an action that needed to be taken. Thankfully, they caught the guy.

Obviously the question now is, when does KPMG get its little terrorist related news?

LeT planning to attack Hyderabad’s HITEC City [Economic Times]

Deloitte Playing Superhero to Group Hoping to Buy Manchester United

Let’s stop digging E&Y for five minutes and talk about Deloitte trying to sex itself up as tax advisory coaches to the group hoping to purchase Manchester United.


Guardian:

Deloitte, which has worked hard to build up its sporting credentials with its annual audits of football’s finances and consultancy work for a host of clubs, is understood to have become the latest big financial hitter to become associated with the Red Knights, the would-be buyers of Manchester United, in an advisory capacity.

Alongside Freshfields, which is supplying legal expertise, and Nomura, the Japanese investment bank that has been responsible for contacting all the 40 or so wealthy individuals who expressed concrete interest in the plan, Deloitte is believed to have been supplying advice on tax structures and how to structure any bid most efficiently.

Yeeeeeeeeeeah I can see it now, “casual football Friday” memos circulated around Deloitte’s UK offices about appropriate garb for the field and some hokey “We Are the World” sing-a-long at the end when Manchester United kicks whomever’s ass (I don’t watch the stuff). Excellent.

In the spirit of not discriminating when ripping on the Big 4, this Deloitte flick nearly brought me to tears. Maybe it was the faux hawk or the overgrown baby beard. Perhaps it was the fucking cape. You decide.

The Green Dot FTW!

Bonus Watch ’10: Are Deloitte Partners Getting More Generous to Keep the Peace?

Here we are, it’s April, and most of you are happy to be bored (relatively) at work for the first time in months. Now that your brain isn’t saturated with numbers and/or what you’ll eating at your desk, you may be weighing your options. As we’ve mentioned, Big 4 partners are expecting this and naturally they want to keep their top performers. How best can they do this? Bribery of course!


And at Deloitte, this method seems to be gaining steam. An accountant close to the situation gave us the rundown on the recognition programs at the firm:

• Applause Awards (whenever)
• Outstanding Performance Awards (whenever)
• Merit Bonuses (annual)

For the most part AAs ($100 to $500 – tax adjusted) and OPAs ($500 to $5,000 – non-tax adjusted) were frozen for the last 2 years; with MBs only being processed for 1s and sometimes 2s (we’re rated on a scale of 1 to 5 – 1 being the best, 5 the worst – with typically 5% 1s, 10% 2s, 80% 3s, 5% 4s and 5s).

Now that you have the background, there’s this:

Based upon what I’ve been hearing very recently, strong performers have been getting [Applause Awards] for $100 in the NE [Advisory] practice. In some limited instances, partners have also hinted at more money coming their way (seemingly in the [Outstanding Performance] realm). Seems like the partners are noticing that people, especially performers, are getting antsy; and are trying to keep the peace until compensations are adjusted in September…

Well! Good to see that Deloitte partners are taking their firm’s advice (combo of #2 and #5). This could work out well for those of you that are rockstars at Deloitte (and are easily swayed by monetary reward) but for the other 80% that fall into the unexceptional categories, you may just have the longer ladder to look forward to.

Earlier:
KPMG Reinstating “Standing Ovation” Bonus Awards

Deloitte Offers Insight on How It Plans to Retain Its Workforce

Continuing with Wednesday’s attempt to provide insight on some KPMG H.R. banter, I will try to do the same with a recent Deloitte press release.

What seems to be their attempt to provide the private sector advice on how to prevent an exodus of talent actually sounds like a fluffy internal HR memo. Perhaps the Big 4 should review Deloitte’s top ten list of ways to not get slaughtered by the ever-improving job market:

1. Take advantage of the continuing globalization of talent and leadership markets.

DWB – Raid your competitors of their best talent, downplayed earlier this week.


2. Know your critical leaders and most critical talent. Keep your talent pipeline robust enough to deliver those critical skills.

DWB – Pay your top performers in order to keep them happy. If they receive an offer elsewhere, counter-offer their asses. Because the only inevitable outcome is the loss of some talent, see #1.

3. Prepare for a workforce that is more mobile and quicker to pursue new career opportunities.

DWB – Keep tabs on your people. Job loyalty has gone the way of the dinosaurs Baby Boomers. The “what’s in it for me” mentality is keeping job markets saturated with talented individuals looking for a better deal.

4. Tailor your strategies to address the generational and geographic diversity of your workforce.

DWB – Old people and young people don’t get along. They’ve never gotten along. They never will get along. Accept it and move on.

5. Show your employees both the money and the love. Communicate your employer brand as clearly to employees as you communicate your product brand to customers.

DWB – One part water plus two parts HR spin, stirred. Pour over ice. Serve.

6. Know what it takes to stay ahead of your competitors in retaining critical talent, developing new leaders, implementing workforce planning and driving innovation.

DWB – I don’t have a clue what you’re supposed to learn from this. Money is the main driving force. Money makes people dance for joy or jump ship. If your retained talent is net positive, suhhhweeet.

7. Create clear career paths for employees at all levels.

DWB – I like this one if implemented correctly. The traditional career trajectories are well known; communicate practice-to-practice and geographic rotations. Change – even short term – can refresh one’s career and create a greater sense of loyalty to the firm.

8. Align your leadership development programs with your long-term business goals.

DWB – Every firm has ‘the chosen ones” and invests in additional training, retreats, and leader cultivation courses. This should come as no surprise.

9. Know the real impact of talent retention and voluntary turnover on your bottom line.

DWB – Newsflash: it is not cheap to replace talent. Considering most hires begin their careers as interns, we’re talking years of financial investment in every staff member. From pen giveaways to amusement park tickets, there’s a steep price for every staff member lost!

10. Be a beneficiary — not a victim — of the resume tsunami.

DWB – Perhaps you should revisit point #1.

Jim Quigley Takes Exception with the Notion That Deloitte Isn’t the Biggest Firm in India

You don’t need to tell Jim Quigley that it’s only a matter of time before Deloitte is the largest accounting firm ON EARTH.

In a Q&A with India’s Business Standard, Quigs was asked about the shrinking gap and you better believe the man is all over it like a hard-hitting interview at Davos:


After five years, we have eliminated the gap. They were once $2 billion larger than us.

At $26.1 billion for FY ’09, Deloitte is all over PwC ($26.2 billion in FY ’09) for the Biggest of the Big 4 in terms of revenue. However, JQ was a little more defensive when asked about the firm’s presence in India.

But if one looks at India, the perception is that you are the smallest amongst the Big Four.
I think we are the largest in India when you look at the number of people. We have 12,000 Deloitte people in India and we are on our way to 20,000 people.

In other words, “Thanks for bringing that up but since India revenue isn’t known, head count is how we’ll measure this. And in that particular case, we’re the largest. Next question.”

But a lot of them are your [Business Process Outsourcing] employees at Hyderabad.
Yes, we have about 8,000 people there. And we are growing that towards 15,000. They are focused on serving the global market place.

We have the number one audit share in India. Our audit share of the listed companies is larger than any of the competitors. My goal is to go for balanced growth in India. I want to be one-third audit, one-third tax and one-third consulting. Growing the tax and consulting businesses is easier than it is to move the audit share because companies don’t change auditors often. The fact that we start with the largest audit share is a terrific foundation for us. My aspiration is that I want to be the absolute leader in professional services, especially in important emerging markets like India.

Translation: “Are BPO people not employees? Why wouldn’t we count them? And since we are counting them we’re going to double that number, FYI. Oh, and we have the biggest audit share in India and it we’ll eventually be biggest in everything so then they’re won’t be room for ‘debate’ (making the air quotes).”

In how many years?
In three to five years, I want to be the absolute leader here. I have more people here than anyone else today.

That is, “Deloitte numero uno by 2015! Did I mention that we have the most people here?”

Then the best part, comes a little later when Quigs gets the Satyam question:

How has Deloitte strengthened its internal controls after the Satyam scandal?
I don’t think you can say that if one firm has had an issue with Satyam, therefore all professional services firms have a problem.n the aftermath of that fraud, and it was a management fraud first, to make sure that we did not have comparable circumstances, we went back and reviewed our 50 largest audits. We challenged our partners and thinking. We were satisfied that we have completed procedures that will reduce to a relatively low level the risk that an undetected error could occur. Our commitment to quality is tireless. And that is what you want the market leader to be.

So it sounds as though Satyam will be NBD for Deloitte, unlike some firms. We know India is a fraud paradise so it wasn’t was their fault; they were duped. Deloitte is undupable.

‘Deloitte wants to be the absolute leader here’ [Business Standard]

Promotion Watch ’10: Deloitte Slowly Lengthens the Corporate Ladder

Yesterday we told you about the unofficial “our bad” from Deloitte on the layoffs that happened last spring. While that doesn’t necessarily address any of the subsequent layoffs, it’s a start.

And we have a little update from our previous query about Deloitte compensation increases as well as some promotion time-frame news:


A Green Dot familiar with the situation told us the following:

– There will be raises this year
– People shouldn’t expect raises like the ones back in the SOX days
– As always, there will be an effort to reward strong performers

At the same time, promotions may be a different story, at least for the R-space, where they want to move away from the “3 years to senior” mentality, towards a “ready to be a senior” mentality. Promotion time-frames are expected to be lengthened, although comp will remain competitive.

We should note that the raises in this case refer to the NE AERS, so if you’re hearing different in your region, let us know. The “won’t be like the SOx years” message also reiterates what DWB said on Tuesday about curbing your enthusiasm, so at least try to be realistic.

Regarding the promotion news, the effect on “R-space” which for you non-Deloittes means the “Advisory Practice,” our source indicated that this has been in the works for some time but has been poorly enforced in the past, with most eligible promotees getting the bump after three years in the trenches.

Further, it sounds as though the extended promotion time-frame (i.e. replacing “ready” with a given number of years) will occur at all levels, especially from senior manager to partner. Our source then mused, “Since Partners own their [senior managers]… it’ll be interesting to see how turn-over ends up.” That will certainly resonate with those that already consider senior manager to be a parking lot on the road to partner.

Deloitte isn’t the only firm that has given serious consideration to the lengthening of the corporate ladder. Last December we discussed KPMG’s always-being-discussed plans to move away from the six-year manager track in their audit practice. Back then we said:

The rumor that the KPMG bigwigs have been considering a six year timeline to make manager in the audit practice has been kicked around for at least a couple years. Naturally, there were two schools of thought:

• Managers thought it was good idea

• SAs thought it was a terrible idea

Deloitte insisting that salaries will remain competitive should quell some concerns although there are some out there that do get hung up on titles. So while it seems that Deloitte will be getting back to merit increases for FY ’10, they’re being much quieter about it and may be getting serious about adding some rungs to the ladder. Climb with patience.

Deloitte Admits to Handling Layoffs ‘Poorly’

That “All-Hands” meeting we told you about on Monday sounds like it was a real snoozer, however, a source who was there did share two interesting details:

The guys in charge basically told us the following:

– They handled the [May 2009] “headcount adjustment” poorly. It was a necessary action; but more communication was necessary to keep people informed.
– Deloitte is better poised to grow over the next few years as compared to their competitors (we saw projections, but no comparisons…)

That took about 1.5 hours.

Since this was an “all-hands” we’re assuming tax people were there? If so, the ones still trudging towards the 15th (one week!) had to be suffering borderline panic attacks. Or maybe it was a brief oasis? Either way it’s unfortunate that nothing came up about increase in comp. Maybe Deloitte is the one firm that is saving it as a big surprise. If the cat gets let out of the bag on comp, get in touch with us.

Former Deloitte Intern Not So Good at Gambling on Corporate Card, Lying About It

In blatant-misuse-of-the-corporate-credit-card news, a former Deloitte “trainee/student” (let’s assume an intern, shall we?) has admitted to racking up over £8,800 in gambling debt on his Deloitte issued credit card.


Umar Qureshi, using his Deloitte laptop no less, managed to lose the money in just a couple of months, October and November of 2008. At that point, Qureshi, rather than admit to being a horrendous gambler, lied about the charges, telling Deloitte that they were fraudulent. Depending on when this particular lie took place, he only managed to keep a straight face, at the most, for two months, as Deloitte terminated his contract in January of ’09.

Which is understandable. Gambling can be nerve-racking on its own but losing your ass on the Corporate Card has got to be a real pant-crapper. This makes for the second Big 4 degenerate loser to make headlines this year in the UK. Back in February, a ex-KPMGer really was rolling, slamming over £25,000 on his expense report.

Accountancy Age reports that the Institute of Chartered Accountants in England and Wales (“ICAEW”), “ordered that the defendant cease to be a provisional member and be ineligible for re-registration for six months, and that he be severely reprimanded.” As we mentioned in the KPMG case, we’re not sure what a “reprimand” entails but a weeklong diversity training with Barry Salzberg could be a possibility.

Luckily, for Qureshi a relative was kind enough to pay the debt owed to Deloitte, who must have really wanted the money back. It’s just principle.

Former Deloitte student admits £8k bill from online gambling [Accountancy Age]

Compensation Watch ’10: Is Deloitte Joining the Party?

In the past week or so, merit increases have been communicated or reiterated by three of the Big 4. While the news of the resurrected raises is widespread, most people we’ve talked to (and commenters) are not believers. Most see it as a preventive measure to delay the exodus (or at least keep it within expected ranges).


Since the rest of the Big 4 have already been covered (KPMG, E&Y, PwC) we decided to get proactive on finding out the scoop on Deloitte. We contacted a reliable source and it turns out there may be some communication very soon:

[S]o far nothing. I’m going to an all-hands meeting tomorrow in NYC, so maybe they’ll mention something there. For now, all that I can really say is that there’s whole big bunch of people waiting to jump ship, pending the results of this year’s comp, so they better put some serious increases in…

So it’s safe to presume that if the Deloitte brass doesn’t communicate a satisfactory message, the streets may be flooded with Green Dots. If you’ve gotten guarantees, denials, or anything that remotely resembles an official word on this year’s Deloitte comp, get in touch.

Maybe Deloitte Should Give Up Doing Business in Italy

Deloitte has managed to get itself into more trouble in Italy. After settling the lawsuit with freakishly long-life milk company Parmalat, the firm may be facing charges of “market manipulation, false accounting and obstruction of justice, as well as fraud,” according to Bloomberg.


In this particular Italian job, Deloitte is lumped in with a couple of Deutsche Bank employees, who were allegedly complicit in losses at Banca Italease SpA, “Milan prosecutors are probing Italease after potential losses accumulated by clients on interest-rate swaps swelled in 2007 and the bank’s unprofitable positions ballooned. The Bank of Italy fired the company’s board in July 2007 for lack of internal controls.”

While zee Germans are standing behind their two boys, Francesco Giuliani and Dario Schiraldi, Deloitte didn’t comment for the article but the firm is certainly familiar with the tenacity of the Italians are not be trifled with. The Parmalat case dragged on for over six years before investors finally received a settlement from the firm so you can expect that the screwed investors of Italease will be equally as determined.

Deutsche Bank Employees, Deloitte Said to Face Charges in Milan [Bloomberg BusinessWeek]