KPMG, one of the Big Four accounting firms, has made a controversial decision to reduce pay offers for some staff in offices near London. This move comes as a fresh blow to the industry, affecting those in commuter belt towns like Reading and Watford. The firm has brought pay ranges for these roles in line with those offered in other locations, such as Birmingham and Manchester. Consequently, new hires or promoted employees in these offices may face a significant reduction in their salaries, potentially thousands of pounds less than the previous year.
A spokesperson for KPMG UK clarifies that this adjustment is part of an annual benchmarking process to guide their reward strategy. They assure that no colleagues have had their salaries decreased as a result. However, this decision comes at a challenging time for advisory firms, following a boom in demand for their services during and after the pandemic. The slump in consulting work, due to geopolitical shocks and economic concerns, has led to a cautious spending environment among clients.
Despite the slowdown, KPMG's revenues rose by 1% last year, with pay packages for its UK partners climbing 9% to an average of £816,000. However, the firm has taken cost-cutting measures, including axing hundreds of jobs and implementing a pay freeze for thousands of employees in 2023. Additionally, junior auditors have been stripped of overtime pay, with the axing of a 'recharges' system.
The regional pay shake-up comes two years after the Financial Reporting Council (FRC) urged KPMG and other big accounting companies to pay younger staff in their audit divisions higher salaries. This move was intended to make careers in auditing more attractive. With the budget approaching, accountancy firms like KPMG are bracing for a tax raid as the chancellor seeks to plug a multibillion-pound hole in the public finances by targeting those with the 'broadest shoulders'. However, lobbying from white-collar firms may have softened the impact of the tax raid.
