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PricewaterhouseCoopers plans to spend $12 billion and hire 100,000 new people in areas such as artificial intelligence and cybersecurity by 2026, the latest move by a Big Four accounting firm to bet big on technology.
The planned hires will boost the company’s global workforce of currently 284,000 employees by more than one-third, said Tim Ryan, U.S. chairman and senior partner at PwC. The London-based professional services firm expects its staff count to exceed 384,000 five years from now, making up for any attrition with additional hiring.
The investments are aimed at better advising companies that face increasing scrutiny from investors on issues such as data privacy, diversity and sustainability, Mr. Ryan said. “It’s critical that our people have those skills,” he said.
PwC in 2019 said it would invest $3 billion on technology and employee training over four years, part of which is being rolled into the new plan.
The firm said last year it hired 63,000 people globally, largely to fill existing positions, but also created 8,000 new jobs. The firm said it has spent $7.4 billion on talent and other areas since 2016. PwC declined to comment on its attrition rate.
An average of 20,000 newly created jobs over each of the next five years pales in comparison to 2019, when PwC created about 26,000 new positions. PwC declined to provide projectionsfor the jobs it would create each coming year.
Many U.S. companies have struggled to fill open jobs as potential employees remain on the sidelines. Employers added 599,000 jobs in May, falling short of many economists’ predictions.
The Big Four firms—Deloitte & Touche, Ernst & Young, KPMG and PwC—in recent years have invested billions in cloud-based and other technologies to strengthen their audit and consulting businesses and continue to compete globally.
KPMG in 2019 pledged to shell out $5 billion on technology over five years, while EY last year said it would spend $1.5 billion on technology, audit quality and its workforce through this month.
PwC’s $12 billion investment is also meant to help boost its market share, which has been lagging. The firm audited 10.3% of 6,030 public U.S. companies as of April 9, down 0.9 percentage points from last year, according to research firm Audit Analytics. EY, Deloitte and KPMG audited 15.4%, 11.9% and 9.4% respectively, the data show. Deloitte is a sponsor of CFO Journal.
PwC said it intends to hire more experienced personnel in areas such as environmental, social and governance issues and offer new products that feature artificial intelligence and machine learning. The company also is considering acquiring other companies to expand certain capabilities, for example climate-risk assessments, Mr. Ryan said.
PwC said it would also spend $1 billion globally on technologies to improve audit quality, helping auditors assess a wider range of risks and more fully integrate nonfinancial information in their assessments. “We believe this is critical to meet the need for increasing expectations on us as the audit becomes more complicated and as things like ESG get broader and brought into the audit,” Mr. Ryan said.
In the U.S., PwC plans to continue training all 55,000 employees on ESG issues, including companies’ commitments around net-zero carbon emissions. PwC is also reorganizing its U.S. business lines to combine tax consulting with its advisory services division.
Big Four firms are trying to deepen their employees’ skills in areas such as auditing of nonfinancial information such as ESG reporting, said Jeff Payne, an accounting professor at the University of Kentucky. Auditors currently aren’t responsible for assessing companies’ ESG information, but that could change if regulators decide to introduce new rules.
PwC last August reported its slowest revenue growth in at least a decade as clients slashed their budgets amid the coronavirus pandemic. Revenue for the firm’s audit, consulting and tax businesses rose to $43.03 billion during the fiscal year ended June 30, 2020, up 1.4% from the previous year, PwC said at the time. Its audit and assurance division saw revenue rise 1.3% to $17.6 billion in the most recent fiscal year, the division’s slowest growth rate since 2016.
From 2010 to 2019, revenue growth averaged about 5%, according to data from their annual reports. The Big Four disclose revenue but not profit because of their status as international networks of private partnerships.
Report source: thewallstreetjournal
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