Laboring In The Big 4 – A Labor Day Special ReportBy Francine • Aug 31st, 2012 • Category: Food for Thought, Pure Content
It seemed fitting to survey my writing about the relationship between the Big 4 and their employees. I’ve included a link discussing the relationship between Big 4 senior leadership and the average partner, since the average partner is really no more than a glorified employee for all the real job security and authority over firm activities that he has. And the price is high…
One of my first posts discussed the fundamental principles for professional services firms, as taught at the Harvard Business School:
1)Partnership structure is ideal.
2)Small is beautiful.
3)Organic growth is superior to growth by acquisition.
When a professional services firm strays from these principles, they run the risk of sacrificing the values, culture, code of ethics and requirement to put the client’s interests above theirs that is inherent in being a “professional.”
We can see that defying these principles has affected the firms’ ability to be good partners to their partners as well as stewards to the non-partner staff that support them.
We see it when firms struggle all over the world to develop representation at the partner level that is aligned with the percentage of women accounting graduates and those of color and diverse ethnic backgrounds.
When it comes to fair pay, the Big 4 has to worry about whether they’re paying their own staff as well as their vendors fairly. And based on the lawsuits and labor problems, they’re not doing a very good job of it.
They are paying their new recruits a healthy starting salary by most standards, but not when you consider all the unpaid overtime hours. And since there’s no free market in the college recruiting arena, it can hardly be called just and fair.
And when they want to make more money or screw up on planning and forecasting, they just let the employees go and pay them off to keep them from sharing their humiliation and hurt with anyone.
They do have formal performance review processes, but they were implemented in the last few years to respond to the need for a way to paper over the issues they had when business tanked in 2000/2001 before Sarbanes-Oxley and to address the slowdown or perceived slowdown that is occurring now. Borrowing from one of their most notorious clients, the review process is not about judging performance using an objective standard that measures knowledge, client service, and ethics, but about how well you perform compared to a peer group, however skewed and clique-ish that is.
Is this really the way to run a professional services firm?